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Boeing in support....will it hold..??
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Mornin folks 
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do we stay above or drop below..??
do we stay above or drop below..??
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cable updated
our lines are workin well...so far
our lines are workin well...so far
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Good Morning: The Long & the Short of it and The Bigger Picture - 10 April 2019 - ADM ISI
Ostwald, Marc
09:01 (11 minutes ago)
to Marc
- Peak day for event risk with busy schedule of data - Japan Orders,
Norway CPI, French Production to digest; UK GDP and activity data,
trade and US CPI ahead; Brexit summit, ECB meeting, FOMC minutes and
OPEC monthly oil market report: Germany, Finland and US bond auctions
- UK GDP / Production: mean reversion expected after January rebound,
underlying profile suggesting at best weak growth
- Brexit summit: longer extension mostly likely with many conditions
- Germany: low Rhine water levels a very real threat to the economy
- Norway: CPI offers solid rationale for modestly more hawkish Norges
Bank stance, though GDP setback implies some caution likely
- US CPI: energy to pace expected rebound in headline, core seen just
above target, airfares a potential wild card
- US FOMC minutes: focus on discussions on economy, and Fed balance sheet
- Morning Call audio preview:
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-10-april-2019/
..........................................................................
********************
** EVENTS PREVIEW **
********************
Today's calendar could not be more heavily geared in terms of event risk with the EU Brexit summit, ECB meeting and FOMC minutes accompanying a very busy day for major data: ranging from the overnight Japan Machinery Orders and Norway CPI and onwards to UK monthly GDP and accompanying dump of activity data to US CPI. OPEC also publishes is monthly oil market report, just as Russia and Saudi Arabia hint at an end to, or at least an easing of the production cuts agreement, while the govt bond auction calendar has German 5 yr, Finnish 7 & 28-yr and US 10-yr slated. The becalmed price action in many asset classes and FX rates could thus be in for something of a 'wake up' call. In terms of the overnight run of economic data, the smaller than expected rebound in Japanese Machinery Orders (1.8% m/m vs. expected 2.8%) was paced by a recovery in Export Orders, however the 19.0% m/m jump follows an 18.1% m/m slide in January, thus suggesting the underlying trend is at best flat in Q1. Norwegian CPI is reviewed below, while France offered a further signal that the manufacturing sector is recovering with 1.1% m/m rise in Manufacturing Output against a forecast fall of -0.4% m/m, and January's revised 0.7% m/m. One other item that needs to be watched very carefully is news that water levels are running dangerously low on the Rhine, and may prove to be too low to support major shipping traffic again this year, significant rainfall is required in the next few weeks to avoid this. See https://www.bloomberg.com/news/arti...uld-run-too-low-again-for-shipping-in-germany, and as a reminder 38% of all goods traffic in Germany goes via the Rhine - for a graphic see:
https://www.inland-navigation-marke...8/q2/2-freight-traffic-on-inland-waterways-2/ ; gasoil demand would be the first market to be hit, if this risk does crystallize. Given the dreadful state of many parts of the autobahn network, with long sections condemned as unfit for traffic and being repaired gradually, traffic would probably have to be diverted to the railways.
** U.K. - February GDP, Index of Services, Production & Trade **
- Today's rather moot (given Brexit risks) run of data is projected to show monthly GDP stalling (flat m/m) after unexpectedly jumping 0.5% m/m in January, leaving the 3mth/3mth measure unchanged at 0.2% q/q, and as ever much will depend on the Index of Services which will likely slow from 0.3% in January. Industrial Production and Manufacturing Output will also likely slow to 0.1% m/m and 0.2% m/m respectively after unexpected strength in January, though base effects from last year's 'beast from the East' implies y/y rates improving modestly, but remaining negative at -0.8% and -0.6%. The ever volatile Construction Output will also likely stall m/m after a surprising 2.8% m/m in January.
