Trading with point and figure

[Dentalfloss]

ftse gettin into our 7164 pivot area

 

[Dentalfloss]

pivot area on dow 20057..ish

 

[Moneylender]

closed a short @ 20075, grabbed a good few there.

 

[Dentalfloss]

closed a short @ 20075, grabbed a good few there.

from our 20150 rez area ..??

 

[Moneylender]

from our 20150 rez area ..??

20125, waited until I was sure it had topped out

 

[Moneylender]

Morning

 

[Dentalfloss]

Morning

mornin Guv

 

[Dentalfloss]

- Light day for statistics leaves politics and central bank meetings in
Poland and New Zealand to grab the spotlight; EIA inventories, German
and US 10 yr auctions

- Poland rates: NBP likely to argue that rebound in CPI mostly due to
energy price base effects, and can "look though" short-term dip into
negative real rates

- RBNZ: seen on hold, unlikely to overplay rise in inflation expectations
given still very low CPI, subdued wage growth and 'overvalued' NZD

- Germany elections: SPD poll 'surge' may well prove to be transient

- Charts: EUR/PLN, Poland CPI, WTi Oil Future, TankerTrackers Inventories,
Brazil Oil Output, Brent/WTI spreads and OI, INSA Germany Opinion Poll

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

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

It is likely that today's statistical schedule will only have a local market impact, in so far as Japan's Economy Watchers (services) survey (unexpectedly dropping sharply) is generally ignored, and the only other item of note ahead of Japanese Orders tonight will be Brazil's IPCA IBGE Inflation data. Central banks may attract rather more attention with India's RBI delivering its expected rate cut, while ahead lies rate decisions in Poland and New Zealand, where the key question is whether unchanged rate decisions are accompanied by a more hawkish tone, or not. A quieter day in terms of government bond sales sees Germany and the US sell 10-yr. It is also weekly EIA inventories day, following on from yesterday's EIA monthly energy outlook, which saw estimates of global oil demand shaded lower (seemingly perennial), though this was mitigated by a downward revision to US 2017 oil output (with 2018 revised higher), even if the steady rise Brazilian output (see chart) offers a counterpoint. The weekly EIA inventories follow a whopping 14.2 Mln in the API's Crude inventories, more than 5x higher than the consensus forecast, however traders and @tankerTrackers estimates suggest that this does not in any way fit with the anecdotal evidence (see week 6 inventory chart), with a big hat tip to @chigrl, who observed: "Im calling a big fat red card on that crude number".

On the political front, Trump's bull in a china shop impression continues at a breakneck pace, with Yemen's decision to ban the US military from any local counter-terrorism interventions following last week's disastrous effort will only serve to heighten unease about Trump's foreign policy (if one can call it 'policy'). The IMF's divisions on participation in the Greek bail-out only add to heightened concerns about the Eurozone, even if some of the recent spread widening probably owes something to concerns that stronger growth in the Eurozone and a rapid unwind of energy and food price drag on inflation may force the ECB into an earlier than expected QE taper. In passing it is also worth noting that the 'surge' in support for the SPD in recent polls has clearly unsettled prior assumptions about the September federal elections. It should be said that the jump owes more to the fact that anyone was always going to be better than Sigmar Gabriel, and give the party a boost, with Schulz having the advantage of not being on the front bench for the SPD in the current coalition, and thus able to distance himself from coalition policies, and indeed from the Hartz IV labour reforms introduced by the previous SPD Schroder govt, which has alienated a large section of traditional SPD voters. This boost may however prove to be more of a flash in the pan, especially with such a long period until the actual election.

** Poland / New Zealand - Rate decisions **
As the attached EUR/PLN chart highlights, the Polish Zloty is nearing its best levels over the past year, though still some way off the range that had been in place prior to the 2015 general election. As much as the EUR is vulnerable to concerns about ostensibly rising political risk, it would be a leap of faith to suggest that Poland or the Zloty would might be a 'safer port in a storm', above all under the current government. Indeed the recent strength is rather attributable to the view that with CPI out of the disinflationary cycle that has been in place since the middle of 2014, Dec CPI printed at 0.8% y/y, while January is seen climbing to 1.7%, and 2017 GDP expected to recover to around 3.2% y/y, the NBP may well adopt a less accommodative, if not hawkish stance at today's meeting. The rhetoric from the NBP's MPC in January has however been at pains to emphasize a steady rate outlook for 2017, with more dovish members suggesting that a brief of negative real rates (as CPI rebounds) would be perfectly acceptable, even if growth were to accelerate. Others have adopted an ECB type line, arguing that once base effects have unwound, there will be little evidence of any major upward pressure on prices. A hawkish minority point to risks from a tight labour market, and indeed the government's benefits programmes. In all likelihood, the MPC will stick to a very neutral line on rates, and hint as strongly as possible at a steady rate profile well into H2 2017. The RBNZ faces a different set of dilemmas, with Wheelers' decision to stand down as governor in September to be replaced by Spencer adding a further dimension. Yesterday's rebound in Q1 Inflation Expectations (1-yr 1.56% vs. prior 1.29%, 2-yr 1.92% vs. prior 1.68%) does materially change the RBNZ's main 'bind', namely still low inflation (Q4 at 1.3% y/y vs. Q3 0.4% y/y), subdued wage growth despite a tight labour market and solid growth, and what it sees as a highly overvalued NZ$ against, against a very overheated housing market. All of which points to a likely neutral policy stance, which references all of the above factors, as well as considerable uncertainty in terms of the economic and political environment internationally, with the consensus seeing the OCR held at the current 1.7% for most of this year.

from Marc Ostwald

 

[Moneylender]

todays Dow map

 

[Dentalfloss]

todays Dow map

its a tricky one
do bulls pump our 20150 rez ..??

 

[Moneylender]

Dax map

 

[Dentalfloss]

nas 100...poss clue...maybe..??
has an internal that might get tested
chart comin

 

[Moneylender]

its a tricky one
do bulls pump our 20150 rez ..??

I am hoping so, I would rather short from 20150 than take the long here

 

[Moneylender]

but 20100 is looking tempting to short!!!

 

[Dentalfloss]

nas 100

 

[Dentalfloss]

but 20100 is looking tempting to short!!!

yes
nas has a pivot at 5170 and trend supp in 5040 area
it has broken out....whereas dow is just retesting highs

 

[Dentalfloss]

nas seems to be the most bullish..if that turns..??

 

[Dentalfloss]

its tricky....

 

[Moneylender]

got stung with an overnight divi adjustment on the Dow 24 points. ouch!!

 

[Dentalfloss]

gbpjpy gonna pump or dump 140.60