Dentalfloss
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Trading with point and figure
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overshot our rez yesterday...gave better results today
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Into the open
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Dentalfloss
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Dentalfloss
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Dentalfloss
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Dentalfloss
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Mornin folks 
😷😷😷😍😍😁😁😄😃🤓🤓🤓🤓🤓🤪🤪🤪💋💋💋💋
😷😷😷😍😍😁😁😄😃🤓🤓🤓🤓🤓🤪🤪🤪💋💋💋💋
Dentalfloss
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Out of sync
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updated
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Dentalfloss
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Dentalfloss
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In rez
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buyers need blue as support
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Good Morning: The Long & the Short of it and The Bigger Picture - 7 May 2020 - ADM ISI
- Plenty of data to digest - China Trade, German and French Production,
along with BoE and Brazil rate decisions; ahead lie Norway and Czech
monetary policy meetings, US weekly jobless claims, Mexico / Russia CPI,
French and Spanish govt bond sales, further swathe of corporate earnings
- China Trade: export pick-up mostly catch-up and unlikely to be sustained
in coming months; import data highlight more factors at play than virus,
as is typical
- BoE: no changes today as expected, but dire forecasts imply high
probability of 'more' going forward
- Germany/France Production: worse than expected, though mirroring
PMI production sub-indices
- US weekly jobless claims: initial claims seen easing, but focus shifting
to expected further jump in Continued Claims
- USD IG Corporate issuance headed for another monthly record? Will
surging Treasury issuance resulting in crowding out effect, despite
financial repression 'reach for yield'
- Charts: EUR/NOK, EUR/CZK, US Financial Conditions, US IG Credit spread,
S&P500 vs US HY credit spread
..........................................................................
********************
** EVENTS PREVIEW **
********************
Ahead of the long weekend in the UK and tomorrow's US labour data, there is a busy day for central bank policy meetings (BoE, Norges Bank, Czech CNB and Serbia's NBS) adn Fed & ECB speak, along with some key data items - overnight China Trade and Caixin Services PMI, UK GfK Consumer Confidence, French and German Industrial Production, while ahead lie US weekly jobless claims along with Russian and Mexican CPI. Govt bond supply features up EUR 11.5 Bln in French OATs and EUR 7.25 Bln of Spanish Bonos, with the US selling $185 Bln in 1 & 2-mth T-bills and 154 day CMBs. Corporate earnings are also very plentiful, with Europe looking to Air France-KLM, Ahold Delhaize, AB InBev, BT, Equinor, Ferrovial, HeidelbergCement, Linde, Monte dei Paschi di Sienna, Munich Re, Puma, Telefonica & Virgin Atlantic amongst other, while the headliners in the US include Allergan, Bristol-Myers Squibb, CBRE, Energizer, Hilton Worldwide, Liberty Media, Motorola Solutions, Uber, ViacomCBS and Zillow. Bear in mind on the US side that many of those companies reporting results this week will be hitting corporate bond markets with new issuance tomorrow or over the next week, and on current pace, there is scope for IG credit to beat, even smash April's record $288 bln in IG issuance. At some stage with the Fed winding back its programmes, and the Treasury issuing an eye-watering $3.0 Trln of securities in May through June, a crowding out effect is likely, and with economic news likely to signal that any rebound in activity will not be robust over the medium-term, current equity market valuations and credit in many sectors will become a talking point along with the reality of solvency issues, as liquidity pumping becomes less of a factor. US weekly jobless claims are again expected to drop back to 3.0 Mln (vs. prior 3.839 Mln), but at this stage the attention should turn more and more to Continued Claims, which are forecast to jump again to 19.80 Mln from 17.99 Mln, and highlight that even with an easing of lockdown conditions, many layoffs will likely prove to be permanent, and per se weigh heavily on private consumption for a very protracted period, the more so given that many consumers will be cautious given the longer-term psychological impact on consumption patterns.