** U.K./EU - Brexit summit **
- Prior to the summit, there will be further negotiations between the two main political parties on trying to find a compromise that would enable passage of May's "Withdrawal Agreement", though indications suggest that labour demands for a Customs Union and indeed a second referendum as a quid pro quo are proving to be a very high hurdle, which is unsurprising given the overall evolution of the Brexit political process since the June 23 referendum. Mrs May will then hold PM question time before heading off to Brussels for the summit. The EU ambassadors meeting fashioned a draft resolution which clearly favours a longer extension than the June 30 date requested by the UK government with EU officials stating that they sort little chance of the issues being resolved by that date. The counter proposal is for an extension to either 31 December or 31 March 2020, with key provisos being that a) the UK holds EU parliament elections on 23 May; b) that the UK commits to not disrupting EU business, for example preparation of the next budget, and that the UK's influence "would be sharply reduced and its voice muted"; c) that the UK does not make any requests to change the "Withdrawal Agreement" (WA); d) an option to leave earlier if the WA and political declaration are ratified before whatever extension date is agreed upon.
** Norway - March CPI **
- Yesterday's sizeable miss on monthly GDP (Mainland -0.3%, Overall -0.4% m/m), which went against the grain of much other recent data and surveys, and by extension also against the modestly more hawkish from Norges Bank at its recent policy meeting, effectively put a good deal more weight on today's CPI, even if the GDP data are often 'noisy'. In the event, CPI once again beat expectations at 0.2% m/m 2.9% y.y vs. a forecast of Flat/2.8% and February's 3.0% y/y, while underlying (core) CPI came in at 0.3% m/m 2.7% y/y vs. a forecast of 0.1%/2.5%, and February's 2.6% y/y.
** Eurozone - ECB meeting **
- Today's meeting will probably deliver little in the way of further detail on the TLTRO III plans, let alone the loose talk of 'tiering deposit rates' to mitigate the impact of NIRP and QE on banks. The ECB would leave itself hostage to even more criticism were it to hint at further forecast downgrades, even though that is where its own stated 'balance of risks' lie, even if there has been some data which has surprised on the upside in recent weeks. Indeed it is worth noting the point from the March minutes that leans against any further easing: "Concerns were voiced that over time the effects of persistently low rates could depress banks' interest margins and profitability with negative effects on bank intermediation and financial stability in the longer run. It was recalled that the consequences of low rates differed across the maturity spectrum and across banks, depending on their business models and the structure of their assets and liabilities." Obviously many speakers and other reports have raised this many times before, but it was the first time it has been cited in the 'accounts; of a policy meeting. Overall this does emphasize that the ECB now finds itself with a very similar dilemma to the Bank of Japan, effectively admitting that 'whatever it takes' has not delivered the results that it intended, and whose side effects are creating problems, and unable to move away from its accommodation, but facing a downturn in activity, which ostensibly demands it takes 'action'.
** U.S.A. - March CPI **
- For headline CPI energy prices are once more on the rise, with an expected 0.3% m/m set to push the y/y rate back up to 1.8% y/y from 1.5%, gradually putting paid to the Fed and market chatter about a more protracted period of below target inflation, which is in any case not true of core CPI, where a 0.2% m/m rise is forecast to sustain the y/y rate at 2.1%, with housing and medical costs the key pressure points, though airfares could be something of a wildcard.
** U.S.A. - March FOMC minutes **
- The March FOMC minutes are unlikely to offer any major fresh insights into its assessment of the economy or the 'patient' policy outlook, though it might highlight where there would be majorities to either hike or cut rates given a putative set of risks crystallizing, and the relative importance of domestic vs international factors, the latter being significant from the aspect that for most of the Fed's existence, international risks have tended to be acknowledged, but have rarely been a key rationale for a specific policy action. Be that as it may, it will be scrutinized for details on its plans for bringing its balance sheet reduction programme, given that such issues as the average maturity of its portfolio, the target for bank reserves held at the Fed, and whether the balance of Treasuries relative to MBS in its portfolio has as yet not been clarified. The latter are important given that the related decisions will have some implications and impact on the shape of the US curve, and indeed credit spreads.
