Dentalfloss
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our 24380 area hit
Trading with point and figure
- Thread starter Dentalfloss
- Start date
- Watchers 90
Dentalfloss
Legendary member
- Messages
- 63,404
- Likes
- 3,726
Dentalfloss
Legendary member
- Messages
- 63,404
- Likes
- 3,726
Dentalfloss
Legendary member
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back to test our 24300 supp area
Dentalfloss
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broken
Dentalfloss
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Dentalfloss
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mornin folks
Dentalfloss
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a quick look at the Dow
what do we see..??
a downtrend pulling back
question...How far will it rally ..??
what do we see..??
a downtrend pulling back
question...How far will it rally ..??
Dentalfloss
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ftse
tests trendline and oprev supp in 7660 area
tests trendline and oprev supp in 7660 area
Dentalfloss
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Dax updated
Dentalfloss
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index recoiling.....but to where..??
all about apetite for risk in a bad news climate
all about apetite for risk in a bad news climate
Dentalfloss
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ftse
2 downmoves
seems to have broken the lower one
7660 and then 7680 poss on cards
Dax ...a tad oversold
2 downmoves
seems to have broken the lower one
7660 and then 7680 poss on cards
Dax ...a tad oversold
Dentalfloss
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Dentalfloss
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dow over last 2 days
Dentalfloss
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24500-24550 a real dog
Dentalfloss
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24470 lining up..if we can hold 24400
Dentalfloss
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- Deluge of data would normally dominate proceedings, but Italian politics
rules the roost; German, Japan Retail Sales, French Consumer Spending
to be digested; focus on Spanish & German CPI, EC Confidence surveys,
US ADP Employment, revised Q1 GDP, Goods Trade Balance and Fed Beige
Book; Italy bond sales and Bank of Canada rate decision
- Leap in Spanish HICP underlines upside risks for German and Eurozone CPI
- Italy fall-out: a point lesson in the binary nature of political risk
pricing, but also broader implications in terms of total absence of
any form of risk premia, as well as regulation induced lack of liquidity
- US ADP Employment: typically agnostic consensus forecast sees solid gain,
surveys point to upside risk
- US Goods Trade Balance: wider deficit expected, underlining narrower
March deficit an anomaly rather trend change
- Fed Beige Book: likely to paint solid picture on growth, focus on
any change in corporate optimism due to trade tensions
- Charts: USD, EUR & GBP credit index spreads; VIX and V2X; Italy yields
and 2yr spread vs Germany
..........................................................................
********************
** EVENTS PREVIEW **
********************
By rights today's deluge of data accompanied by the Beige Book should offer some distractions from Italy/Eurozone political woes, but that is far from assured, with the added distractions of North Korea
and US / China trade tensions always capable of delivering a political headline from leftfield. Italy also stars on the auction schedule with a total EUR 6.0 Bln of 5 & 10-yr BTPs and 7-yr CCTs, which should be rather more orderly in bidding terms than the "fat tail" seen on the 6-mth BOT bill auction yesterday, the more so given that this week's EUR 20.0 Bln of redemptions far outweigh supply. Be that as it may, at the top of the data agenda are: German, Spanish, Belgian and Portuguese preliminary May CPI, German Unemployment, US ADP Employment and first revision to Q1 GDP, with the overnight UK BRC Shop Prices, Japanese and German Retail Sales to be digested, and a further accompaniment of the EC Confidence surveys, Swedish and Brazilian Q1 GDP as well as Canada's Q1 Current Account.
What yesterday's meltdown in Italian BTPs was a demonstration of is multi-faceted and has broader ramifications than some trite observation that the Eurozone crisis has never gone away. Firstly it underlines not only the lack of any political risk premium, which is not only difficult to price, but all too frequently is very binary, but also the lack of volatility premium, the blame for which lies largely with the impact of central bank QE on investor behaviour, which took a while to get traction, but is now almost intuitive and/or Pavlovian. It also demonstrated how bank capital regulation damages, if not destroys market liquidity in so far as banks are no longer willing or able to facilitate market intermediation. As such in moments of panic, price action is prone to become exponential, all too often at the drop of the hat in terms of individual equities, though this applies equally to bonds and credit. It underlines the inevitable day of reckoning that will occur as central banks tiptoe away from extreme accommodation will be brutal, it may well be harsher than 2008. In any case, there is an array of charts attached to peruse demonstrating the ripple effects across credit markets, not only in EUR, but also USD and GBP - it should be underlined that the spread widening was as much due to falling govt bond yields as rising credit yields.
