Trading with point and figure

on twittwer
ECB pledsges buying buying shedloads of BTP
Talbs saying it could move all other asset classes
beware of opening action
 
ECB front loading its asset purchases from Nov 29 to 21 Dec to allow pause between Xmas and New year
 
FTSE

our 6810 rez area..again

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I'm beginning to think oil may have topped and in need of some retrace to verify support.

52 has been stiff resistance in the past and so possibly worth a short punt.

If we don't make another HH I reckon it will test support at 51 for starters and maybe even 50.


Cable seems to be building on its gains and 1.27 now acting as support. As soon as 1.2740 is taken out we'll see 1.28s.
 
- Digesting German Orders surge, disappointing Japan Wages and Australia
Q3 Current Account, awaiting Eurozone final Q3 GDP ahead of US/Canada
Trade and US Factory Orders; UK to sell 10-yr; EIA S-t Energy Outlook

- German Orders: capital goods pace surge flagged by surveys, points
to rebound in Q4 GDP

- US Trade Balance: sharply wider deficit already flagged by Goods balance,
implies net exports to weigh on Q4 GDP

- US Factory Goods Orders: solid gain expected, but Durables seen revised
lower

- Charts: EUR 3-mth X-ccy Basis Swap, EUR/GBP, Germany 2-yr Yield

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

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

How the post-referendum political landscape evolves in Italy will remain a key overarching theme, along with the array of other political uncertainties, but there is plenty more to consider on today's schedule of data and events. Statistically there are the Japan wages (weighed down by a fall in overtime pay and special payments with regular pay picking up), softer than expected UK BRC Retail Sales and Australian Q3 Current Account (with net exports unexpectedly set to drag on tomorrow's Q3 GDP) to digest alongside the much stronger than forecast German Factory Orders (4.9% m/m vs. expected 0.6%, finally corroborating survey upticks and hinting at Q4 GDP in the 0.5%/0.6% q/q area) and slightly weaker than expected South African Q3 GDP. Ahead lies the detailed report on Eurozone Q3 GDP, US and Canadian Trade and revised US Q3 Non-farm Productivity. On the policy side of the equation, the RBA left policy unchanged as expected and unsurprisingly implied a steady policy outlook; EU Finance Ministers meet to discuss, amongst other things, the fund for 'strategic investments', the impact of which has thus far been negligible in terms of boosting EU growth, while oil markets will have the EIA's monthly short-term energy outlook to consider. Ahead of tomorrow's hefty flow of coupon payments, the UK sells a further £2.5 Bln of its 2026 10-yr benchmark Gilt. Perhaps the only surprise about yesterday's post Italy referendum was the extent of the EUR rally, though this appears again to be a case of rapid short-covering after the knee-jerk dip in the EUR in reaction to the Italian referendum was wrong footed, with stops triggered above all on EUR/GBP, which is in many ways unsurprising in so far as the GBP always looked to be a rather poorly reasoned 'safe haven' from any Eurozone turmoil that might have (or might still) emerged. Mr Carney's speech on "The Spectre of Monetarism" - video here: http://www.bankofengland.co.uk/publications/Pages/speeches/2016/946.aspx text here: http://www.bankofengland.co.uk/publications/Documents/speeches/2016/speech946.pdf - is well worth a read, and marks a welcome return to form and a very clear acknowledgement that it is politicians that need to "step up to the plate" if the ever more deep seated inequalities that have fuelled the current wave of populism, are to be addressed. As he notes: "The combination of open markets and technology means that returns in a globalised world amplifies the rewards of the superstar and the lucky. Now may be the time of the famous or fortunate, but what of the frustrated and frightened?"

** U.S.A. - October Trade Balance / Factory Orders **
- Given the already reported widening in the Goods Trade Balance, it is unsurprising that today's overall Trade Balance is expected to widen sharply to $-42.0 Bln from a much better than expected $-36.4 Bln in September. The surprise in the Goods balance was the relatively sharp drop in exports, rather than the rebound in imports, which had appeared to be artificially depressed in September. Be that as it may, it would imply that in contrast to Q3, net exports are likely to be a substantial drag on Q4 GDP, even if Trade deficits in November and December revert (narrow) to longer term averages around $-40.0 Bln. Factory Orders generally attract limited attention, having been largely pre-empted by the Durable Goods Report, though with the latter expected to be revised down to 3.4% m/m from a provisional 4.8%, and the ex-Transport seen at 0.5% vs. a provisional 1.0%, today's report may garner rather more attention than usual, with headline Factory Orders seen at 2.6% m/m.


from Marc Ostwald
 
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