Trading with point and figure

spx

since 5th september

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- Digesting Fed and RBNZ, awaiting Norway and EM central bank rate decisions,
UK CBI Industrial Trends, US Jobless Claims and Existing Home Sales

- Norway rates; Norges Bank likely to ditch easing bias, given CPI firmly
over target and growth, unemployment clearly picking up

- Fed: Yellen as self-contradictory as ever, FOMC divisions underlined by
three dissents; Yellen still inviting markets to be oversensitive to
even the most marginal of weaknesses in data; "data dependency" a farce

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

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

Bank of Japan tick, FOMC tick, RBNZ tick, and now we move onto Norway, Indonesia, Philippines, South Africa and Turkey for today's central bank agenda, with ECB speak via Mr Draghi thrown in for good measure, along with BoE speak from BoE's Forbes, Carney and Cunliffe. The statistical schedule is again very modest featuring the UK CBI Industrial Trends survey, US weekly jobless claims and Existing Home Sales, while the US re-opens its current 10-yr TIPS benchmark. Oil price gyrations will continue to be closely monitored, as the focus moves to next week's IEF forum in Algeria (26-28 Sept), while quarter end considerations also move into the limelight, as markets start to contemplate the key event risk for Q4, the US presidential election. Of the central banks meeting today, perhaps the most interesting will be Norway's central bank, above all as it face a rather different dilemma to the rest in Europe, namely that inflation is now well above its 2.5% target, and has been since January 2016 in headline terms (currently 4.2%), and underlying (core) terms since June 2015, yet it retains an easing bias. Eminently the NOK has been rather stronger than Norges Bank had been assuming in June, but at 9.26 vs EUR, it is still well within the trading range that has prevailed since March. Given that Unemployment is now on a clear downtrend, growth indicators continue to gather pace, and the housing market is clearly overheated, it would be very surprising if it did not drop its easing bias. After a much better than expected set of French Manufacturing Confidence readings (103 vs. expected 101, with sharp jumps in production outlook indicators), which often do not offer a reliable signal of a pick-up in official output data, attention turns to the UK CBI Industrial Trends survey, with Orders seen unchanged at -5, while the selling prices index is forecast to rise again, to 10 from 8. US Initial Claims are expected to remain close to historical lows, while the more reliable FHFA House Price measure is seen posting a relatively contained 0.3% m/m rise. After falling 3.9% m/m in July, Existing Home Sales are seen rebounding 1.1% to a very solid 5.45 Mln SAAR pace, whereby any unexpected downside miss will more likely be attributable to low inventory levels, rather than presaging a weakening of housing demand.

So what of the Fed? Three dissents including the once ueber-dovish Rosengren says a lot about the divisions between the Fed board and regional Fed presidents. Yellen admitting that her forecasting abilities are very poor (“I can assure you that any specific projections I write down will turn out to be wrong, perhaps markedly so.”), but then having the chutzpah to suggest that the long term neutral rate was lower than previously thought, and that there is more slack in the labour market than previously thought, clearly makes a mockery of a 'data dependent' policy. Eminently she hinted at a December rate move, as did the dot plot (though there are 3 vs 0 in June seeing no rate hike in 2016), but the fact remains that while markets may currently be discounting a 60% chance of a December move, Yellen still underlined the Fed's asymmetric bias. In other words, any weaker than expected (but not necessarily weak) readings (above all Unemployment, CPI, Consumer Spending) should be construed as an invitation to markets to reduce the chance of a December move. As with the BoJ, Yellen made it clear it wants to see inflation Overshoot (just not so much as to make the FOMC look even more incompetent than it already does, and in turn this will have markets looking over to the ECB, and speculating that it might strike a similar tone.

from Marc Ostwald
 
dentist007 said:
dax and ftse ..poss p/b
only in the back of my mind
take the signals and have a clean mindset
Click to expand...

I try and have a "clean" mind everyday..... some days better than others lol

ftse 6880 rez marked, popped up on q' first up, nice pullback. Could re-rest.
Your 6848 marked as possible pullback and sp zone (6850 entry, bounce L)
6820 support zone.

Price coiling now deciding which way to go.
 
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