 Very good morning to you. Hope you're doing well Friday 19th of March and before I begin the briefing Just a reminder for the latest market watch podcast with myself and head of trading peers current I'm going to record that in a few hours time. We'll publish it later today So we've got to do is either go to amplify live comm slash podcast and Or you can just go to the individual podcast platforms on Spotify on Apple Just search for market watch and you'll be able to find it So in formal chat that peers and I have at the end of every week and this week probably going to talk about the Fed a Little bit and we'll talk about this whole kind of vaccine situation on going between the UK and Europe So if you want to get our latest insights on that the podcast is a best place to go and don't forget to subscribe And leave a review that would be amazing otherwise, let's get straight into the briefing and talk about what's going on today and Really yesterday was an interesting one We did say on Wednesday after the initial reaction to the FMC We obviously saw a kind of dovish response in the sense that equities move higher dollar weakened Considerably which helps support the major pairs But if you look at where the major pairs are trading now top left corner Euridollar is completely kind of scratched from where we are or where we were prior to the Fed Announcement coming out. So basically flat xing out that that pop that we saw same kind of case with cable to that extent equities obviously reversed course After moving up to record-high territory the key here I think to understand these moves is as we were kind of alluding to was The reaction effect that we had on Wednesday Our view was down to kind of misplaced market expectations about looking for something more hawkish Particularly around that dot-plot moving forward to a rate hike sooner rather than later, which didn't materialize of course It's worse than other things, but that was the main kind of take home. The ultimate point here though is that in those Summary of economic projections growth in America is going as per their projections to move up to around the mid 6% region by the end of the year is what they're looking at as their base case scenario and so growth is going to Substantially improve in the US as we go through the reopening with the stimulus in the system more infrastructure spending to come Covid cases thankfully improving in the states vaccinations picking up rapidly and the reopening of the economy and so with that then You know yields will rise as the economy grows and so I think yesterday was a really good Reflection of that and in the US 10 year we broke below what was a key kind of trading band I guess that we were trading for a quite a period of time which was If I just mark it up here was this this area going back to the beginning of March Which was 131 23 to around the 132 low kind of figure And we broke out through that really more forcefully in the session Two days ago we bounced back through there though on the release of the Fed But then yesterday we broke the lower bound of that and we actually saw the US 10 year yield move above 1.75% for a fleeting period of time, which was a 14 month high before kind of retreating back to around 1.72 percent What does this mean then generally speaking well Equities not liking it and obviously the high yield environment tends to hit growth stocks the hardest And so tech underperforming the NASDAQ was down in excess of 3% Comparative to the Dow down just a half percent So the regular kind of reflection of that high yield environment in the equity sector kind of space In the equity market, I know it feels Feels quite heavy, but you know, I think context is quite key. We we are at record high territories We've come off and we've responded here in the S&P around 3900 which is a key kind of strategic point of support in the near-term price action for the month of March You can see here going back to The beginning of the 1st of March the initial tests and breakthrough that come back to bounce off that as a support error at the 12th and then again in the recent last 24 hours as well So key area to watch there and going forward the other market that obviously moves substantially yesterday was oil I saw quite aggressive breakdown in price in fact at one point for the session We were down almost 10% which obviously is a correction in those percentage terms The rationale behind that there was some kind of tenuous links drawn between the fact that mainland Europe continues to confront a fairly challenging COVID situation case rates going up in Italy and France the latter being the latest to impose more stringent lockdowns in the capital city and other regions like what we've seen in Italy and Subsequently that is going to have a degree of demand impact But overall I think he had a bit of a technical breakdown in price that Drawn in some of the kind of more momentum based Speculators just driving that fast money move and the market just trading quite heavy from that point not as well forgetting that yesterday was a research at dollar a day Reversing the entirety of the move that we had on the weakness and the knee-jerk reaction on the back of the Fed on Wednesday So overall there was a couple of factors there. I think that explained that move in particular if you look at the daily chart I always think you know perspective on a higher time frame is quite key and you know We look how far we've rallied since November. I mean, this is an incredible move So let's quickly look at this on percentage terms going from the low that we printed on 2nd November You know, we have rallied 102% I might add in terms of the price to the high that we've seen just a short while ago So to come off and now trade down 11% after a hundred plus percent rally I don't think is is too much cause for concern at this point I have marked up here on the daily chart a couple of key areas that I would be keeping an eye on We've threatened but failed to close below the low area of the 3rd of March I think that technically was quite important for price here So quite a key support area to account for now for price at 5924 Even if we did break that then I'd look back down to the high We have in the fifth and then that kind of double bottom on the ninth and 12th of Feb as the next support area down to 5732 And even then don't forget we're talking about a correction move down of what 15% off that 100 plus percent move that we've seen over the course of the last three months or so. So again, I still Although it was heavy yesterday. I kind of agree. I heard a comment from Goldman Sachs From earlier this morning. They said that they expect OPEC plus output to increase by 2.8 million brows per day in August And see Brent rising to 80 bucks in the summer While it views yesterday's selloff as a transient pullback in a larger oil price rally and a buying opportunity And You know, I'm not putting all my all my eggs in the Goldman basket But I do believe in a similar kind of view in the sense that lower prices will get bought into I think it's how the market will see this strategically all right, well Lower