 Okay, very good morning. It's Monday the 11th of October. Hope you had a great weekend and before I begin the normal outlook for the week ahead Don't forget if you are undergrad a master's student or a recent graduate Don't forget to check out amplify me.com to access some of our latest free simulation sessions and also some content that's not publicly available in our exclusive student portal So yeah, check out amplify me.com if that's appropriate for you otherwise just going to get straight into the briefing and talk about the things that are happening this morning and A quick summary of what I'm going to talk about first of all It's Columbus Day in the US and that does mean that Actually for equity markets things as per normal the nizy is open normal hours But there is no bomb market trade today. So just a point of note But in terms of the actual charts this morning, we've got equity index futures in the center charts just a touch lower So the DAX down 40. Yes, the NASDAQ down 63 in the S&P down 14 in the futures market in the currency space Seeing a decent lifting cable this morning. You can see here and we're going to talk about that in a little bit more detail Up about 50 pips this morning after some hawkish Bank of England rhetoric coming out of two MPC officials. Otherwise, you'll still remain on the ascent So the US 10 year is down around eight and a half ticks this morning. Just continuing that general move higher that we've had so putting more Continuous pressure on bomb prices and then elsewhere in the gold market pretty quiet But oil still remain remains in the commodity space Very buoyant. We've had a test in the APAC session and early this morning's Europe's come in at the 81 dollar handle Which on the weekly chart has put us back above what was quite a critical error 80 And that does open the door technically not just for today's session But for this week for a more deep and run on the upside up to around really the next resistance Not really seen to about 84, which would be around these highs We had in October 2014 and that low back in November 2012. So still things looking very bullish in the oil market So let's get into some of the headlines and talk about the things that are going on I'm going to start off in a chronological order. So let's talk about the Asia region where Japanese shares were boosted by a wiki yen Dolly N trading up about 50 pips this morning and so sort of benefit of the local stock index which tends to Prefer a weaker currency state given the high degree of export names that operate within that index Prime Minister as you can see here Koshida has also commented that he is not considering a capital gains tax change at present Those comments are made over the weekend assisting some of the rationale behind that move Otherwise in Hong Kong a gauge of tech equities jumped more than 3% As you can see here easing concerns of Beijing has cracked down on internet platforms after the food delivery giant Mei Chuan received lower than expected antitrust fine And that came despite some continued rhetoric coming out of the PBOC that China will continue to curb monopolistic behaviors of internet platform companies So the fact that that fine was lower than expected has come as a bit of relief So the likes of Alibaba as well rising overnight, but also we saw coal firms Moving higher driven by supply fears and defense equities and rising tensions as well with Taiwan So a couple things going on there in China separately as well. What's going on with Evergrande? Still kind of Ticking over in the background Although a lot of the emphasis from I guess any sensitivity to it in a broader market has dissipated quite a great deal from where We were a few weeks ago But essentially offshore bondholders of Evergrande Group were overnight bracing for news on more than a hundred forty eight million dollars in looming Bond coupon payments after the company missed obviously those two coupon deadlines last month But we await any updates on that nothing seen as yet on that front And then yeah moving on let's talk about the Bank of England I mentioned the pound is accelerating at the moment and then in fact It's just broken out in the futures market above the high that we've seen at the back end of last week So some decent gains being seen and what's drawing attention our comments here from two Bank of England officials reinforcing signals of the perhaps intention of an imminent rate rise in the UK to curb inflation With one telling households to brace for a significantly earlier increase than previously thought So who are these people? Well, here's a refresher of the current monetary policy committee and the left being the most dovish The right being the most hawkish So morning client to be voting for rate increases sooner rather than later on the right-hand side such as Michael Saunders For example who has dissented in terms of the QE decision for the last two meetings and Michael Saunders Suggesting remarks published on Saturday the investors were right to bring forward bets on rate hikes and what that followed then was The governor Andrew Bailey Warned of potentially very damaging period of inflation unless policy makers take action And what this has meant then is that markets are almost now fully pricing in the first move by the end of this year So we've basically gone from rate hikes in a kind of May time to then February to now pricing in much more aggressively to the end of this