Ostwald, Marc
09:01 (11 minutes ago)
to Marc
- Peak day for event risk with busy schedule of data - Japan Orders,
Norway CPI, French Production to digest; UK GDP and activity data,
trade and US CPI ahead; Brexit summit, ECB meeting, FOMC minutes and
OPEC monthly oil market report: Germany, Finland and US bond auctions
- UK GDP / Production: mean reversion expected after January rebound,
underlying profile suggesting at best weak growth
- Brexit summit: longer extension mostly likely with many conditions
- Germany: low Rhine water levels a very real threat to the economy
- Norway: CPI offers solid rationale for modestly more hawkish Norges
Bank stance, though GDP setback implies some caution likely
- US CPI: energy to pace expected rebound in headline, core seen just
above target, airfares a potential wild card
- US FOMC minutes: focus on discussions on economy, and Fed balance sheet
- Morning Call audio preview:
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-10-april-2019/
..........................................................................
********************
** EVENTS PREVIEW **
********************
Today's calendar could not be more heavily geared in terms of event risk with the EU Brexit summit, ECB meeting and FOMC minutes accompanying a very busy day for major data: ranging from the overnight Japan Machinery Orders and Norway CPI and onwards to UK monthly GDP and accompanying dump of activity data to US CPI. OPEC also publishes is monthly oil market report, just as Russia and Saudi Arabia hint at an end to, or at least an easing of the production cuts agreement, while the govt bond auction calendar has German 5 yr, Finnish 7 & 28-yr and US 10-yr slated. The becalmed price action in many asset classes and FX rates could thus be in for something of a 'wake up' call. In terms of the overnight run of economic data, the smaller than expected rebound in Japanese Machinery Orders (1.8% m/m vs. expected 2.8%) was paced by a recovery in Export Orders, however the 19.0% m/m jump follows an 18.1% m/m slide in January, thus suggesting the underlying trend is at best flat in Q1. Norwegian CPI is reviewed below, while France offered a further signal that the manufacturing sector is recovering with 1.1% m/m rise in Manufacturing Output against a forecast fall of -0.4% m/m, and January's revised 0.7% m/m. One other item that needs to be watched very carefully is news that water levels are running dangerously low on the Rhine, and may prove to be too low to support major shipping traffic again this year, significant rainfall is required in the next few weeks to avoid this. See https://www.bloomberg.com/news/arti...uld-run-too-low-again-for-shipping-in-germany, and as a reminder 38% of all goods traffic in Germany goes via the Rhine - for a graphic see:
https://www.inland-navigation-marke...8/q2/2-freight-traffic-on-inland-waterways-2/ ; gasoil demand would be the first market to be hit, if this risk does crystallize. Given the dreadful state of many parts of the autobahn network, with long sections condemned as unfit for traffic and being repaired gradually, traffic would probably have to be diverted to the railways.
** U.K. - February GDP, Index of Services, Production & Trade **
- Today's rather moot (given Brexit risks) run of data is projected to show monthly GDP stalling (flat m/m) after unexpectedly jumping 0.5% m/m in January, leaving the 3mth/3mth measure unchanged at 0.2% q/q, and as ever much will depend on the Index of Services which will likely slow from 0.3% in January. Industrial Production and Manufacturing Output will also likely slow to 0.1% m/m and 0.2% m/m respectively after unexpected strength in January, though base effects from last year's 'beast from the East' implies y/y rates improving modestly, but remaining negative at -0.8% and -0.6%. The ever volatile Construction Output will also likely stall m/m after a surprising 2.8% m/m in January.