clothes then on Wall Street a little bit of a bounce off the lows here inequities As some of these fines some strategic kind of support lower levels So as I said in the S&P quite a key level there's another level of here as well in the Nasdaq that looks equally Like a good area that the market has responded to from some of the price activity of previous resistance and support And we're just popping out above the Asia pack range here actually as we're delivering this So moving back up around 50 points now in the the nasdaq future ahead of the open But overnight in Asia it was a little bit of a case of just picking up the negative handover from What we saw in the close on the us also a couple of things to be aware of that were happening in the Asia pack session And namely Chinese equities a little bit softer We've had our first kind of first high level talks between us and China since the Biden administration have come in and It descended into bickering is what Bloomberg is suggesting And each side criticizing each other over human rights trade and international alliances So we weren't looking for much of the way of any kind of tangible outcome Of substance from these talks. It's the first meeting. So it's very much just kind of feeling each other out some people were looking at the fact that A slightly more friendly atmosphere might be received as a site positive for markets even without any definitive kind of results on these talks, but seemingly so far both are trying to Just hold their stance at these first kind of meetings and that has Being received a little bit negative in the overnight session, but so far it's not really impeding The kind of slight recovery we're seeing here at the european open So I don't think you could have expected too much more than what's happened perhaps somewhere in with A little bit of a higher expectation of hopes that the slightly friendlier mood and that hasn't materialized as yet But obviously they're going to have more talks coming up in the coming weeks The other thing then from the overnight session with the boj They had their kind of review after a lengthy policy Look at the tools that they're they're currently using And what they came out with was they set out a wider than previously thought movement range Rebond yields and they scrapped a buying target for stock funds at the end of their three month policy review So basically they scrapped the six trillion yen etf buying target And they've kept the higher bound threshold of 12 trillion One of the other key things here that did weigh on the nick a 225 last night Was the fact that the bank's decision to only focus on the topics. So that's like the broader tokyo based indexed rather than the kind of more Kind of familiar nick a and so broadening out that purchasing just the topics Moves away the purchasing of the nick a and that consequently had a bit of a negative impact there as well Um, so all in all as we were kind of suggesting at the very beginning of the week when we're looking at the whole Kind of events to be aware of for the week ahead And the boj definitely a bit of a domestic impact there the yen Not really too much of a great deal of movement again still with the the green bank kind of dictating proceedings for much of the g10 kind of currencies at the moment So I wouldn't really look at the boj as something that's going to really impact the uk european us assets that we're trading this morning Um talking of vaccines just a brief update There's been a lot of drama of course about rising political tension between europe and the uk in regard to vaccines particularly on the the astra drug but Following the ema Kind of announcement yesterday germany france spain italy have all going to reverse course and they've said that Now that that ema investigation is concluded and the vaccine was not associated with the potential risk of blood clots Adding that the benefits in the shot out weigh any possible risks They're all going to recommence that the usage of that vaccine Meanwhile elsewhere in france, I did briefly mention That macron's government has put paris in several other regions under stricter lockdown conditions for a third time hospitals running out of intensive care beds for covet 19 patients at the moment And suddenly worryingly that their covet case rates continue to climb at the moment In fact, I don't think that this this latest move is particularly surprising And I don't think you should really think of it as a real net negative for something like euro for example And the reason for that is is that it's not really a surprise if you've been tracking the daily infection rates of new covet cases in france, they have risen to 30 000 nationally in recent days And that is up more than 20 percent in a week So on the point of the the actuality of covet case, it's worsening It's almost inevitable that the government's got to take some kind of action to Try and control in the particular hotspots And then also it's been fairly well telegraphed in the press that this was going to happen So all in all, what does that mean for france specifically? Well, the new restrictions according to analysts are expected or according to the finance Ministry in fact in france are expected to knock off around 0.2 percentage points from french gdp This annual economic output the monthly cost of compensating furloughed workers and closed businesses is also going to rise Up to around 7.2 billion Which is just over a billion more than what they previously were expecting in the government forecast And so that's the latest there And then the final thing I wanted to mention was The calendar today it is pretty quiet. There's not really anything major coming out You've got retail sales, but everything else is kind of a bit of a side point quite frankly And so with a quiet calendar the other thing to be mindful of is this Which is quadruple witching so specifically relevant for equity traders What is quadruple witching or just to refresh you And your memory if you are relatively new to markets Then it refers to the dates of which derivatives of stock index futures Stock index options stock options single stock futures all expire Simultaneously And so the main point here is that while it may result in increased volume and arbitrage opportunities Quadruple witching doesn't not necessarily translate into increased volatility for markets But you can witness heavy trading volumes. So essentially just going back to the timings here They are slightly different. There tends to be like a Uniform pattern the footsie followed by the euro stocks the DAX us Indicates at the market open And then they can't run later on in the afternoon So it's just about around the times of explorations to be aware of those if you are training those particular products But that is it. So from a technical point of view, I'll let the guys come on I'll now provide live stream Shortly and they can run through the charts as they see it Don't forget to check out the the podcast as well a brand new episode coming out in just an hour or so this time All right guys, have a good session ahead and have a fantastic weekend. Take care