 Okay, very good morning to you. It is Tuesday the 10th of August and quite a bit more quiet than the mini gold flash crash that we were talking about yesterday But nonetheless quite a few things for me to update you on predominantly based around as you can see here some fed comments So Bostock Bark and Rosengren were all speaking in the last 12 hours or so We're just going to talk a little bit about the latest COVID situation in the US They talk about the infrastructure bills some slight progression there and things to be aware of on Capitol Hill And then a storm watch as well according to the National Hurricane Center was a potential disruption Being seen at the weekend for the Gulf of Mexico something to just put on your radar as well for any energy traders But let's just have a look at what is going on at the moment this morning And it's pretty quiet. The dollar index is largely unchanged however Keeping a close eye on it at the moment as it's continued to kind of add to gains that was seen After the firm payrolls report we had on Friday So in terms of the major pairs at the moment you are doing cable They're trading around the lower bound off their Asia pack lows at the moment But as I said roughly unchanged on the session Equity index futures US state side again, it was a pretty Even finish really overall on the US indices in the cash market on the nice yesterday The S&P was basically unchanged that now was down marginally three tenths than that's like up two tenths So at the moment, it seems that equity is just happy and content to just hold a bit of a Consolidation pattern for the time being Obviously the US CPR report tomorrow will be quite key. It's kind of the week's main event In the commodity market after gold had that episode yesterday It obviously fully recovered by the point we got into really the European morning But did fade then through the bulk of yesterday's session remains Still lower post the flash crash, but it's up having just retraced a little bit in the Asia pack session Trading up about $9 at 1735 at the moment And then as far as WTI crude is concerned again similar in the commodity space It'd been coming under some considerable pressure and yesterday in a continuation But as you can see here a bit of a breakout from the Asia pack highs Which was also an air resistance that was seen in the prior overnight session And so just seeing a bit of moderate upside up about a dollar now in WTI crude And on the daily chart you can see we had that trend line break and Horizontal break yesterday around that 66 60 70 mark did create a bit of a spillover in oil at the time But as you can see technically just finding some port at this first rectangle level and bouncing back and training back Above that level for the time being so pretty decent recovery there from from the lows having a quick look then at the news headlines and Gonna talk about the Fed comments and I can wrap in a little discussion about dollar where we're trading in the Dixie and also yields at the moment and so largely Repetition more than anything I would say in regards to what's been said from a number of these characters So feds Bostick who is a voting member on the FMC at the moment? He said the central bank should move to Taperus asset purchases after Another strong month or two of employment gains and proceed with the scaling back process faster than in past episodes You also had Barkin who's a voter said high inflation this year may have satisfied one of the feds benchmarks for raising rates But there is still room for the job market to heal Before rates should rise Again that might sound a little bit more passive than Bostick But he's talking about rates and rates aren't going to rise for a considerable period of time anyway. So again Fairly aligned and feds Rosengren who's a non-voter said the central bank should announce in September that it will start reducing It's a hundred and twenty billion dollars in purchases of Treasury and mortgage backed securities this fall And so fairly in fitting Rosengren there with what other officials have said of late So first things first a quick look on the board here on who these members are So the ones we've been hearing from in these recent comments Bostick is down here I was slightly leaning on the hawkish side as to his Barkin If you take Rosengren perhaps one more notch, but still on the center leaning hawk side So all those three speakers and comments I've just covered are not a great deal of surprise But it does mean that this is a look at the dollar index on a daily chart at the moment And here's the uptick that we saw on the back of the perils report on Friday Continuation yesterday and where we're trading at the moment. We're currently sitting at 93 Currently into the European Open So we're right back up there towards the late July highs which we're seeing at around these levels And then the next obvious target would be up around more 93 40 to 50 Which was the peak that we had going back into the April period Which then if broken above would take us back to levels. We've not seen since really going back to October November time of last year So yeah, definitely the the Dixie has resumed its upward trend after what had been declining through the back end of July With the kind of catalyst being some of that latest data and persistency in the more hawkish sounding commentary We've had of late from a yield perspective as well We have seen they've continued to edge higher and so T notes this morning pretty much unchanged But continuation of the general dissent that we've seen remember we hit that peak when ADP missed That was what that high print was up here But then if you remember Clarita who's obviously the vice chair closely aligned with Powell talking hawkishly with that Really strong services PMI That ISM reading that we had and from that point on we've just continued to move lower at this point in time. So for sure I'd still be quite mindful of Keeping an eye on these continuation trends It'd be interesting to see on the daily Specifically how the dollar reacts up at these levels because these are quite key now from a technical perspective Reinterested to see if these provides a bit of a flaw then subsequently an inverse way for your dollar and cable at these lower bound levels For me these comments as I said aren't particularly new that these Fed members are saying so I feel like we do need a bit of a trigger or in a catalyst whether or not that's something from a Potential upcoming Fed speaker. There are a couple which we'll talk about speaking later today But I think realistically tomorrow's CPI number is going to be quite key with the markets trading at these levels Full of time being and and as well with equities largely consolidating if anything at