Trading with point and figure

dentist007 said:
retest..and dump
for a few

1z354xl.png
Click to expand...

and a few more

t8rrxy.png
 
all indices bullish
Euro indices lagging
dollar bearish
oil...could test rez

poss dollar bounce at our trendline
 
- Very busy schedule of economic data, but likely to be rendered by bigger
big picture considerations: G-20 and OPEC meetings, Brexit knife edge and
whither Fed and ECB policy and global economy in the next year? Digesting
solid Japan Production, mixed China PMIs, dovish BoK rate hike; awaiting
Eurozone CPI, Canada & India Q3 GDP and US Chicago PMI, Fed Williams

- Eurozone CPI: risks to the downside given Spanish, German CPI misses,
set to trend lower on Food & Energy prices, leaving ECB in a quandary

- Fed: minutes underscore rate hike pause discussion very much a 'live'
debate, but may be further away than markets assume, and what does it
say about global growth, risk asset prospects ?

- India GDP: confluence of higher oil prices, weak INR, lower food prices
and shadow banking squeeze set to see GDP slow, but forward prospects
key as 2019 general election looms in the headlights

- Canada GDP: set to slow to around trend rate, as Q2 boost from energy
exports unwound; USMCA agreement likely to have come too late to
boost business investment, but personal consumption likely to support

- Charts: China NBS Manufacturing PMI, Eurozone CPI vs Brent VS Food Prices

..........................................................................

********************
** EVENTS PREVIEW **
********************

It's month end, and as is often the case the sheer volume of statistics that will be shoe horned into the day's schedule will more than likely be largely ignored, as markets focus in on the G-20 meeting, above all the Trump-Xi meeting. The overnight run of data has Japan's CPI, Unemployment and Industrial Production, China NBS (official) PMIs, UK Lloyds Business Barometer and Nationwide House Prices and the ever erratic German Retail Sales to digest. Ahead lie Eurozone and Italian CPI, Indian & Canadian Q3 GDP and the US Chicago PMI. In event terms, the Bank of Korea finally delivered a 25bps follow-up rate hike to 1.75%, following up on last October's initial hike of 25 bps, though as low rate trajectories go this is a gold medal contender, with the next rate hike not expected before 20201. However it may well be that a speech by NY Fed chief Williams, the last of the three 'big beasts' at the Fed to speak this week, following Clarida and Powell proves to be key, in so far as he has an opportunity to correct any misconceptions about what Powell meant with that 'just below neutral' comment on rates, which prompted Wednesday's dash for trash and US Treasury rally. Just as a reminder what Powell said exactly was: "Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy‑‑that is, neither speeding up nor slowing down growth", per se offering no actual signal on rates. The FOMC minutes were equally very equivocal on the prospects for pause: "Many participants indicated that it might be appropriate at some upcoming meetings to begin to transition to statement language that placed greater emphasis on the evaluation of incoming data in assessing the economic and policy outlook". To be sure this is now a live debate on teh FOMC, but then again this has been a "live debate" since around the middle of the year. Be that as it may, there is obviously a lot riding on the G-20 meeting in terms of market expectations for the global economic outlook, and as ever Trump and his acolytes have done their level best to offer as many conflicting signals as possible, prompting substantial swings back and forth in the pendulum of market sentiment. Given that Trump's behaviour appears more erratic than ever, seemingly in response to mounting pressures from the Mueller 'Russia probe', the risk of a major bust-up at the meeting with any number of his G-20 counterparts looks to be uncomfortably high.

** Eurozone - November CPI **
- With Spanish HICP (-0.2% m/m 1.7% y/y vs. exp. Flat/2.0%) and far more anomalously German CPI (0.1%/2.2% vs. exp. 0.2%/2.3%) missing forecasts, the risks on today's Eurozone CPI are to the downside of forecasts of a drop to 2.0% y/y from 2.3% for headline CPI and an unchanged and lowly 1.1% for core CPI. How the German statisticians managed to cook up a national CPI reading of 0.1% m/m, when the four major states of the six that make up the provisional reading all reported increases of 0.3% m/m beggars belief, even if the downward drag on CPI from energy and food prices in November and going forward is all too obvious (see chart attached of Eurozone CPI vs. Brent vs. UN FAO Food Price index. It is as such little wonder that markets have been pushing back sharply on ECB rate hike expectations for 2019, though the more immediate challenge for the ECB is how to sell (rationalize) its much flagged end of QE in December, when it is likely to have to revised its GDP and CPI forecasts lower.

** India - Q3 GDP **
- After a stellar rise of 8.2% y/y in Q2, the Indian economy is expected to have slowed significantly to 7.4% in Q3 due to a combination of factors, with the bigger question how much more it might slow going into next year's general election. The Q3 slowdown is likely to have been paced by a combination of factors, the rise in oil prices, the weakness of the INR during the quarter, the well documented squeeze on credit availability due to the banking scandals and IL&FS crisis, which above all resulted in a squeeze on the shadow banking sector, while lower food prices impacted rural incomes and by extension personal consumption. As much as the headier levels of >7.0% y/y for Industrial Production and Infrastructure Industries Output achieved in the middle of the year owed as much to flattering base effects, as to a pick-up in activity, the slower 4.0-4.5% of recent months underlines the loss of momentum. The question for Q4 and beyond is how much of a boost there will be from a firmer INR and sharply lower oil prices, and how much any boost will be offset by state spending cuts, with unfavourable base effects also implying that Q4 will almost certainly slow from Q3.

** Canada - Q3 GDP **
- Q2's 2.9% SAAR pace of GDP was flattered by a jump in energy exports, which saw overall exports rise at a 12.3% SAAR pace, the fastest pace since 2014, though this disguised weakness in Business Investment, and a drag from Inventories (also energy related), while Personal Consumption was solid at 2.6%. The latter should remain relatively robust in Q3, but with energy exports set to fall, and business investment only like to get a boost from the removal of NAFTA related concerns (though not in the Steel & Aluminium sectors) in Q4, Q3 GDP is expected to slow to a resp

from Marc Ostwald
 
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