In terms of the overnight run of data and events, the BoE kept its Base Rate and QE volumes unchanged, but it's unsurprisingly dire set of forecasts, including expectations of 25% q/q contraction in Q2 GDP with Unemployment seen spiking up to 9.0%, with a -14.0% y/y contraction forecast for 2020 GDP as a whole underline that it will likely add to its QE programme. Elsewhere China's trade data were very mixed with Exports unexpectedly rising 3.5% y/y, but imports slumping a larger than expected 14.2% y/y. However a cursory look through the commodity import data highlights a myriad of influences beyond Covid-19, including seasonal factors in Iron Ore rebounding after typical Q1 weakness and base effects due to last year's Brazilian dam disaster, while surging meat imports continue to reflect the devastating impact of ASF on local production, and while Soybean imports were very strong, this was in fact related to new crop shipments from Brazil (and likely to surge further in May) rather than just US/China trade deal. Strength in crude oil imports are clearly something of a relief for beleaguered oil with refinery utilization rats at so-called 'teapot' refiners getting back to pre-virus levels, as state owned refiners restarted after regular March maintenance shutdowns. Overall the data series is erratic and volatile even under more normal economic conditions, and per se extrapolating from the data to 'get a fix' on the extent of China's recovery is not advised, with plenty more volatility to come, with the positive exports reading unlikely to be sustained in coming months, given shutdown measures in Europe, North America and parts of Asia imply setbacks after an initial catch up. German and French Industrial Production were markedly worse than forecasts, though the latter were always little more than best guesstimates, though they serve as a reminder that the relative outperformance of Manufacturing PMIs relative to Services in headline terms disguised much weaker sub-indices on orders and output, as well as the quirks of Supplier Deliveries indices strength (due to supply side shocks, rather than demand strength, which would be the 'normal' interpretation).
** Norway - Norges Bank policy meeting **
- After slashing rates 125 bps 0.25% in March, there is a broad consensus that Norges Bank will hold rates today. It has in recent years conducted numerous internal studies which have concluded that zero or even negative rates are simply not worth the trouble, with any benefits likely to be small, and the possibility that with earnings impaired, banks might even tighten credit standards. The fact that Norway also has its colossal sovereign wealth fund to fall back on in fiscal terms, and the sharp oil price driven slide in the NOK, which has prompted the central bank to put FX intervention back on the policy tool table, for the first time in some twenty years also argue against a further rate cut, even if it will likely repeat that it 'does not rule out that the policy rate may be reduced again' as it did in March.
** Czech Rep. - CNB policy meeting **
- The CNB also cut rates 125 bps in March, but still has further room for manoeuvre with as 50 bps cut to 0.50% seen today, and scope for further cuts at later. Since the March meeting, a number of CNB speakers have suggested that rates could return to the quasi 'zero rate' of -0.05% at which they were held between 2012 and 2017, and parliament recently passed a bill expanding the CNB's ability to buy a wider range of assets (govt, corporate & mortgage debt and other assets) from a variety of market counterparties (including pension funds), something which the CNB has lobbied for as an addition to its 'toolbox' for a number of years, though it has suggested that it is in no hurry to start asset purchases.
========================== ** THE DAY AHEAD ** ===========================
| Inbox | x |
| 08:48 (17 minutes ago) |
|
- Plenty of data to digest - China Trade, German and French Production,
along with BoE and Brazil rate decisions; ahead lie Norway and Czech
monetary policy meetings, US weekly jobless claims, Mexico / Russia CPI,
French and Spanish govt bond sales, further swathe of corporate earnings
- China Trade: export pick-up mostly catch-up and unlikely to be sustained
in coming months; import data highlight more factors at play than virus,
as is typical
- BoE: no changes today as expected, but dire forecasts imply high
probability of 'more' going forward
- Germany/France Production: worse than expected, though mirroring
PMI production sub-indices
- US weekly jobless claims: initial claims seen easing, but focus shifting
to expected further jump in Continued Claims
- USD IG Corporate issuance headed for another monthly record? Will
surging Treasury issuance resulting in crowding out effect, despite
financial repression 'reach for yield'
- Charts: EUR/NOK, EUR/CZK, US Financial Conditions, US IG Credit spread,
S&P500 vs US HY credit spread
..........................................................................