** Germany / Spain - May prov. HICP **
- Given the turmoil in Italy, and the risks in Spain, it is debatable whether today and tomorrow's national and Eurozone inflation data get much traction, particularly as markets have now pushed the chances of an initial ECB rate move into H2 2019. Be that as it may, and as previously noted, a combination of adverse base effects, higher energy prices and to a lesser extent a weaker EUR are projected to jump Spanish HICP to 1.7% y/y from 1.1%, and German HICP to 1.9% from 1.6%, with tomorrow's Eurozone headline CPI seen at 1.6% from 1.2%, and core CPI to a still lowly 1.0% from 0.7%. The risks do appear to be to the upside, particularly given that the low Easter prints were exaggerated by Easter effects. ** Stop press - Spanish HICP smashed forecasts of 1.7% y/y with a rise of 2.1%.... and against April's 1.1% --- just what the ECB ordered...... oh wait, what about the political meltdown impact on ECB policy?
** U.S.A. - May ADP Employment / Q1 GDP first revision / April Goods Trade Balance / Beige Book **
- In terms of today's ADP Private Employment, the observation stands that while there have been large upside and downside 'misses' relative to the official Private Payrolls, the ADP survey has painted a picture of solid labour demand throughout the year. But as usual the projections for today are 'locked' to expectations for the official reading, with a very marginal dip from April's 204K to 190K seen. If the strength of any array of the May surveys (above all manufacturing) is any guide, then the risks are modestly to the upside. Q1 GDP is seen unrevised at 2.3% SAAR, which should see a small upward revision to Personal Consumption from the advance estimate of 1.1%. The advance Goods Trade Balance is seen widening quite sharply again to $-71.1 Bln, thus effectively consigning the much better than expected $-68.3 Bln for March to the category 'statistical quirk'. Last but not the Fed's Beige Book is likely again to describe the economy as seeing 'modest or moderate' growth, though it will be interesting to see whether rising trade tensions are causing concerns in the business sector, above all in outlook terms. An eye will also need to be kept on what is said about agricultural sector, given the long standing drought in key wheat growing regions.
** Canada - BoC rate decision **
- Unsurprisingly the BoC is seen holding rates at 1.25%, with both the BoC and markets are taking a very fluid view of what might happen at its 11 July meeting (see rate probabilities table attached). For all that the gyrations of the CAD in response to oil price movements may have some modest impact on inflation, the BoC remains primarily focussed on what has been a very patchy CapEx picture, which in no small part owes much to the BoC's other key concern, the outcome of the NAFTA talks.
from Marc Ostwald
rules the roost; German, Japan Retail Sales, French Consumer Spending
to be digested; focus on Spanish & German CPI, EC Confidence surveys,
US ADP Employment, revised Q1 GDP, Goods Trade Balance and Fed Beige
Book; Italy bond sales and Bank of Canada rate decision
- Leap in Spanish HICP underlines upside risks for German and Eurozone CPI
- Italy fall-out: a point lesson in the binary nature of political risk
pricing, but also broader implications in terms of total absence of
any form of risk premia, as well as regulation induced lack of liquidity
- US ADP Employment: typically agnostic consensus forecast sees solid gain,
surveys point to upside risk
- US Goods Trade Balance: wider deficit expected, underlining narrower
March deficit an anomaly rather trend change
- Fed Beige Book: likely to paint solid picture on growth, focus on
any change in corporate optimism due to trade tensions
- Charts: USD, EUR & GBP credit index spreads; VIX and V2X; Italy yields
and 2yr spread vs Germany
..........................................................................
