Trading with point and figure

Dentalfloss · May 11, 2020

Dentalfloss · May 11, 2020

Dentalfloss · May 11, 2020

Dentalfloss · May 11, 2020

Dentalfloss · May 11, 2020

needs to get into 24300 to unwind the overbought and test the bulls
dax should go with it
lets see what happens

Dentalfloss · May 11, 2020

Dentalfloss · May 11, 2020

Dentalfloss · May 11, 2020

markets rising as lockdown seems to be ending

Dentalfloss · May 11, 2020

Tad overbought

Dentalfloss · May 11, 2020

Good Morning: The Long & the Short of it and The Bigger Picture - 11 May 2020 - ADM ISI

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Ostwald, Marc

08:33 (3 minutes ago)

to Marc

- Minimalist data run digesting Norway CPI and China Auto Sales, nothing
else of significance; lockdown easing measure announcements in focus;
more corporate earnings; BoE/Riksbank speakers; US 3-yr auction

- U.K.: confused messages on lockdown easing as next round of stalled
Brexit talks start increasing UK political risks

- Market 'spin' on US labour data outturn re-emphasizes chasm between
Wall St perception and Main St reality

- US initiatives on domestic chipmaking have some echoes of Cold War era

- Chart: Selected national Covid19 curves

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

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

Given Friday's non-reaction to the appalling US labour data, with some commentators displaying a level of crass insensitivity in pointing to the outturn (-20.5 Mln) being than the (in any case meaningless) median forecast of -22.0 Mln, today's very modest run of statistics from smaller and EM economies seems unlikely to provoke much reaction. The gaping chasm between Wall Street and Main Street remains all too visible, and a major vulnerability for markets that only want to focus on central bank liquidity flows and backstopping measures. There are Norway's CPI to digest and the less than timely Turkish Unemployment data with little else ahead, while the events schedule has BoE's Haldane and Breeden, Fed's Evans and the Riksbank's Jansson speaking and its policy meeting minutes also due. The focus thus remains on announcements related to re-opening economies, with public reaction to yesterday's UK announcements (which suggested little or no change to lockdown measures) being one of being very underwhelmed, and a great deal of disappointment about the total lack of detail on any form of roadmap, however tentative or conditional. Given that UK/EU Brexit talks, which resume today and continue all week, looking as though they are gridlocked, the risk of a very negative public narrative on the UK govt's performance emerging look to be rising very rapidly. Elsewhere the uptick in the German infection rate since the easing of some lockdown measures will be watched carefully. However care needs to be taken with the political narratives on this front, as is amply demonstrated by the attached graphic on infection rate 'curves'. As can be seen, Sweden, the UK and US are at best only just past the peak (even if there is a big divergence in the US between NY falling sharply, while still rising elsewhere), but there have been sharp falls in Germany, Italy and Spain, and the aggressive stance taken by govts in Greece, New Zealand and South Korea appear to have reaped considerable benefits. The other weekend news to take note of is the White House reaching out to both Intel and Taiwan's TSMC on building chipmaking and related electronics facilities in the US, which from a supply chain security is more than understandable and logical, though obviously implies disruption to output elsewhere. However it is in effect protectionist, and just a very short legislative step away from returning the tech sector to Cold War era arrangements, which imposed again very logical and understandable national security restrictions on the sector, and by extension impaired and restricted development and innovation. Last but not least the US kicks off its quarterly refunding sales with $42 Bln of 3-yr Treasuries, with markets steepening curves in the US and elsewhere via way of a modest concession building for the seismic jump in issuance. In that context the other discussion point will be the fact that the US curve is now effectively discounting the Fed moving to a negative rate regime later in the year, which chairman Powell will more than likely lean quite heavily against when he speaks at the Peterson institute on Wednesday.

The Week Ahead - Highlights:

- Easing lockdown restrictions gradually, Supreme Court hearings on Trump’s financial records & another round of UK/EU Brexit talks; Merkel Q&A in Bundestag on Covid-19 responses and may also address last week's ECB QE Constitutional Court Ruling.

- Busy data week for US (CPI, PPI, Retail Sales, Industrial Production; UK (Q1 GDP, Industrial Production, Trade, BRC Retail Sales & RICS surveys) and China (CPI, PPI< Retail Sales, Industrial Production, FAI, Property Investment), Germany and many EU Q1 prov. GDP, Australian Unemployment, India CPI, WPI & Industrial Production

- Numerous Fed (including Powell), ECB, BoJ and BoE speakers

- Another deluge of govt bond auctions including US quarterly refunding

- Europe and Asia corporate earnings more plentiful than USA, as will corporate issuance which totalled more than $97.0 Bln last week, the third highest on record, with April's monthly record volume on course to be breached, perhaps even by the end of the week.

========================== ** THE DAY AHEAD ** ===========================