********************
** EVENTS PREVIEW **
********************
Ahead of the long weekend in the UK and tomorrow's US labour data, there is a busy day for central bank policy meetings (BoE, Norges Bank, Czech CNB and Serbia's NBS) adn Fed & ECB speak, along with some key data items - overnight China Trade and Caixin Services PMI, UK GfK Consumer Confidence, French and German Industrial Production, while ahead lie US weekly jobless claims along with Russian and Mexican CPI. Govt bond supply features up EUR 11.5 Bln in French OATs and EUR 7.25 Bln of Spanish Bonos, with the US selling $185 Bln in 1 & 2-mth T-bills and 154 day CMBs. Corporate earnings are also very plentiful, with Europe looking to Air France-KLM, Ahold Delhaize, AB InBev, BT, Equinor, Ferrovial, HeidelbergCement, Linde, Monte dei Paschi di Sienna, Munich Re, Puma, Telefonica & Virgin Atlantic amongst other, while the headliners in the US include Allergan, Bristol-Myers Squibb, CBRE, Energizer, Hilton Worldwide, Liberty Media, Motorola Solutions, Uber, ViacomCBS and Zillow. Bear in mind on the US side that many of those companies reporting results this week will be hitting corporate bond markets with new issuance tomorrow or over the next week, and on current pace, there is scope for IG credit to beat, even smash April's record $288 bln in IG issuance. At some stage with the Fed winding back its programmes, and the Treasury issuing an eye-watering $3.0 Trln of securities in May through June, a crowding out effect is likely, and with economic news likely to signal that any rebound in activity will not be robust over the medium-term, current equity market valuations and credit in many sectors will become a talking point along with the reality of solvency issues, as liquidity pumping becomes less of a factor. US weekly jobless claims are again expected to drop back to 3.0 Mln (vs. prior 3.839 Mln), but at this stage the attention should turn more and more to Continued Claims, which are forecast to jump again to 19.80 Mln from 17.99 Mln, and highlight that even with an easing of lockdown conditions, many layoffs will likely prove to be permanent, and per se weigh heavily on private consumption for a very protracted period, the more so given that many consumers will be cautious given the longer-term psychological impact on consumption patterns.
In terms of the overnight run of data and events, the BoE kept its Base Rate and QE volumes unchanged, but it's unsurprisingly dire set of forecasts, including expectations of 25% q/q contraction in Q2 GDP with Unemployment seen spiking up to 9.0%, with a -14.0% y/y contraction forecast for 2020 GDP as a whole underline that it will likely add to its QE programme. Elsewhere China's trade data were very mixed with Exports unexpectedly rising 3.5% y/y, but imports slumping a larger than expected 14.2% y/y. However a cursory look through the commodity import data highlights a myriad of influences beyond Covid-19, including seasonal factors in Iron Ore rebounding after typical Q1 weakness and base effects due to last year's Brazilian dam disaster, while surging meat imports continue to reflect the devastating impact of ASF on local production, and while Soybean imports were very strong, this was in fact related to new crop shipments from Brazil (and likely to surge further in May) rather than just US/China trade deal. Strength in crude oil imports are clearly something of a relief for beleaguered oil with refinery utilization rats at so-called 'teapot' refiners getting back to pre-virus levels, as state owned refiners restarted after regular March maintenance shutdowns. Overall the data series is erratic and volatile even under more normal economic conditions, and per se extrapolating from the data to 'get a fix' on the extent of China's recovery is not advised, with plenty more volatility to come, with the positive exports reading unlikely to be sustained in coming months, given shutdown measures in Europe, North America and parts of Asia imply setbacks after an initial catch up. German and French Industrial Production were markedly worse than forecasts, though the latter were always little more than best guesstimates, though they serve as a reminder that the relative outperformance of Manufacturing PMIs relative to Services in headline terms disguised much weaker sub-indices on orders and output, as well as the quirks of Supplier Deliveries indices strength (due to supply side shocks, rather than demand strength, which would be the 'normal' interpretation).
** Norway - Norges Bank policy meeting **
- After slashing rates 125 bps 0.25% in March, there is a broad consensus that Norges Bank will hold rates today. It has in recent years conducted numerous internal studies which have concluded that zero or even negative rates are simply not worth the trouble, with any benefits likely to be small, and the possibility that with earnings impaired, banks might even tighten credit standards. The fact that Norway also has its colossal sovereign wealth fund to fall back on in fiscal terms, and the sharp oil price driven slide in the NOK, which has prompted the central bank to put FX intervention back on the policy tool table, for the first time in some twenty years also argue against a further rate cut, even if it will likely repeat that it 'does not rule out that the policy rate may be reduced again' as it did in March.
** Czech Rep. - CNB policy meeting **
- The CNB also cut rates 125 bps in March, but still has further room for manoeuvre with as 50 bps cut to 0.50% seen today, and scope for further cuts at later. Since the March meeting, a number of CNB speakers have suggested that rates could return to the quasi 'zero rate' of -0.05% at which they were held between 2012 and 2017, and parliament recently passed a bill expanding the CNB's ability to buy a wider range of assets (govt, corporate & mortgage debt and other assets) from a variety of market counterparties (including pension funds), something which the CNB has lobbied for as an addition to its 'toolbox' for a number of years, though it has suggested that it is in no hurry to start asset purchases.
========================== ** THE DAY AHEAD ** ===========================
