 Okay, very good morning Monday 12th of July and Congratulations to Italy for winning beating England on penalties last night at the Euros and for England a good run Of course best performance. We've had reaching a major tournament final in 55 years and much to be proud of and if anything through that failure comes all the more greater Motivation determination to just get the job done and move that next step up come the World Cup obviously in literally just a year's time or so so enough said on that and I hope everyone is is Managing to get back to business this morning and actually looking at markets. There's Plenty going on this week in terms of the weekend news flow though. It was very quiet There's a couple of things to get up to speed on from ECB president Christine Lagarde some interesting comments that she made There's also updates on on COVID both the UK lockdown strategy and as well as COVID updates elsewhere in mainland Europe and Australia and also going to talk a little bit about Geopolitics particularly that between the US and China still kind of simmering in the background although not a major market Influence in terms of moving price right now definitely warrants just being vigilant and watching that situation And then for this week, there's a lot going on We've got US inflation data retail sales industrial production Jerome Powell gives his semi-annual testimony and US earning season kicks off this week with the big US bank So plenty for us to talk about but looking at the charts this morning Asia pack stocks generally beginning the week on the on the front foot Nothing spectacular overnight, but mildly positive Conformed to the positive mood generally seen in Chinese markets following the PBOC surprised Reserve requirement ratio cut and triple our cut we had on Friday. I have just a quick look at the S&P 500 We have then as we saw late last week after that really nice recovery Going into Friday session initiated from the overnight Asia pack trading session And we have actually hit fresh all-time highs in the overnight Trade which came literally at the recommencement of trade We've drifted a little bit south from there finding a little bit of support from the previous all-time highs that we were seeing around Tuesday of last week But still remaining very elevated And that comes of course amid some of the slide that we did see in equities Through a brief period the beginning of last week as we saw yields as well seen quite Distinctive movement to the downside, but Friday was actually the first day in several that the yield Appreciation if you like debucked the trend and T notes at the moment bottom right as you can see here Trading basically flat going into this European market open So you can see here the 10 years well off those highs that were seen In the middle of last week when we were trading up above 134 handle when our back down to 133 12 as far as the overnight session is is concerned Currency-wise the Dixie's a touch firmer this morning Nothing massive up about one tenth of one percent just from a technical short-term perspective in euro dollar Just been keeping an eye on this trend line here going back to price movement from the 30th of June had a retest on the 6th of July And back to where we were from late in futures trade on Friday and the overnight Asia pack high was around a similar price point We've just drifted off a little bit as the dollars just picked up pace and through the back end of that session into the European open So nothing really too dramatic here. I'm looking at from a technical perspective at the moment And likewise could really be said for cable Cable again forming a short-term double top from that Friday overnight price activity And just forming a bit of a base here through that range of age pack from one 139 13 down to 138 85 for the moment on a daily chart for cable We're in the kind of bottom side of that inflection point around 140 in sterling futures So sitting pretty mid that range for the time being We'll have a look at some of the UK things that are coming out When we start looking at the calendar for the rest of the week But also looking for another update from PM Johnson of course later on tonight to confirm the final unlocking for the UK economy on the 19th and then elsewhere in the quantity space in terms of gold Just from a technical perspective. I was just marking up a few things this morning and was just looking at this Trendline going back to mid-June and then more short-term from really last week that we've been respecting and Just having a little test down towards DS one here more recently in in gold, which is around that $1800 price point any further decrease beyond that level. I'll be looking at 1795 as an area of more stronger support which would encapsulate as you can see here some of these previous areas of resistance Term support as well And then for crude oil no real major or any OPEC headlines to speak of So after a lot of that toing and fraying of what would happen with that supply agreement deal Things have gone a little bit more quiet on that front As far as oil is concerned. We just ran into a bit of a Short-term top at the recommencement of trade which coincided with around that high that we had printed back on Last Tuesday. We've just drifted down amid some of the renewed dollar strength as Europe has come in so both oil and oil Gold and the major currency pairs all just reacting a little bit to the marginal strengths and the dollar coming in Pivot seed just below around the 74 handle today But again, nothing really technically to Jump out interesting in terms of where we're trading at the moment in oil So let's get straight to it and start talking about the news because there's plenty to Digest for the week ahead as well. I'm starting off with a piece that came out late last night citing commentary from ECB president Christine Lagarde and Days after the ECB have raised its inflation goal to 2% and acknowledged it might overshoot that target Lagarde said that the July 22nd governing council session so 10 days from now Previously expected to be a fairly uneventful uninteresting event. We'll have some quote She said some interesting variations