 Welcome to Tick Mail Weekly Market Outlook for a week commencing 22nd of February with me, Patrick Mulnery. The US bond market has been the epicenter of global financial markets in recent weeks, and bond investors will eagerly be awaiting semi-annual monetary policy testimony from Fed Chair Power on Tuesday. His challenge will be to express confidence in the recovery, but not too much confidence such that the bond market slide turns into a collapse. Typically, the Fed finds the right words on these occasions, most certainly downplaying the forthcoming rise in inflation into the second quarter, such that the bond market decline can probably stay orderly. US data in the week ahead should be a modest upward revision for the fourth quarter 2020 GDP figure, and then on Friday January personal income numbers. This is expected to jump on the back of stimulus checks, but should be priced in by now. We'll also see the Fed's preferred measure of inflation, the core PC deflator, which expected to be contained near 1.4 to 1.5% year-over-year in January. The coming weeks have also seen progress on the $1.9 trillion fiscal stimulus bill, where a vote could go to the House law on Friday. This suggests a tough week for bonds and potentially some further support for the dollar. Yet the dollar has struggled to make much headway on the recent 20 basis point rise in US real rates, and as long as Powell can convince the market that loose policy is here to stay, the reflation story should continue to limit any advance for the dollar. From a technical perspective, the Dollar Index has discussed in last week's session, and we've been looking for a breakdown through the sending trend line support, anticipated a bit of back-and-filling, which we have done, and whilst we hold below the sending trend line at $91.30, I'm looking for a break of monthly range support at the $89.90 level to get a retest of the price cycle lows at $89.20, en route to an ideal test of the $87.50 area. At this stage, only really a close back above $91.50 would suggest that we have further work to do on the upside in terms of a corrective move in the Dollar Index. The Euro had survived some strong dollar strength and could enjoy some strength on Monday, where the German E-phone number is expected to surprise to the upside. Friday's German composite PMI for February was slightly stronger than expected, and led once again by the manufacturing sector. This positive sentiment being echoed in E-phone expectations could suggest Germany was weathering the lockdown slightly less than expected. We'll also hear from Christine Lagarde on Monday. This year's consolidation in the Euro seems to have calmed the ECB down a little. The Euro did not feature, probably, in the January ECB minutes. From a technical perspective, as the Eurodollar holds above the trend line support, which now comes in just below $1.20, I'm looking for a grind higher to ultimately get a test, a retest of the prior cycle highs at 1.345, and to extend through there to ultimately get a test of the 1.2550 area. Sterling was yet another strong week for the currency, benefiting from this still not overly long sterling speculative positioning, and the ongoing good news on the vaccination front that points to a strong economic rebound for the second quarter. Should Chair Powell deliver a cautious message on Tuesday that A, won't increase expectations of QE tapering, and B, underscores the outlook for the deeply negative front-end US rates, the upside pressure on sterling then should remain in place. While sterling is now trading at modestly overvalued territory based on short-term financial modeling, this should now be considered as a new normal, as the switch from Brexit-related uncertainty to the vaccine rollout related upside to the UK growth outlook argues for more frequent periods of sterling valuation overshoots. Domestically, the focus will be on PM Johnson, who is set to unveil the roadmap for reopening the economy on Monday. While the underlying message is likely to be cautious with no formal dates set, the fact that the UK is moving towards such a roadmap underscores the constructive outlook for sterling for the coming months, particularly versus other European currencies. The UK jobs report on Tuesday should also suggest further stabilisation in the unemployment rates. So sterling got the test of the 140 levels or a little bit of supply into the closing of the session on Friday. What I'll be looking for now is some potential back-and-filling here. Ideally, I'd like to see a retest of the 13750 area to re-engage on the long side, looking for a move to test up into the 141. 30 is the next upside objective. At this juncture, really, we would need to see a close back below 135.70 to suggest a more deeper, corrective phase for sterling. Dolly Yen seen some heavy rotation trade recently. Large rises in US yields have been supported, but the relationship has been fickle. Also tend to think that a decline in the US money market rates into summer, for example, the three month US dollar live war could fall, let's say, 10 basis points on the back of US Treasury running down its general account. This could encourage Japanese investors to increase dollar hedge ratios, which would be a negative for the dollar. Friday sees a virtual meeting of G20 finance ministers and central bank governors. Normally, FX markets wouldn't get too excited about the FX language in the release communique. However, at this time, the global public health emergency will dominate, and the focus will be probably on ongoing stimulus in the vaccine rollout. Yet Treasury Secretary Yellen could again be asked her view on US Treasury FX policy. Expect a reiteration of market-led exchange rates, although suspect that Washington wants a weaker dollar this year to avoid all the US stimulus checks being spent on imports. From technical perspective, the Donnie Yellen trade up into the resistance zone, just above 106. And we've seen a pullback. I'm looking for a test now, and the ascending trend lines are coming in around 105. I'd like to see bullish reversal patterns there to ultimately set longs, looking for a test of 106.76, which is monthly rate of resistance. And maybe have been to the 107 area for another corrective leg. We'd like to play out. In the meeting term, really, it would take a close below this trend line support, 104.50 area, to suggest that the corruption is complete, and we're heading lower in terms of the Donnie Yellen. Finally, the Aussie dollar was the best performing currency last week, amid a generalized risk on environment and other rally in iron ore prices. It was likely the key driver for Aussie outperformance to its pro-cyclical peers. The currency has reached 10-year highs, and iron ore is around the $170 per metric tonne levels that have seen a surge in demand from China after the New Year holiday period. Commodity watchers continue to see a material risk of a downside correction from the current iron ore price, which appears unsustainable in a meeting term perspective. Declining iron ore prices may not be a story already for next week, but it represents a major downside risk for the Aussie. So with the iron ore price rise, we saw the Aussie take out the pro-cycle highs here. Now what I'll be looking for is any back and filling to hold the 78th handle. As it does, I'll be looking for a test of the 80th level as the next upside objective. This juncture really would need to close back through 76th to suggest a deeper corrective phase for the Aussie dollar. That concludes the weekly market outlook for a week commencing the 22nd of February. Hope you all have a great week, and I hope this helps. Thanks very much.