 Welcome to Tick-Mill's weekly market outlook for week commencing the 12th of July with me, Patrick Manlow. In the US, it's probably too soon for Chair Powell to start directly commenting on tapering when he testifies before the House Financial Services Committee on Wednesday, and then again before the Senate Banking Committee on Thursday. The sensible purpose is to deliver the semi-annual monetary policy report Congress that has already actually been released. In the wake of the 850,000 new jobs having been created and with the benefit of another round of CPI inflation figures that get released on Tuesday, it's not impossible we hear a slightly refreshed version of what the Fed communicated in the recent round of meeting minutes. They indicated that a substantial majority of FOMC members expect upside risks to their inflation projections. There are already sustainably no modestly above the 2% target throughout 2021 to 2023. Powell is likely to maintain guidance that there is much further room ahead before achieving substantial further progress towards tapering and to condition its upon near-term data. A wild card beyond the taper of bonds is whether Powell is grilled on preparedness ahead of what could be a divisive debt-sealing developments. If he is, then at this point Powell is likely to distance himself from the Congress and adopt observer status for now, while standing ready to act under any potential scenarios. US CPI will inch along the path of informing inflation expectations through hard data when it's released on Tuesday. A headline year-over-year race is expected to top out at 4.9%, 5% prior, but with another noticeable month ago gain of about half a percent. Key, however, is core inflation, and that is expected to continue climbing towards 4% year-over-year with another 0.4% month-over-month rise. June is typically a soft month for seasonal price changes in a normal year, and so we're left with base effects, gas prices and figuring out supply chain and reopening effects to inform the estimates. The main additional US release will be Friday's retail sales figure for June. It's not looking good for this report, but a major wildcard concerns the reopening effects on the two-thirds of the spending tally that is difficult to observe in advance. From a technical perspective, the dollar index has pulled back from the target zone at about 92.80. I'm now looking for a test back into 91.70 to 91.50, the monthly pivot. Watch for bullish reversal patterns there to re-engage on the long side, ultimately looking for a move to test the major quality objective at 93.73. Like I said last week, really at this stage only a loss of 90.50 would concern the bullish thesis. In the Eurozone, the week ahead sees CPI updates from the major European economies, culminating in Eurozone CPI on Friday. The ECB has recently announced the results from its strategy review, and there were two key aspects that so far had somewhat conflicting impact on the effects markets. There was the update of wording on the ECB inflation target that implied that the governing council would tolerate temporary inflation deviations as it tries to deliver 2% inflation over the long term. The dovish pivot could be seen as Euro negative over the long term. That being said, the other important change was the incorporation of housing costs into Eurozone inflation gauges. If the US and the UK experience is anything to go by, this could have a positive impact on past and future inflation, and thus can be seen as offsetting some of the Euro negatives associated with the changes to the inflation target. From a technical perspective, the Euro held the 118. We've got a bullish reversal pattern, and now I'm looking for a test of 1940 to 1950. Watch for bearish reversal patterns here. If sellers do step in, then we look for a test of the equality objective down to 1625. Really, at this stage, as previously suggested, it will take a close above 122.30 to negate the downside target for now. Bank of Japan meeting on Thursday into Friday will be monitored primarily for what the BOJ does on potential climate change policies. Reuters has reported that sources indicate the BOJ will offer 0% long term loans to lenders that support measures against climate change. How it defines and monitors such activity is uncertain whether unelected central bankers from the ECB to the BOJ should be picking winners and losers and accordingly distorting markets is another matter very much open for debate. But from the meeting itself, no major fireworks are anticipated as the central bank is expected to refrain from policy adjustments with rates to be kept at 0.1%, QQE with yield curve control likely to be maintained against the 10 year JDB yields at 0%, while the central bank will also release its latest Outlook report which contains board members, meeting forecast for real GDP and core CPI. BOJ's officials continuously stuck to the script with Governor Karoda reiterating the view that they won't hesitate to take additional easing steps with an eye on the pandemic, but also suggested lack of urgency with Japan's economy in a severe state but is picking up as trend and is likely to recover as the pandemic impacts subsides. From a technical perspective, we took out the trend line support at the 11040 and now looking to see how price responds at a retest of the underside of this trend line resistance, trend line support potentially act as resistance, so let's step back in at 11070 and I would be looking for a move down to test 10850 as the downside objective. At this stage, we would need a solid close back above 111 to suggest this was a false break and refocus targets above 112. In the UK, the UK also updates CPI for June on Wednesday, core inflation is expected to be little changed, and the prior month's pace of 2% year over year, but reopening effects if the UK stays on track could continue to exert upward trend pressure on prices over the summertime reports. Thursday will bring forth several updates on the state of the UK job market, job growth and the unemployment rates plus wages during May will be updated along with the jobless claims data for June. The UK has been slow poking terms of her relative job market recoveries by comparison to other Anglo American economies. Then again, the UK is only just under 600k lower than where employment stood in February 2020, which scales population remains a milder overall hit than Canada experience, for example. A further gain is expected in light of ongoing relaxation of the restrictions, but the forward looking emphasis is likely to remain upon whether the UK remains on track to end all social distancing, requirements by July 19th as planned, given the ongoing rise of the Delta variant. From a technical perspective, Stirling held the 137-18, now look for a retest of 139-60, the monthly pivot. Watch for bearish reversal patterns here to engage, re-engage on the short side looking ultimately for a test of 137. This stage of close above 148 will be required to refocus bullish targets above 143. Finally, in Australia, job status for June is due out next Thursday in which expectations for the headline employment change to show an increase of 30,000 versus 115,000. The employment rate to decline to 5% versus the previous 5.1%. Prime Minister's job data for May was a blockbuster reading that was over five times greater than the forecast of 30k, which had mostly been due to 97.5,000 increase in full-time jobs and helped bring down the unemployment rate to pandemic loans, as well as supporting the narrative of the stronger than anticipated rebound in the economy. Despite the stellar jobs data, it is not seen to have significant applications for central bank policy, as the RBA have continuously reaffirmed guidance that suggests a rate hike is unlikely until 2024 at the earliest. And although RBA Governor Low acknowledged the rebound of the labor market had been remarkable, he added that positive surprise in jobs is not matched by equivalent surprises in wages and prices, whilst he also commented that wage growth will likely need to exceed 3% for inflation to reach the target range and the unemployment will need to be sustained at a low 4% level to be considered as full employment. From a technical perspective, the Australian Dollar tested the equality objective versus this swing structure at 74.20, a nice bullish upside reversal down Friday. I think we can see some follow-through here, certainly to get a test at the monthly pivot up to 75.80 and maybe even the descending trend line resistance at 76.50. However, watch for bearish reversal patterns in these areas to re-engage on the short side, ultimately looking for a move down to test the 73.50 level. And that concludes the weekly market outlook for week commencing the 12th of July. As always, trade is planned to trade, trade the plan, but most importantly, manage your risk. Until next time, thanks very much.