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Trading with point and figure
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Dentalfloss
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OIL
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OIl
got bullish again on Friday...Ftse moved with it
got bullish again on Friday...Ftse moved with it
Dentalfloss
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close up
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Week Ahead: Data & Events - Preview & Highlights - 4 to 8 February 2019 - ADM ISI
Ostwald, Marc
12:08 (1 minute ago)
to Marc
The Week Ahead - Preview:
With most of East Asia closed for much of the week for the Lunar New Year holiday, or in China's case all week, and the US still in the process of catching up with a backlog of statistics not published during 'shutdown', the data schedule is a bit light. However central bank policy meetings and speakers are plentiful, and politics will as ever be a focal point, with the US State of the Union address in focus, along with Brexit, and the EU Commissions economic forecast update, particularly for Italy. It is also a peak week for US corporate earnings, of which there will also be plenty in Europe, while the govt bond auction run is dominated by the US ($84 Bln total 3, 10 & 30-yr). On the commodities front, Friday's USDA WASDE (World Agricultural Supply and Demand Estimates) will be closely watched given the dearth of reports in the Agricultural sector due to shutdown, and above all some optimistic noises in the context of the current trade talks about a rise in Chinese demand for US Agricultural exports, and on the other side of the coin adverse weather impacts in South America.
- Services PMIs worldwide are likely to paint a less downbeat picture of the world economy than their manufacturing counterparts, as was confirmed by a marginal slowdown to a still solid 53.6 in the China Caixin Services PMI. The main exception will be France, where Transport/Distribution and Leisure/Hospitality services continue to suffer from the 'Gilets Jaunes' protests. By contrast German Services are benefiting from solid personal consumption, underpinned by the substantial rise in real wages. For the UK a further drop is seen to a sluggish 50.9, as the boost to logistics from 'hoarding' in the goods producing sector (see chart) is offset by weak consumer spending. Meanwhile the US Non-Manufacturing ISM is forecast to dip to 57.0 from 57.6, just above the 2018 low of 56.7, but still indicative of a solid pace of activity. The rest of the US schedule of monthly activity data will be for November (Trade, Factory Orders), i.e. rather historical, with Dec Consumer Credit the only other item of note.
The rest of the UK schedule is modest with BRC Retail Sales (last -0.7%) unlikely to offer much solace on consumer spending, as already evidenced by individual retailer reports, and also suffering from an adverse base effect (Jan 2018 3.6%), which should be reversed in February (flattering base effect due to last year's 'Beast from the East'). The Construction PMI and Halifax House Prices are also due, but all data is eminently still subordinate to Brexit events.
Germany has plenty of major data, but as this is comprised of precisely those items that have been a major drag on the economy - Factory Orders, Industrial Production and Trade - the only hope is that Orders do post the expected 0.3% m/m gain, and above all see some recovery in Capital Goods and Consumer Durables, which contracted sharply in the first 11 months of 2018. The concomitant drop in Order Backlogs implies that Industrial Production will again be weak, even if Construction should rebound after counterfactual drops in the first two months of Q4, while Exports are seen edging up 0.3% m/m (perhaps too optimistic given anecdotal evidence), and Imports to dip marginally (-0.1% m/m). Industrial Production also tops the run of statistics in other major Eurozone economies and Sweden.
Elsewhere Japan has both Labor Cash Earnings and Household Spending, which are forecast to improve in broad terms, with Nominal Wages seen dipping to 1.7% y/y from 2.0%, while the more important Real Wages are seen rising to 1.7% y/y vs. November's 1.1%, offering a ray of light for the BoJ as it continues to struggle any upward traction in core CPI measures, and fret about the impact of trade tensions. Household Spending is forecast to rebound to 0.9% y/y, after a rather dire -0.6% in November. Current Account and the Economy Watchers (services) survey are also due. A busier week in Australia has Retail Sales, which are projected to turn out flat m/m, per se underlining that November's 0.4% did not signal a turn after a string of weak readings, with the housing market slide, tightening credit conditions, flat real wage growth and high levels of household debt taking their toll. The Trade Balance (forecast A$2.2 Bln) will above all be watched for what it hints at in terms of Chinese demand for commodities. Canada's labour data are projected to show a modest 6K rise that is expected to see the Unemployment Rate edge up to 5.7%. Other items of note will be the Q4 labour data in New Zealand, CPI in Brazil, Mexico & Turkey and preliminary 2018 GDP for India.
- While central bank policy meetings are plentiful, they will probably not offer any genuinely fresh insights or policy signals. Australia's RBA kicks off proceedings, and is again expected to hold rates at 1.50%, with latest surveys implying no rate hikes in 2019 or indeed 2020, a viewpoint that the statement and the latest Statement on Monetary Policy (SOMP) will almost certainly underline. Any comments on the aforementioned household and housing woes will attract particular attention. The Bank of England is also seen on hold at 0.75% (and a total of $435 Bln of QE), with the accompanying Q1 Inflation Report probably seeing some small tweaks to inflation projections (lower near term) and wage forecasts (slightly higher), but all in all rather meaningless given the Brexit uncertainty, which makes forecasts for the UK economy a lottery.