year And so Yeah, a couple things to be aware of here. What I would say is that from a Technical point of view furlough is quite a big issue and obviously that's just ending and actually in terms of the remaining Bank of England meetings that exist The BOE are not going to be equipped with sufficient data to see how that is really playing out until at least the December meeting So anything earlier than that is probably unreasonable. I'd say in terms of of hiking rates The other thing is is that the cost of living spike over the winter Means perhaps caution might prevail at the Bank of England Don't forget, you know, these massive energy prices spikes that are happening You know is going to create the potential as we've seen from analysts last week commenting of potentially a 30% rising gas electricity bills for consumers and So, you know one of the things that Piers and I talked about the podcast on Friday was this idea that the Bank of England can Really control demand side inflationary pressures where the gas issue and oil energy problem at the moment is definitely a supply side issue and So find it hard to see that the Bank of England can really try to tackle This resurgent inflation at the moment specifically on energy Themselves where really they need to react to really other forces that are more under their control So again, one of the main things I guess twofold to look out for this week Cunliffe who sits here who's the deputy governor and Slightly more of a dovish disposition speaks on Wednesday and then ten reiro who's down here and Catherine man the new member These three are going to be speaking so Wednesday for cunliffe And then I think it's Thursday when man and ten reiro speak and and so definitely keeping an eye on their Commentary to see whether they kind of balance out the more hawkish rhetoric coming out of saunders and Bailey quite frankly, I think it's more Myself the NPC giving a bit of flexibility to The rhetoric at the moment to keep the the market in check that they're serious about monitoring high inflation But I still find it incredibly difficult to see Given those affirmation reasons about the impact that it's like you're gonna have on the consumer with Rising inflation that they're gonna be able to just hike into that I think is is unlikely and that then brings up the second point, which is I think that Sterling which has been rising at the moment I do feel like it is acceptable then to a bit of a pullback in time As some of that realisation starts to bake in and on an upside level probably the area that becomes a little bit more interesting as we get up to Looking on a daily chart here and as we get up to around the one thirty seven Thirty type area. It'll be interesting to see How we sit then given the fact that we've been rallying really over the course of the last 12 13 days all the way down for one thirty four handle So I would expect that move to become perhaps a little bit fatigued up and around that that level as we look out for the rest of the week Again markets generally as I might have mentioned before I do think tend to over Interpret a lot of these comments and I think they Personally, I think the markets overstepped the mark a little bit and how aggressively this has been priced in so Definitely, there's a lot of UK data coming out as well this week from jobs data to GDP And all of this will be important information for us to also define how the bank community are going to make their decisions going forward All right, the other thing we've had is feds daily who is a voter She said this weekend the US labor market and obviously this is quite a timely comment following that big miss on the headline at Least for non far parallels were had on Friday She said the US labor market will see ups and downs as the pandemic lingers But it's premature to judge that recovery is imperil and she does tend to sit slightly on the on the more dovish side So the fact that she's saying such a comment goes to show them That it still remains on track most like the Fed are going to push ahead with that announcement of tapering in November and so Some other things to be aware of on that front You've got Goldman Sachs They've come out and talked about a downgrading of their US gross forecast However, I must say that is somewhat counterbalanced by the fact that they've actually they've basically downgraded 2021-2022 but they've upgraded 2023-2024 So I would say this headline is perhaps a little bit sensationalist What they're basically saying is a delayed recovery and consumer spending is shifting the timeline Then and making things a little bit slower now, but a little bit faster later on in 2023 and beyond as I've said Basically, I said the two main challenges to growth in the medium term were slowing of fiscal support and The need for spending on services to bounce back quickly enough to offset a decline in the purchases of goods And so I don't think this is anything too sinister, but certainly something to be aware of Especially if you're a student interviewing at GS at the moment All right Then the other thing before I get into the calendar I wanted to talk about was earnings because earnings season actually kicks off In earnest this week. We've already had about 21 actually of the S&P 500 companies who have reported already But it really kind of unofficially starts this week because we get the big banks report So as you can see here really it's Wednesday. You got JP Morgan