Trading with point and figure

oil
trend brea/green
recoiling into rez
needs to stay above 50.00
poss new uptrend ..??
 

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- Busier schedule of data & events to focus on digesting China CPI, PPI,
Singapore Q3 GDP ahead of UK Construction Output, US Retail Sales, PPI;
Yellen, Rosengren and gaggle of BoE speakers including Carney accompany
BoE bank liabilities surveys; US Corporate earnings dominated by banks

- China CPI, PPI: "deflation exporter" no more, but at what cost in
terms of sector debt accumulation?

- Singapore Q3 GDP: contagion from weak global trade gaining traction,
underlined by weakness of Retail Sales

- US Retail Sales: headline sales to be boosted by Autos and gasoline
prices, core sales seen posting smaller gain; may allow for upward
revision to Atlanta Fed Q3 GDPnow private consumption estimate

- US PPI: seen posting modest gain, pointers from Import and Export prices
suggest few signs of any major pressures; food vs energy likely to be key

- Fed speak: Harker election remarks let 'cat out of the bag' on
politicization; hawkish Rosengren vs. dovish Yellen in focus

- Charts: Weekly EIA stats, China PPI vs. Global Commodity Prices, WTI

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

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

If the daily calendar of data and events during this week have been rather sparse, then today's schedule should help to compensate. Statistically there are the China inflation data & provisional Singapore Q3 GDP to digest ahead of the ever erratic UK Construction Output and, more significantly, US Retail Sales, PPI and Michigan Sentiment. Yellen tops the schedule of central bank speakers, though there will be plenty of interest in what Carney and his Bank of England colleagues have to say as they "reach out" to businesses and the public with its "Future Forum" in various parts of the Midlands. The consensus according to the latest Reuters poll continues to expect a further 15bps BoE rate cut by the end of the year (i.e. at the November Inflation Report meeting), which seems improbable when one considers that the MPC has already acknowledged that incoming data has not been as weak as it had forecast, and the more so given that its inflation forecasts look to be very optimistic (i.e. too low) given the likely rapid pass through of the latest bout of GBP weakness. The BoE will also publish its credit conditions and bank liabilities surveys, with property lending likely to come in for particular scrutiny. Oil price gyrations will also continue to be closely monitored, as yesterday's dip after the much stronger than expected in EIA crude stock estimates was swiftly reversed given the drop in gasoline stocks. The latter tends to suggest that the market is rather more concerned about any potential product overhang again derailing rallies in crude, as it did in Q2 (see attached EIA summary charts via Reuters' John Kemp). That said, this may be a case of speculators self-interest, given the known hefty accumulation of longs in RBOB gasoline futures. Last but not least JP Morgan and Citi are among the banks who top the run of US Q3 Corporate Earnings today.

** Singapore - Q3 GDP / China - September CPI, PPI ** Another disappointing set of Singapore Q3 GDP data, with SAAR GDP down 4.1% q/q was not as some expected met with any monetary policy response from MAS, though this may be a case of MAS waiting to see when and what the Fed does next. It was rather unsurprising given the well documented weakness in global trade, above all Asian/EU trade, weighing on the shipping/marine sector. But with Retail Sales also very weak above all ex-Autos at -6.5% y/y, the short-term auspices for the Singapore economy stand under a rather large cloud, which monetary policy can do little to change. As for the higher than expected China inflation data, these at least should serve to allay concerns about China exporting deflation to the rest of the world, as well as the rise in CPI putting any notion that the PBOC might consider cutting rates to boost the economy firmly out of the window. While the headlines will talk of the first positive PPI reading in y/y terms since January 2012, the attached chart of Chinese PPI vs. the Global Commodity Price Index underline that it is primarily a function of the latter, rather than being a proxy for domestic demand, though the uptrend will leave the Chinese erring on the side of stockpiling commodities in the short-term. Equally, it has to be the huge capacity overhang and rapid accumulation of debt in the manufacturing sector to offset the pressure on margins from the protracted weakness in PPI is perhaps the more salient point, and the more relevant aspect for China's economy going forward

** U.S.A. - Retail Sales / PPI / Fed speak **
- For US Retail Sales, the strength of Auto Sales and a price related boost from gasoline sales are expected to pace the 0.6% m/m headline rebound from August's disappointing -0.3% m/m and July's 0.1%, with the core ex-Autos and Gasoline measure seen up a more modest 0.3% m/m after an August slip of -0.1%. This would still leave Private Consumption for Q3 looking rather sluggish, even if it was always clear that the Q2 4.2% SAAR was not sustainable, though solid headline and core readings today should allow for an upward revision to the Atlanta Fed's GDPnow current estimate of 2.0%. PPI is expected to rise 0.2% m/m at the headline level, which thanks to energy base effects, this would see the y/y rate jump to 0.6% from August's 0.0%; core PPI is seen up a marginal 0.1% for a 1.2% y/y rate. The pointers from Import and Export Prices data yesterday suggest that energy will only exercise modest upward pressure in m/m terms, while Food and other non-energy prices were broadly neutral. In Fed policy terms, such outturns are unlikely to be game changers for the very entrenched and divided opinions on the appropriate path for policy. Be that as it may, the newly hawkish Rosengren pitches up against the dovish Fed chair Yellen this afternoon, in what should be an interesting contrast of views at the Boston Fed's annual economics conference. The hawkish leaning, but non-voting Mr Harker from the Philadelphia Fed appears to have thrown some oil on the other fire that is burning in the policy debate, namely that the Fed has been politicized, given his comments that the Fed 'may want' to delay a decision on a rate hike until after the election. While this is the market consensus, it is an effective dementi to the oft repeated central bank mantra that elections are in and of themselves not a bar to taking monetary policy decisions/action. At the very least it may offer the opportunity to ask an awkward question in any Q&A sessions at today's conference.


from Marc Ostwald
 
dax in our 10500 rez RE
ftse in our 7018-7029 rez area
oil in rez
cable...messy
what next ..??
 
Last edited:
1.2215..prev supp..now rez
needs to pump that
p/b needs to stay above 1.2190..ish
first rez 1.2237
reasonable supp in 1.2183-1.2189
 
Re:Cable, the rot has been stopped for now.

See new range bound move between 1.21 - 1.23.
PP 1.2220 ish.
Feel we need to break above 1.2350s to breakout of this range.

Feel the greater probability is upwards in short TF.

Longer term subject to uncertainties still bearish.
 
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