Trading with point and figure

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Mornin folks 😷 😷

 

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Not happy...As we said yesterday

 

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Blue could get busted

 

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In rez

 

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$10.00 bounce area.?

 

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Good Morning: The Long & the Short of it and The Bigger Picture - 28 April 2020 - ADM ISI

Inbox

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Ostwald, Marc

08:35 (1 hour ago)

to Marc

- Digesting French Consumer Confidence, awaiting US Goods Trade, Consumer
Confidence & Richmond Fed; EU bank capital rules relaxation, very busy
day for corporate earnings; UK and US to auction debt

- US Consumer Confidence: record drop expected, labour differential likely
to collapse

- US Goods Trade Balance: deficit seen narrowing to 5-yr low, imports set
to fall more than export, implies positive GDP contribution

- Charts: US Consumer Confidence, market volatility indices, WTI and Brent
contract tables and WTI first vs 12th month spread

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

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

While there are a number of data points of interest - Consumer Confidence in the US and France, US Trade Balance, the often rather errant & erratic CBI Retailing survey and Brazil IPCA-15 inflation - it is the day's corporate earnings, which may end up centre stage. Amongst these are major European Banks (HSBC, Santander & UBS), and a broad spectrum of non-financials: 3M, Alphabet aka Google, BP, Ford Motor, Harley-Davidson, Merck & Co, Mondelez, Pfizer & UPS amongst others. There is also plenty of govt bond supply: US 7 -yr & 2-yr FRN, UK 9-yr conventional and 8-yr I-L and Dutch 27 yr. The Eu is also expected to announce a relaxation of IFRS-9 bank leverage ratios, to free up capital for bank lending, and very much mirroring one of the Fed's recent moves, and this is also likely to be accompanied by a delay to implementation of new Basel rules, according to sources. Month end appears to be dampening activity as was to be expected, with volatility ebbing, though with the exception of the MOVE Treasury volatility, other measures are only back at the highest levels of the past 5 years - see charts. Oil prices remain the other key point of focus with the well documented storage capacity constraints the overriding factor, slamming oil prices while bloating related shipping rates, as floating capacity also hits the buffers. Once again this serves as a reminder, the Fed and other central banks can flood markets with liquidity, but companies that are insolvent will remain insolvent, no ifs, no buts, and the oil sector (broadest definition) faces a barrage of corporate failures.

** U.S.A. - April Consumer Confidence **
- March Consumer Confidence proved to be far more resilient at 120.0 from February's 132.6, which owed everything to data collection timing effects, as the bulk of responses were collected before sky rocketing layoffs. April's reading is expected to stage a record mth/mth slide to 87 (see chart), paced by a likely dramatic slide in the labour differential, which remained high by historical standards at 31.0 in March (the current cyclical high was 38.3). Lower gasoline prices and rebound in equity markets are likely to have zero benefit, as would normally be the case.

** U.S.A. - March Advance Goods Trade Balance **
- While Trade data is not at the top of markets' watch list at the moment, today's data will offer some insight into the contribution of net exports to the advance Q1 GDP reading on Thursday. The projected narrowing to $-55.0 Bln from February's $59.9 Bln would mark the smallest deficit in over five years, per se implying a positive contribution to Q1 GDP, above all as the fall in overall deficit to ca $-35.0 Bln, if this projection is correct, would be the smallest since January 2009, i.e. the peak of the GFC economic contraction. Eminently the m/m changes in Exports and Imports will be negative, with Exports likely to fall less in part due to Agri exports.

 

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