MACRO MORNING NOTE APRIL 17, 2017
SPX Down, DXY Down, WTI Down
SBA’s Alastair Williamson concludes the Macro Morning Note from Baltimore, Maryland.
Global stocks are mixed in the overnight session following a holiday weekend for the United States. Starting with Friday’s disappointing CPI and retail retail sales data in the US with the continuation of the ATL GDPNOW 1Q17 Forecast crashes to .5%. Geopolitical turmoil continues to escalate over the weekend in Syria and North Korea. The US reflation trade continues to decline with the dollar tagging the low 100 handle and UST10Y benchmark probing the 2.217 area. Ever since March’s rate hike and Trump’s failed healthcare bill, the US reflation trade has been on a negative trajectory.
CSFB Fear Barometer surges above Brexit level
As the spread nears or passes through the 0% threshold, recession is imminent.
Credit Collapse in the United States
Consumer Spending datasets trajectory not healthy
WF Residential Mortgage APPs negative trajectory is an ominous sign
WF Residential Mortgage Originations negative trajectory is an ominous sign
Retail Sales M/M 2 month drop is the worst in a few years
“Reflation” Is Officially Dead: Core CPI Tumbles For The First Time In Over Seven Years (zerohedge)
ATL GDPNOW Forecasts 1Q17 continue to decline now at .5%
Overnight there was no euphoria in US reflation trades via Asia or Europe. This usually serves as a warning sign for the US cash session.
US reflation trade has never traded the same post March rate hike and the failed healthcare bill. Overall US reflation trade has stalled.
60 min timeframe US reflation. Notice the negative trajectory? WTI has positively diverged on geopolitical turmoil in Syria and North Korea, but has recently started to ratchet down.
60 min timeframe Japan. Ratcheting down in the Nikkei225 and USD/JPY over the course of four sessions.
60 min timeframe Europe. Regional equity indexes have been under pressure with a strengthening EUR/USD in the 1.06 handle. ES10Y surges to 1.690 in the early morning. UKOIL declining in the high 55 handle. The biggest driver in EU markets this week will be the first round of French elections.
US Event Calendar
- 8:30am: Empire Manufacturing, est. 15, prior 16.4
- 10am: NAHB Housing Market Index, est. 70, prior 71
- 4pm: Total Net TIC Flows, prior $110.4b
- 4pm: Net Long-term TIC Flows, prior $6.3b
SPX500 monthly/weekly R2 2398 rejection with downside projection R1 2287
UST10Y monthly/weekly R1 2.63 rejection with pivot 2.13 reversion
WTI monthly/weekly R1 55 rejection with pivot 44.81 reversion
DXY monthly/weekly R1 103.73 rejection with pivot 99.26 support bracketed waiting for next major imbalance.
Bonus SPX500 EPS