Poland's NBP is again seen holding rates at their all-time low of 1.50%, and reiterating that rates will likely remain on hold for the whole of 2019, and arguing that the upward impact of utility price hikes will be transitory, above all given that core CPI at 0.8% y/y remains very subdued and well below its 2.5% target. The NBP MPC is however increasingly very divided on the outlook for rates, even if for the time being the majority on the MPC remains resolutely dovish. The Czech National Bank is anticipated to hold its key rate at 1.75%, and has turned rather cautious on the economic outlook, with markets no longer anticipating a previously anticipated 25 bps hike at this meeting. Governor Rusnok last week suggested that there could be no rate hikes in 2019, if growth risks crystallize, though perhaps two hikes if uncertainty ebbs.
In the EM space India's RBI is also seen on hold, but the message from the accompanying forecast update will likely signal a shift to a neutral policy outlook, and a hint that rates could be cut in H2 2019 (i.e. post election), if CPI trends continue to be as benign as they were in H2 2018. After a surprise rate hike to 7.75% at its last meeting Russia's Bank Rossi is seen on hold, but Nabiullina will likely strike a relatively hawkish tone, above all given the rise in Household Inflation Expectations (10.4% vs prior 10.2%), the upward pressure from the sales tax hike and the weak RUB (overall in 2018), and with December CPI already above target at 4.3% y/y. Mexico's central bank is seen holding rates at 8.25%, pausing a protracted tightening cycle, with recent comments underlining that the economic outlook is very uncertain above all due to the uncertainty and drop in confidence, in the wake of the Lopez Obrador's government decision to scrap the new Mexico City airport project, as well as proposed legislation to cap bank fees and regulate the mining sector. Financial markets may be taking a very optimistic line on the outlook for the Brazilian economy due to the new Bolsonaro govt, but the central bank's COPOM policy committee is likely to be rather more cautious. It will above all be conscious that the wide budget deficit (2018 3.2% of GDP), high Unemployment and still sluggish growth (2018 GDP 1.8% vs. 2017 1.7%) present substantial hurdles for the new government to overcome, if it is to engineer a substantial fiscal stimulus.
..........................................................................
MARC OSTWALD
Global Strategist & Chief Economist
Ostwald, Marc
12:08 (1 minute ago)
to Marc
The Week Ahead - Preview:
With most of East Asia closed for much of the week for the Lunar New Year holiday, or in China's case all week, and the US still in the process of catching up with a backlog of statistics not published during 'shutdown', the data schedule is a bit light. However central bank policy meetings and speakers are plentiful, and politics will as ever be a focal point, with the US State of the Union address in focus, along with Brexit, and the EU Commissions economic forecast update, particularly for Italy. It is also a peak week for US corporate earnings, of which there will also be plenty in Europe, while the govt bond auction run is dominated by the US ($84 Bln total 3, 10 & 30-yr). On the commodities front, Friday's USDA WASDE (World Agricultural Supply and Demand Estimates) will be closely watched given the dearth of reports in the Agricultural sector due to shutdown, and above all some optimistic noises in the context of the current trade talks about a rise in Chinese demand for US Agricultural exports, and on the other side of the coin adverse weather impacts in South America.
- Services PMIs worldwide are likely to paint a less downbeat picture of the world economy than their manufacturing counterparts, as was confirmed by a marginal slowdown to a still solid 53.6 in the China Caixin Services PMI. The main exception will be France, where Transport/Distribution and Leisure/Hospitality services continue to suffer from the 'Gilets Jaunes' protests. By contrast German Services are benefiting from solid personal consumption, underpinned by the substantial rise in real wages. For the UK a further drop is seen to a sluggish 50.9, as the boost to logistics from 'hoarding' in the goods producing sector (see chart) is offset by weak consumer spending. Meanwhile the US Non-Manufacturing ISM is forecast to dip to 57.0 from 57.6, just above the 2018 low of 56.7, but still indicative of a solid pace of activity. The rest of the US schedule of monthly activity data will be for November (Trade, Factory Orders), i.e. rather historical, with Dec Consumer Credit the only other item of note.
The rest of the UK schedule is modest with BRC Retail Sales (last -0.7%) unlikely to offer much solace on consumer spending, as already evidenced by individual retailer reports, and also suffering from an adverse base effect (Jan 2018 3.6%), which should be reversed in February (flattering base effect due to last year's 'Beast from the East'). The Construction PMI and Halifax House Prices are also due, but all data is eminently still subordinate to Brexit events.