********************
** EVENTS PREVIEW **
********************
By rights today's deluge of data accompanied by the Beige Book should offer some distractions from Italy/Eurozone political woes, but that is far from assured, with the added distractions of North Korea
and US / China trade tensions always capable of delivering a political headline from leftfield. Italy also stars on the auction schedule with a total EUR 6.0 Bln of 5 & 10-yr BTPs and 7-yr CCTs, which should be rather more orderly in bidding terms than the "fat tail" seen on the 6-mth BOT bill auction yesterday, the more so given that this week's EUR 20.0 Bln of redemptions far outweigh supply. Be that as it may, at the top of the data agenda are: German, Spanish, Belgian and Portuguese preliminary May CPI, German Unemployment, US ADP Employment and first revision to Q1 GDP, with the overnight UK BRC Shop Prices, Japanese and German Retail Sales to be digested, and a further accompaniment of the EC Confidence surveys, Swedish and Brazilian Q1 GDP as well as Canada's Q1 Current Account.
What yesterday's meltdown in Italian BTPs was a demonstration of is multi-faceted and has broader ramifications than some trite observation that the Eurozone crisis has never gone away. Firstly it underlines not only the lack of any political risk premium, which is not only difficult to price, but all too frequently is very binary, but also the lack of volatility premium, the blame for which lies largely with the impact of central bank QE on investor behaviour, which took a while to get traction, but is now almost intuitive and/or Pavlovian. It also demonstrated how bank capital regulation damages, if not destroys market liquidity in so far as banks are no longer willing or able to facilitate market intermediation. As such in moments of panic, price action is prone to become exponential, all too often at the drop of the hat in terms of individual equities, though this applies equally to bonds and credit. It underlines the inevitable day of reckoning that will occur as central banks tiptoe away from extreme accommodation will be brutal, it may well be harsher than 2008. In any case, there is an array of charts attached to peruse demonstrating the ripple effects across credit markets, not only in EUR, but also USD and GBP - it should be underlined that the spread widening was as much due to falling govt bond yields as rising credit yields.
** Germany / Spain - May prov. HICP **
- Given the turmoil in Italy, and the risks in Spain, it is debatable whether today and tomorrow's national and Eurozone inflation data get much traction, particularly as markets have now pushed the chances of an initial ECB rate move into H2 2019. Be that as it may, and as previously noted, a combination of adverse base effects, higher energy prices and to a lesser extent a weaker EUR are projected to jump Spanish HICP to 1.7% y/y from 1.1%, and German HICP to 1.9% from 1.6%, with tomorrow's Eurozone headline CPI seen at 1.6% from 1.2%, and core CPI to a still lowly 1.0% from 0.7%. The risks do appear to be to the upside, particularly given that the low Easter prints were exaggerated by Easter effects. ** Stop press - Spanish HICP smashed forecasts of 1.7% y/y with a rise of 2.1%.... and against April's 1.1% --- just what the ECB ordered...... oh wait, what about the political meltdown impact on ECB policy?
** U.S.A. - May ADP Employment / Q1 GDP first revision / April Goods Trade Balance / Beige Book **
- In terms of today's ADP Private Employment, the observation stands that while there have been large upside and downside 'misses' relative to the official Private Payrolls, the ADP survey has painted a picture of solid labour demand throughout the year. But as usual the projections for today are 'locked' to expectations for the official reading, with a very marginal dip from April's 204K to 190K seen. If the strength of any array of the May surveys (above all manufacturing) is any guide, then the risks are modestly to the upside. Q1 GDP is seen unrevised at 2.3% SAAR, which should see a small upward revision to Personal Consumption from the advance estimate of 1.1%. The advance Goods Trade Balance is seen widening quite sharply again to $-71.1 Bln, thus effectively consigning the much better than expected $-68.3 Bln for March to the category 'statistical quirk'. Last but not the Fed's Beige Book is likely again to describe the economy as seeing 'modest or moderate' growth, though it will be interesting to see whether rising trade tensions are causing concerns in the business sector, above all in outlook terms. An eye will also need to be kept on what is said about agricultural sector, given the long standing drought in key wheat growing regions.
** Canada - BoC rate decision **
- Unsurprisingly the BoC is seen holding rates at 1.25%, with both the BoC and markets are taking a very fluid view of what might happen at its 11 July meeting (see rate probabilities table attached). For all that the gyrations of the CAD in response to oil price movements may have some modest impact on inflation, the BoC remains primarily focussed on what has been a very patchy CapEx picture, which in no small part owes much to the BoC's other key concern, the outcome of the NAFTA talks.
from Marc Ostwald