this point in time Up close to still record levels Elsewhere on the new sphere. What else is going on? Well, you probably read a few headlines The US Senate is set to vote today on the passage of a one trillion bipartisan infrastructure bill now We'll then immediately begin to be debated Around a far greater reaching three and a half trillion dollar bill So Senate Majority Leader Chuck Schumer announced late yesterday that a week-long debate on the The bipartisan bill will conclude in London timing at around 4 p.m. This afternoon So just so you were of the Democrats are aiming to debate and pass a non binding three and a half trillion resolution as well In the coming days which would serve as a framework for a more detailed binding legislation for later on this year Republicans have stranded strenuously Objected to the size and cost of the follow-up package. So they're a lot more warm to this new Edition of the one trillion bipartisan agreement this bigger broader package Republicans are quite against In terms of the size which Democrats though are looking to aim to pass through something we talked about a few months ago Which is the process called the budget reconciliation? Procedure which is basically an instrument for the Senate Majority to push through legislation priorities Over minority opposition. So that's probably got a long way to run yet The first thing we're looking out for is the the passage of that first section If you like of what includes that new roughly five hundred billion dollars worth of spending on the infrastructure side But you know how important is all that to markets to be honest? I don't really think a great deal at this point in time. It's been talked about so much And it's been around for such a long time. I don't really think it has too much of a meaningful impact It's passage at least in that first first stage at this point in time, but just to be aware of Elsewhere on the COVID side we did talk about this briefly yesterday But I guess a little bit more context around The subsequent hospitalizations with the case rates as we discussed hitting a six-month high in the US presently Nationwide with cases having averaged a hundred thousand now for three days in a row in the states up 35% over the past week Hospitalizations are up 40% and that deaths are lagging indicated registered an 18% uptick in the last week So again COVID cases Context here up 35% over the past week and hospitalizations are up 40% in the past week So when we talk about oil and the sell-off that we were seeing yesterday for example I think you're hitting a multi-month low Then the point being there is about the idea of not just you know China slowing down perhaps and there was some commentary overnight that perhaps they might the PBOC lean towards doing another Triple R cut, but there's also this situation that's happening in the US as well and implications that that can have in terms of People's belief about the strength of the the economic period going further forward in terms of activity If this COVID situation continues to develop in the way that it has been and at some point might require the Re-initiation of some of those restriction measures. So, yeah, there's definitely Part of that oil picture, but as far as oil is today It's just just bouncing back with a bit of profit taking from those shorts from that extension on the run lover that we're seeing yesterday Talking of oil one thing to be aware of is on the National Hurricane Center. There is a tropical Disturbance that is happening at the moment and it's called six and If I click on it, you can see here. It's fairly crude map But in terms of where it is at the moment, gusty winds and heavy rain across the Leeward Islands Have meant that a new tropical storm warning has been issued. The trajectory shows landfill hitting florida On saturday, but obviously does put us as well Into war direction of the Gulf of Mexico Which could potentially threaten exports from the surrounding area So worse keeping an eye on any further developments on that as we go further forward as well So is it a candor for today? It's pretty quiet overall. We've got the germans lew numbers coming out later on this morning at 10 a.m You can see here the headline economic sentiment expected at 56.7 To put that in context 56.7. We've put us back down here, which will be the lowest reading since really december of 2020 so again this covid situation still being a bit of a drag at the moment on European nation's ability to really reopen completely and so we've been seeing Economists and analysts kind of expectation about current conditions in the future deteriorate pretty consistently and so we're looking for the third continued step down in this figure Going forward later on this morning. How surprising that would be. I don't really think too surprising I guess just keeping on the range there the lower bound at 45 Would be down here and we put us down to one of the lowest readings would have seen in the last 12 months if that were the case So perhaps with euro dollar trading around that lower band of where we've been in the last few sessions amid some of the Overall dollar strength could be a catalyst short term for a bit of a break on the downside That could help that dollar continue to move up as we have been seeing Otherwise in the u.s. Afternoon You've got labor costs Productivity q2 figures out of the u.s. I think two major there all in between numbers coming out as per usual later on in the evening at 9 30 Speaker wise feds Mester non-voter But is speaking on inflation risks and is a well-known hawk So keeping on at 3 30 feds Evans who is a voter speaking on the economy It's going to be speaking at 7 30 this evening And evans much more on the dovish side So with Mester definitely going to sound much more like those Three that we've heard from uh that I covered so bostock barking and rosengren evans It'll be interested to see what he has to say um Given the context and the contrast of his general view Um is typically on the dovish side fixed income supply on the uk 58 billion dollars of three a no auction coming out of the U.s. As well and that pretty much concludes What's happening today? So yeah pretty quiet overall Um, I'd say today needs to be approached then with that in mind With the cpi looming tomorrow um, so Technically speaking having gone through the charts this morning. There's nothing really standout that looks particularly um appetizing from a trade setup point of view. So I think today is a lot about just being Kind of pragmatic to a certain extent And keeping perhaps your your power to drive for tomorrow But obviously we'll continue to keep you posted if anything else does change You'll be the first to know. All right. Have a good day guys. Take care