Trading with point and figure

there is a support looming
lookin at p/f now
chart comin

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Ostwald, Marc
09:14 (18 minutes ago)

to Marc





- Quieter day in data terms dominated by Services PMIs; rate decisions
due in Canada, India & Poland; ECB speakers; US rates & equity markets
closed

- Services PMIs; Asia readings OK, Eurozone readings still indicating
solid pace of sector activity: UK PMI expectations perhaps skewed
to upside after better Manufacturing & Construction prints

- Canada rates: no change, likely to leave door open for January rate
hike, but Fed rate doubts spilling across the border

- India rates: firmer INR, lower Oil prices, GDP miss, financial sector
woes offer strong rationale for RBI hold

- Poland rates: no change expected, but dissent on rate outlook building

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** EVENTS PREVIEW **
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Central bank policy decisions in Canada, India & Poland, the BoE's complete bank 'stress test report and a number of ECB speakers, along with Services PMIs and UK car sales dominate this US day of national mourning for the late President George HW Bush, with Powell's originally scheduled testimony on the economy postponed (date as yet not specified), and the ADP Employment, Services surveys and EIA inventories report pushed back to tomorrow (which also sees the OPEC+ meeting). NYSE & CBOT equity and rates markets will be closed, other markets will be open. As for the Brexit debate in the UK parliament, the very simple point is this, those that blame 'unelected EU officials' for the UK's economic woes are guilty of myopia, the problems were and are 'made in Westminster' and it is disingenuous to blame migrant workers or indeed those 'unelected' EU officials, when this farce of a UK parliament underlines that the UK is in principle a rudderless economy, with parliament merely a vassal to deeply entrenched vested interests.

** World ex-USA - November Services PMIs **
- While Monday's Manufacturing PMIs painted a rather downbeat picture for the sector in Asia and the Euro area, today's Services reports should, with the expected exception of Italy, be generally much more positive in terms of implied levels of activity. The UK survey (forecast 52.5 vs. Oct 52.2), while clearly subordinate to the ongoing debate in parliament on the Brexit 'agreement', will be of of particular interest after better than expected Construction and Manufacturing PMIs, even if the latter reflected inventory stockpiling in anticipation of Brexit, with the Orders index dropping; still this will probably skew market expectations to the upside of the consensus.

** Canada, India & Poland - rate decisions **
- In terms of the Bank of Canada, no change is expected at this week's meeting, but it is expected that its statement will leave the door for a further hike at the 9th January 2019 meeting firmly open, though having pushed back on the Fed's rate hike trajectory, markets are now also starting to speculate about when the BoC might pause, though the consensus still sees 3 rate hikes in total for 2019. In India, a firmer INR, sharply lower oil prices, and a generally weaker inflation trend and the prospect of further state spending cuts, not to mention the obvious bottlenecks in terms of credit availability, and the slightly disappointing Q3 GDP data are likely to offer the RBI a solid rationale for keeping rates on hold. Poland's NBP is expected to keep rates at 1.50%, and while the minutes of the November meeting highlighted that there was a sitting motion for for a 25 bps rate hike (which was rejected), and that some MPC members felt a rate hike might be justified in the months ahead. However the MPC majority continues to expect rates to remain unchanged in coming quarters, and while headline CPI is forecast to be above target in 2019 at 3.2% due to the already announced utility price hikes, and only slow to 2.9% in 2020, core CPI is seen at 2.1% in 2019, though rising to 2.7% in 2020. The immediate challenge for the NBP is of a rather different nature, namely dealing with the corruption scandal against the former head of financial regulator KNF and which has engulfed Getin Noble and Idea Bank, though it should be emphasized that the NBP has not been implicated.

from Marc Ostwald
 
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