** U.K./EU - Brexit summit **
- Prior to the summit, there will be further negotiations between the two main political parties on trying to find a compromise that would enable passage of May's "Withdrawal Agreement", though indications suggest that labour demands for a Customs Union and indeed a second referendum as a quid pro quo are proving to be a very high hurdle, which is unsurprising given the overall evolution of the Brexit political process since the June 23 referendum. Mrs May will then hold PM question time before heading off to Brussels for the summit. The EU ambassadors meeting fashioned a draft resolution which clearly favours a longer extension than the June 30 date requested by the UK government with EU officials stating that they sort little chance of the issues being resolved by that date. The counter proposal is for an extension to either 31 December or 31 March 2020, with key provisos being that a) the UK holds EU parliament elections on 23 May; b) that the UK commits to not disrupting EU business, for example preparation of the next budget, and that the UK's influence "would be sharply reduced and its voice muted"; c) that the UK does not make any requests to change the "Withdrawal Agreement" (WA); d) an option to leave earlier if the WA and political declaration are ratified before whatever extension date is agreed upon.
** Norway - March CPI **
- Yesterday's sizeable miss on monthly GDP (Mainland -0.3%, Overall -0.4% m/m), which went against the grain of much other recent data and surveys, and by extension also against the modestly more hawkish from Norges Bank at its recent policy meeting, effectively put a good deal more weight on today's CPI, even if the GDP data are often 'noisy'. In the event, CPI once again beat expectations at 0.2% m/m 2.9% y.y vs. a forecast of Flat/2.8% and February's 3.0% y/y, while underlying (core) CPI came in at 0.3% m/m 2.7% y/y vs. a forecast of 0.1%/2.5%, and February's 2.6% y/y.
** Eurozone - ECB meeting **
- Today's meeting will probably deliver little in the way of further detail on the TLTRO III plans, let alone the loose talk of 'tiering deposit rates' to mitigate the impact of NIRP and QE on banks. The ECB would leave itself hostage to even more criticism were it to hint at further forecast downgrades, even though that is where its own stated 'balance of risks' lie, even if there has been some data which has surprised on the upside in recent weeks. Indeed it is worth noting the point from the March minutes that leans against any further easing: "Concerns were voiced that over time the effects of persistently low rates could depress banks' interest margins and profitability with negative effects on bank intermediation and financial stability in the longer run. It was recalled that the consequences of low rates differed across the maturity spectrum and across banks, depending on their business models and the structure of their assets and liabilities." Obviously many speakers and other reports have raised this many times before, but it was the first time it has been cited in the 'accounts; of a policy meeting. Overall this does emphasize that the ECB now finds itself with a very similar dilemma to the Bank of Japan, effectively admitting that 'whatever it takes' has not delivered the results that it intended, and whose side effects are creating problems, and unable to move away from its accommodation, but facing a downturn in activity, which ostensibly demands it takes 'action'.
** U.S.A. - March CPI **
- For headline CPI energy prices are once more on the rise, with an expected 0.3% m/m set to push the y/y rate back up to 1.8% y/y from 1.5%, gradually putting paid to the Fed and market chatter about a more protracted period of below target inflation, which is in any case not true of core CPI, where a 0.2% m/m rise is forecast to sustain the y/y rate at 2.1%, with housing and medical costs the key pressure points, though airfares could be something of a wildcard.
** U.S.A. - March FOMC minutes **
- The March FOMC minutes are unlikely to offer any major fresh insights into its assessment of the economy or the 'patient' policy outlook, though it might highlight where there would be majorities to either hike or cut rates given a putative set of risks crystallizing, and the relative importance of domestic vs international factors, the latter being significant from the aspect that for most of the Fed's existence, international risks have tended to be acknowledged, but have rarely been a key rationale for a specific policy action. Be that as it may, it will be scrutinized for details on its plans for bringing its balance sheet reduction programme, given that such issues as the average maturity of its portfolio, the target for bank reserves held at the Fed, and whether the balance of Treasuries relative to MBS in its portfolio has as yet not been clarified. The latter are important given that the related decisions will have some implications and impact on the shape of the US curve, and indeed credit spreads.
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spooky
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bar / candle charts
change the size of the chart and you get a different mindset...not good
change the size of the chart and you get a different mindset...not good
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updated
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yes