Germany has plenty of major data, but as this is comprised of precisely those items that have been a major drag on the economy - Factory Orders, Industrial Production and Trade - the only hope is that Orders do post the expected 0.3% m/m gain, and above all see some recovery in Capital Goods and Consumer Durables, which contracted sharply in the first 11 months of 2018. The concomitant drop in Order Backlogs implies that Industrial Production will again be weak, even if Construction should rebound after counterfactual drops in the first two months of Q4, while Exports are seen edging up 0.3% m/m (perhaps too optimistic given anecdotal evidence), and Imports to dip marginally (-0.1% m/m). Industrial Production also tops the run of statistics in other major Eurozone economies and Sweden.
Elsewhere Japan has both Labor Cash Earnings and Household Spending, which are forecast to improve in broad terms, with Nominal Wages seen dipping to 1.7% y/y from 2.0%, while the more important Real Wages are seen rising to 1.7% y/y vs. November's 1.1%, offering a ray of light for the BoJ as it continues to struggle any upward traction in core CPI measures, and fret about the impact of trade tensions. Household Spending is forecast to rebound to 0.9% y/y, after a rather dire -0.6% in November. Current Account and the Economy Watchers (services) survey are also due. A busier week in Australia has Retail Sales, which are projected to turn out flat m/m, per se underlining that November's 0.4% did not signal a turn after a string of weak readings, with the housing market slide, tightening credit conditions, flat real wage growth and high levels of household debt taking their toll. The Trade Balance (forecast A$2.2 Bln) will above all be watched for what it hints at in terms of Chinese demand for commodities. Canada's labour data are projected to show a modest 6K rise that is expected to see the Unemployment Rate edge up to 5.7%. Other items of note will be the Q4 labour data in New Zealand, CPI in Brazil, Mexico & Turkey and preliminary 2018 GDP for India.
- While central bank policy meetings are plentiful, they will probably not offer any genuinely fresh insights or policy signals. Australia's RBA kicks off proceedings, and is again expected to hold rates at 1.50%, with latest surveys implying no rate hikes in 2019 or indeed 2020, a viewpoint that the statement and the latest Statement on Monetary Policy (SOMP) will almost certainly underline. Any comments on the aforementioned household and housing woes will attract particular attention. The Bank of England is also seen on hold at 0.75% (and a total of $435 Bln of QE), with the accompanying Q1 Inflation Report probably seeing some small tweaks to inflation projections (lower near term) and wage forecasts (slightly higher), but all in all rather meaningless given the Brexit uncertainty, which makes forecasts for the UK economy a lottery.
Poland's NBP is again seen holding rates at their all-time low of 1.50%, and reiterating that rates will likely remain on hold for the whole of 2019, and arguing that the upward impact of utility price hikes will be transitory, above all given that core CPI at 0.8% y/y remains very subdued and well below its 2.5% target. The NBP MPC is however increasingly very divided on the outlook for rates, even if for the time being the majority on the MPC remains resolutely dovish. The Czech National Bank is anticipated to hold its key rate at 1.75%, and has turned rather cautious on the economic outlook, with markets no longer anticipating a previously anticipated 25 bps hike at this meeting. Governor Rusnok last week suggested that there could be no rate hikes in 2019, if growth risks crystallize, though perhaps two hikes if uncertainty ebbs.
In the EM space India's RBI is also seen on hold, but the message from the accompanying forecast update will likely signal a shift to a neutral policy outlook, and a hint that rates could be cut in H2 2019 (i.e. post election), if CPI trends continue to be as benign as they were in H2 2018. After a surprise rate hike to 7.75% at its last meeting Russia's Bank Rossi is seen on hold, but Nabiullina will likely strike a relatively hawkish tone, above all given the rise in Household Inflation Expectations (10.4% vs prior 10.2%), the upward pressure from the sales tax hike and the weak RUB (overall in 2018), and with December CPI already above target at 4.3% y/y. Mexico's central bank is seen holding rates at 8.25%, pausing a protracted tightening cycle, with recent comments underlining that the economic outlook is very uncertain above all due to the uncertainty and drop in confidence, in the wake of the Lopez Obrador's government decision to scrap the new Mexico City airport project, as well as proposed legislation to cap bank fees and regulate the mining sector. Financial markets may be taking a very optimistic line on the outlook for the Brazilian economy due to the new Bolsonaro govt, but the central bank's COPOM policy committee is likely to be rather more cautious. It will above all be conscious that the wide budget deficit (2018 3.2% of GDP), high Unemployment and still sluggish growth (2018 GDP 1.8% vs. 2017 1.7%) present substantial hurdles for the new government to overcome, if it is to engineer a substantial fiscal stimulus.
..........................................................................
MARC OSTWALD
Global Strategist & Chief Economist
Dentalfloss
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Morning Inzi
yu well..??
yu well..??
Dentalfloss
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Oil should be in rez
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we had up to 55.80 area marked
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Dow has hit a brick wall
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Dow
an inkling of a poss top is in
an inkling of a poss top is in
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lined up
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lookin now
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general veiw
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Dax in support
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chart comin
Dentalfloss
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aqua line is in 11136 area