and changes now She expects the ECB's current 1.85 trillion euro bond buying plan to run till quote at least until March 2022 and then that could be followed by a Transition into a new format. She said without elaborating though The other comments of note and she said we would need to be very flexible and not start creating the Anticipations of the exit is needed in the next few weeks and months. So overall, you know, this is it with central bank commentary It's a little bit cryptic in a way the headline Bloomberg are running is a little bit Sensational I think trying to extract out some sort of hawkish element to what she was saying I don't really see it quite like that The bomb buying ending in that way. I don't think it's unsurprising She's talked about as well not starting to create any anticipation of tightening Too rapidly so it's fairly balanced and and the 2% target We already know having had the confirmation on those details last week So I just wanted to cover it. It's definitely not a factor. I think there's influence in the euro this morning But she did appear on Bloomberg TV and Bloomberg themselves then having the exclusivity over that interview I think they're just trying to squeeze the The content of her speech to to make the most of it has would be my interpretation Otherwise moving over to the covert side In a news conference due later today and the PM is widely expected to confirm that mandatory curbs will be Ending as planned on July 19th, including the legal requirement to wear masks in indoor settings He'll also warn that unlocking will drive a new surge in cases He's already kind of started to drip feed that in to the messaging from last week Because you remember as has the newly appointed health secretary CG Javid talking about case rates is going case rate case rates going up as high as a hundred thousand in the summer and so he's Said that it will people must take all responsibility in the coming weeks to help keep infections at manageable levels The UK Reportedly is to reduce the gap between taking the first and second doses of COVID-19 vaccines as well to four weeks from eight You remember originally these were 12 So as they look to accelerate that program those time frames are getting increasingly shorter They're also reportedly planning to require COVID-19 passports for customers to enter bars restaurants and nightclubs According to some of the UK media At the weekend so does come of course of a continued uptick in the infections per day in the UK And definitely will be continuing to monitor this number Also the kind of tail effects of the euro championships having happening in Wembley as you've seen was fully Occupied kind of stadiums back to back to normal We're interested to see how those numbers start to play out as we go further forward over the coming week or two But this number as already mentioned is expected to Triple basically in the in the weeks and and kind of next two months to come So I don't think it would be all that surprising and hence the reason why the pounds relatively controlled But one thing is the hardest number goes then although those the rate given the demographic is much more proportionally Lower than previous for hospitalizations and subsequent deaths Hospitalizations are coming up at this point. So it definitely worth keeping an arm While the UK goes into kind of full unlocking mode so to speak on the flip side and the Dutch PM came out over the weekend and Announced that COVID-19 curbs would be partially reimposed in the Netherlands From Saturday morning due to a surge in infections And they're going to remain those restrictions in place until the 14th of August and then jumping elsewhere Globally, Sydney is bracing for a longer and stricter lockdown having already seen it extended After continued increases and COVID-19 cases as well So now just interesting to see then the difference in government strategy here The UK kind of pushing ahead with this kind of self-coined freedom day Whereas in other pockets around the world with the Delta variant still causing And noticeable upticks in case rates. They're opting for a more cautious approach for the time being From a geopolitical point of view There was few comments that that were fairly interesting over the weekend and one was that China said on Sunday it Resolutely opposes the addition of 23 Chinese entities to the US economic blacklist over issues alleged over human right abuses and and military ties Beijing went on to say that it will quote take Necessary measures to safeguard China's legitimate rights and interests and at the same time we had Other news that came out which was which was basically this and it was talking about the idea that China Their military apparently drove a US warship that illegally entered Chinese waters near the part Parasol Islands on Monday And so again Not that this is particularly new and I wouldn't see this as like a step towards closer towards engagement in any type of way It just goes to show that tensions and friction between these two countries remains and pretty tense at this point in time Otherwise, let's just take a look at the week ahead and got a calendar here But I can talk you through some of the main things and as you can see on Mondays pretty quiet overall And so Tuesday is really where things start to pick up pace a little bit and first off that you can see here is the US Inflation data big week for US data in fact and for inflation On Tuesday it's expected to come in headline reading at 4.9 percent Remember we had that very high 5% reading in May and the core reading is expected to see an uptick to 4% Business executives have continued reporting brisk price increases according to the closely watched survey to we had in the last few weeks From the Institute of Supply Management in those PMI numbers Prices paid by manufacturing firms are rising faster than at any point since the late 70s 1979 at the moment with those paid by services companies rising at levels not seen Since 2008 also reading a few other bank commentary pieces Apparently used car vehicles that continue or set to continue to really elevate inflation prices So continues to place somewhat into one of