Trading with point and figure

Dentalfloss · Aug 2, 2019

Mornin folks

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Dentalfloss · Aug 2, 2019

DAX into the open
Is that 3 waves down.?

Dentalfloss · Aug 2, 2019

Dentalfloss · Aug 2, 2019

Dentalfloss · Aug 2, 2019

Dentalfloss · Aug 2, 2019

Dow

Dentalfloss · Aug 2, 2019

Dentalfloss · Aug 2, 2019

11950/round
first rez 11975 area

Dentalfloss · Aug 2, 2019

Dentalfloss · Aug 2, 2019

Good Morning: The Long & the Short of it and The Bigger Picture - 2 August 2019 - ADM ISI

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Ostwald, Marc

08:43 (27 minutes ago)

to Marc

- Trump China tariff tweets and upcoming EU tariffs presser render
US labour data, UK Construction PMI and rest of schedule little
more than roadkill

- US labour data: another solid Payrolls gain expected, Unemployment
Rate seen dropping back to 50 year low, wage growth not accelerating

- USA/China: no one wins a trade war, though next round of tariffs
likely to see greater pass through to CPI

- Audio preview:
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-2-august-2019/

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** EVENTS PREVIEW **
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It would appear that while G3 central banks have lost their "whatever it takes" mojo, Donald Trump certainly has not, and for today we can forget US payrolls today, we can ignore Boris and just watch as he wreaks havoc with the China tariff announcement, and he will also be holding a press conference at 17:45 GMT on the subject of EU/Auto tariffs - see the attached timeline graphics on both. Also attached are charts on GBP / USD, JPY / USD (Yen being the safe haven of the moment, despite auto tariffs clearly being a big negative for Japan), and on the commodities front - Corn, Soybean, US WTI oil & US Copper futures. The other observation would be that we now have a situation where most G7 (ex-Italy) 10-yr govt bond yields are below respective benchmark interest rates, so gloom and doom is fully priced, as is central bank easing. It is little wonder that the G3 central banks are not overly enthusiastic about what they can achieve. That said the next round of China tariffs will see much more pass through to consumer prices, so Trump is in effect doing the Fed's work, though the costs to the economy and consumers will underline the Pyrrhic nature of his tactics. As a reminder, 'No one ‘wins’ a trade war, in general they end because the destructive forces that they unleash become intolerable. One side may consider that it has gained the upper hand, but the victory is so Pyrrhic that it is in truth tantamount to defeat. See also
https://content.yudu.com/web/400wi/0A400wk/MayJune2019/html/index.html?page=8&origin=reader

FWIW The regular daily preview:

Outside of the US labour data, the schedule looks to be relatively modest, with UK Construction PMI accompanying Italian Industrial Production & Retail Sales, and the US and Canada publishing Trade data. There are the June BoJ policy minutes to digest, but the question on many people's lips after Wednesday's communications mishap (to put it kindly), why are there not any Fed speakers scheduled - vice-chair Clarida ideally, given that Williams is in the Fed's proverbial dog house after those comments two weeks ago, only Bullard & Evans are scheduled at the moment next week. Financials will likely provide the corporate earnings highlights in Europe via Allianz, Credit Agricole and RBS, with energy featuring heavily in the US with Chevron and ExxonMobil along with Noble and Sempra Energy. The week ahead is a mixed bag in terms of economic data, with the US only having PPI, while both the UK and Japan look to provisional Q2 GDP, with the UK also having its run of Industrial Production, Index of Services, Trade, Construction Output, as well as BRC Sales and RICS House Prices; Japan also has Labour Cash Earnings and Current Account. China has Trade and possibly monetary and lending aggregates, and Monday has the run of Services PMIs/ISM. Germany looks to Orders, Production and Trade, the latter two are also due in France. In central bank terms the RBA and RBNZ are in focus, the former seen holding at 1.0%, while the latter is expected to play 'catch-up' with the RBA and Fed and cut 25 bps to 1.25%. There are plenty more corporate earnings, and the US also sells $84 Bln of new 3, 10 & 30-yr, though it is T-Bill Sales volumes which require careful attention, a $6 Bln increase in 3 & 6 mth has been announced, and the shorter dated volumes will also likely see hefty increases in coming weeks.

** U.S.A. - July labour data **
- The median looks for a very 'average' 170K increase for Payrolls after June's better than expected 224K, with the Unemployment Rate seen unchanged dipping to its 50 year low of 3.6%, and Average Hourly Earnings as ever forecast to rise 0.2% m/m for an unchanged 3.1% y/y - which, if correct, would be another labour report that has limited market impact. The anecdotal evidence offers little reason to expect a surprise with Claims consistently low, and the ADP posting a solid gain of 156K, paced heavily by Services, above all restaurants, which in turn implies a modest downside risk to the wages data, in so far as these tend to minimum wage type jobs.