Trading with point and figure

DAX Into the open

2chb9sx.png
 
upper boundary of that channel is 13216-13248 area/yellow line

lower is 12960-12992 area
hence 13K was resilient yesterday
 
Services PMIs dominate schedule, as UK BRC Retail Sales and as expected
no change from RBA are digested; US Trade, Poland rate decision and UK
5-yr Gilt auction also on tap

- Eurozone PMIs: Italy and Spain seen affirming solid pace of activity in
Euro area

- UK Services PMI: modest dip expected, though solid Manufacturing PMI and
much better than expected Construction PMI impart upside risks, but GBP
assets likely more focussed on Brexit negotiations

- US Non-manufacturing ISM: expected to dip from 12-yr high, but still
signalling robust pace of activity

- US Trade Balance: Goods balance points to substantial widening in
deficit, net exports set to be substantial drag on Q4 GDP

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

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

A busier day in terms of statistics is dominated by the usual array of Services PMIs on the third working day of the month, with the overnight UK BRC Retail Sales & Australia Q3 Current Account to digest ahead of South African Q3 GDP and the US overall Trade Balance. As expected Australia's RBA kept its policy rate unchanged and signalled no change in the short to medium-term, which Poland's NBP will more than likely echo, when it announces its policy decision later. As the major 7 December UK Gilt coupon payment date looms in the headlights, the UK's DMO sells £2.75 Bln of 2023 Gilts (ahead of £2.25 Bln 2047 on Thursday), while the UK also sees the minutes of the November BoE FPC meeting.

** World - Nov Services PMIs / ISM **
Following on from a rather mixed run of Asian Services PMIs, with India and Japan softening quite sharply, but China improving, the focus turns to Italy, Spain, UK and US. The Italian and Spanish readings are expected to echo the solid outturn for the Eurozone, while the question for the UK is whether there is a clean sweep of improvements after a robust Manufacturing reading and an unexpected rebound in the Construction PMI, even if the latter was very uneven with residential construction picking up further, while commercial and civil continued to contract. Eminently the failure to reach an agreement with the EU in the first stage of negotiations due to an effective veto by Northern Ireland's DUP will likely be the stronger influence in terms of UK asset price performance today. As for the Non-manufacturing ISM, this is expected to dip from a 12-yr high of 60.1 to a still very robust 59.0, more than underlined by expectations that the Business Activity sub-index is seen only marginally lower at 61.5 vs. October's 62.1.

** U.S.A. - Oct Trade Balance **
- With the advance Goods Trade Balance widening more than expected to $-68.3 Bln, it is little surprise that today's overall Trade Balance is seen $4.0 Bln wider at $-47.5 Bln. This would be very substantially wider than the average $43.0 Bln for Q3, and as such it suggests that Net Exports will be a fairly substantial drag on Q4 GDP, in the region of -0.5 ppt according to the Atlanta Fed's GDPnow estimate.

from Marc Ostwald
 
breaking news
Theresa May wants the irish to have Scotland as part of brexit deal

talks have now broken down
 
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