You've got BlackRock and then Thursday pre-market get whilst Fargo City MS And then you've got lights of goldman's on Friday So in fact, there's 19 S&P 500 companies reporting for Dow 30 components According to analysts at facset the S&P 500 is expected to report year-over-year earnings growth of 27.6% for Q3 And as you would expect off those 21 companies I said you have reported around 71% are citing negative impact of supply chain disruptions So I don't think that really comes as too much a surprise to hear that on on the their conference calls post their numbers release Energy shares which are soared due to this really powerful lift. We've had in crude prices Yeah, higher prices could weigh on companies although it's beneficial for energy It could weigh on the lights of everything ranging from transportation to consumer discretionary firms and so on so worth Just keeping that in mind for the the nuances of that will get probably through this earning season across the different sectors that come out as we go further forward so very much a bank focus this week and Typically the market will lean on the first couple of big US tier one banks to really dictate the rest of how they will see The financials reporting over the period and certainly if you're a student This is a really good opportunity as well to jump on the investor relations page of these different banks Depending on which ones you're interviewing for so again, JP Wednesday Bank of America MS City on Thursday GS on Friday. Just go on the investor relations page Find the earnings report and most of these banks do a really nice top-level sheet of how individual Divisions are performing the overall banks updated macro view and things like that all in a short doc That's definitely worth getting yourself up to speed on All right Let's talk a little bit about the calendar for this week as I mentioned the bond market on holiday But the equity market open is per normal today, but otherwise quite quiet on the calendar Really if I'm talking about US highlights, there's three things you got CPI Wednesday You've got the FMC minutes that evening and then you've got the US retail sales report on Friday So from a top level the CPI one is probably going to be one of the main releases Analysts at ING right that are after a reopening spike in key areas We have seen the rate of price increases start to moderate But it was it is still faster than what we saw pre-pandemic with higher food and housing costs Particularly evident this will keep the year-on-year inflation rates Elevated with the risk being that they'll rise further in coming months given supply chain issues And infantry shortages as we go into the key holiday season. So Moderation from where we were but still elevated and hence the reason why Still loved to view then that the this is definitely fit the conditions for the Fed to commence tapering in November Retail sales like to be dragged lower by continued reversal in what we had have recently of A spike in vehicle prices outside of autos though analysts note that figures should remain positive rising incomes as we go through the the more reopening in the US and surging household wealth Providing strong underpinnings for the data going forward as far as the FMC minutes is concerned a little bit dated you might say Not expecting too much from there But obviously you'll be looked at for any clues for details around Setting us up for that taper announcement coming November meeting Otherwise elsewhere jobless claims as per usual on Thursday We are expecting that at around 335 K last week was 326 And then we've got the University of Michigan preliminary sentiment reading as well on Friday my European perspective Few things to look out for For one on Tuesday. We get the German ZDW economic sentiment for October Expected to show investor morale fell for a fifth straight month holding at slowest level since the pandemic fuel drop of March 2020 The Eurozone focus will be on Friday if I jump down here to the bottom Was there's two things really coming out of the Eurozone manufacturing this week as we get trade data on Friday production data on Wednesday and Shortage is continued to buy on the production front and expectations for yet another decline in August generally on that front the latest Chinese trade figures they're going to be coming out on Wednesday so not not actually Visible here on this calendar, but latest trade data coming out of China scheduled for release Wednesday in which exports data for September Is expected to continue its double digit percentage growth with expectations for 21.8 percent reading? So that is it so in summary From the overnight news from this weekend. I would say main things to be aware of our Bank of England So more accelerated UK rate pricing With that then coinciding with strength in the pound and whether or not then That actually comes to fruition and we've got a lot of UK data coming out this week So you've got UK jobs data coming out on Tuesday You've got the US UK GDP August estimate coming out on Wednesday that will help give further insight into that decision making and then you've got The main thing calendar events CPI us on Wednesday FMC minutes that day you retail sales coming out on Friday with the bank earnings coming out throughout the week commencing on Wednesday as well All right, that is it let you guys get on with the week Thanks for listening. I catch you same time tomorrow. Thanks very much