Trading with point and figure

dow

2lky7py.gif
 
that chart is a real dog....yu just dont know whether its a bull flag .... or just a recoil

****....i hate it
 
- End of quarter likely to temper market activity on another very busy
day for statistics; overnight Japan CPI, Production, Jobs and spending,
China PMIs and Dudley comments to digest; Eurozone CPI, Canada GDP,
US Personal Income/PCE and Chicago PMI, more Fed speak and more
details on Brexit negotiation process

- China: solid PMIs unlikely to deflect concerns over US/China relations
ahead of Xi Trump meeting next week

- Japan: production and unemployment fall cannot disguise obvious weakness
in domestic demand signalled by CPI and Household Spending

- Eurozone CPI: German, Spanish CPI point to weaker than expected outturn,
but largely due to Easter timing effects

- US Personal Income / PCE: real PCE seen rebounding from Jan fall, Dudley's
less dovish tone perhaps the more relevant factor

- Charts: China NBS PMI Employment Indices, WTI Oil future

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

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

The end of Q1 2017 is upon us, and for many financial market participants, it has been a quarter that never really got started. A quarter that was supposed to break up the concrete of TINA and the QE/NIRP/ZIRP stranglehold of the past 5-7 years. A quarter that was meant to build on last year's political 'shocks', but which frankly has only lived up to Shakespeare's "but a walking shadow, a poor player that struts and frets his hour upon the stage, and then is heard no more: it is a tale told by an idiot, full of sound and fury, Signifying nothing." Today's busy run of statistics will doubtless elicit a similar market reaction to the rest of the quarter. Be that as it has plenty to consider for those of a macro minded bent - China NBS PMIs, Japan and Korea Industrial Production; Japanese, Eurozone, French, Italian and Polish CPI, German Unemployment, UK Index of Services and final Q4 GDP, Canadian monthly GDP and US Personal Income, PCE and Chicago PMI, and of course some more Fed speak. The run of overnight data offered a generally positive profile of activity in Asia, above all the pick-up in the Chinese official PMIs, with Services activity at a near 3-yr high, while labour demand finally appears to have turned a corner after protracted period of weakness. In that respect this article in the South China Morning Post is worth noting, even if it elicits a good deal of scepticism: "China central bank paper claims Beijing can make ‘impossible trinity’ possible" http://www.scmp.com/news/china/econ...bank-paper-claims-beijing-can-make-impossible . However a combative tone from Trump on China / US trade imbalance puts the focus firmly on his 6-7 April meeting with President Xi. As for Japan, the stronger than expected Industrial Production and a fresh 23-yr low in Unemployment cannot disguise the fact that domestic demand remains weak, with CPI failing to get any traction above zero, and Household Spending posting yet another fall; all of which offers a strong counter to BoJ claims that its QQE is starting to reap rewards for the economy.

** Eurozone - March CPI **
A much lower than expected Eurozone CPI has been well flagged by the Spanish, German and Belgian readings yesterday, and will likely be accompanied by a fall in core CPI against expectations of a very low and unchanged 0.8% y/y, which should have the ECB's many doves cooing at a deafeningly high volume level, though the risk of an equally sharp rebound in April due to Easter timing effects (let alone if oil prices were to recover their March losses) is all too apparent.

** U.S.A. - Feb Personal Income / PCE **
- Personal Income is expected to post a solid 0.4% m/m gain, while PCE is forecast to post a modest 0.2% m/m gain echoing the meagre increase in Retail Sales, though with the headline PCE deflator seen at just 0.1% m/m and core at 0.2%, Income will at least be rising in real terms after a very flat or negative profile in recent months. Be that as it may, if forecasts prove to be correct, then Personal Consumption will make an at best marginal contribution to Q1 GDP, even if this proves to be a transient feature. Indeed an upbeat tone on the economy from NY Fed's Dudley in his overnight comments is perhaps the more notable event, though it perhaps reflects the FOMC's desire to ensure that markets do not row back too far on the Fed rate trajectory for this year, and as such sticking to the relatively unified tone on the policy outlook that was very evident in the weeks prior to the March rate hike. Dudley will speak again today.

from Marc Ostwald
 
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