those transitory Components of the way of which CPI is composed But you know how sticky and how high it was inflation is still going to be key things to to watch at the moment But given some of the yield movement we've had over the course of the last week or so The CPI kind of sting has probably been neutralized a little bit Or be it's still a very important number markets will likely still remain quite sensitive to it Also as well going through into Tuesday night into Wednesday I think it's probably Tuesday night You'll get the prepared text and then he speaks on a Wednesday for the house and then for the Senate on Thursday Is fed chair pow delivering his semi-annual testimony? So you can see that here top one on Wednesday And analysts are ING make a couple of good points They said the Fed made it clear that by moving into an average inflation target They're prepared to allow the economy to run somewhat hotter with inflation Temporary running above target as we've just discussed and is like to continue to do so this week And that's to ensure then that more people feel the benefits of growth So however given the supply side strains in the economy the likely timing of policy tightening is being brought Forward as we know and he may offer power This is clearer hints that a tapering of QE asset purchases will start this year. So Is this meeting a little bit too soon a lot of people had obviously penciled in the Jackson holes in posing Which isn't coming for another five weeks or so until we get a little bit more definitive hints So I'm a little bit on the fence with that I don't think we're gonna get too much from pal on the giveaway with tapering to be honest with you this week And I think he's more likely to just wait See how the market develops between now and Jackson home five weeks time both from a Actually meaningful yield movement like what we saw yesterday to see how markets perceptions are and then also Equipped with more economic data points that would have come in by that point about different pockets of the economy and how We're performing to make that assessment. So powers important I don't think it's going to be a real dead giveaway with more clear hints on tapering personally but definitely the more Specific on that then the more sensitive markets will be obviously in a negative way towards more faster Acceleration to tightening and tapering and then the opposite vice versa firm He starts to push back against the idea of that discussion developing anytime soon The other thing is that we're gonna get you can see here You got UK inflation metrics as well coming out on Wednesday Expected to show an uptick to two point two percent year-on-year for June from the two point one percent in May for the headline Do remember though? I think when it comes to UK inflation the Bank of England has said in its most recent policy meeting Last month that while inflation was likely to exceed three percent It would later fall back and should not affect monetary policy and as such I think that yeah, unless it's spectacularly out of line to the upside. I think just Inline readings point one or two higher I don't think necessarily he's going to create too much of a destabilizing effect for market participants Kind of view around what the Bank of England are going to do with policy They've already kind of bought themselves the wiggle room Saying then in the period ahead. It's likely to go much higher than what it currently is Expected to on this week's print Otherwise on on Wednesday as well You've got the RBNZ meeting Going in overnight into into that day the statement will be published alongside decision No changes expected at this meeting But the statement will be assessed carefully for any hints of a potential hike this year And then you've got the Bank of Canada as well as you can see here in grey They're set to announce another tapering of their QE asset purchases reducing it to two billion per week From three billion having already kind of staggered it down from five billion where it started so Definitely gonna be one to watch there from Canada then going into Thursday And you get the initial jobless claims, of course We'll be tracking those as per usual worth noting that overnight in Asian trade I think we've got trade dates on Tuesday We've got GDP retail sales and the like on Thursday from China in the first quarter of 2021 The Chinese economy expanded by an incredible 18.3% but the unusually high rise of course has been driven predominantly by those low base Effects at the start of 2020 due to the pandemic and in a quarter and quarter terms GDP rose just 0.6% for China, which was far below expectations So data released on Thursday from from China is expected to show retail sales as well growth of 12% on the year and this data Of course in focus just given the surprise cut to the triple R that we had at the end of last week Which often historically kind of precedes then lower data points So the Chinese government in preparation looking to get ahead of the game and add some liquidity to the system And that certainly has helped stabilize things a little bit as far as the overnight session to start this week Has been concerned in in the Far East Elsewhere then going further forward Beyond that point into Friday. You can see here. You've got US retail sales So lots of key data coming out the states this week the consensus view currently expects US retail sales to have been Unchanged in June versus the the 1.3% decline in May auto sales would like to be the culprit of the lackluster report Analysts at Credit Suisse make some interesting observations They said that citing high frequency data that the restaurant spending will continue to have picked up in June as the economy Continues to reopen and leisure and hospitality are the biggest benefactors of that in America But goods consumption is likely to have declined And of course this comes after those stimulus check effects start to fade having had those More show up in retail sales figures in both the beginning of the year and in March as well One potential upside surprise though could come from non-store retailers do remember that Amazon Prime Day Which obviously a big shopping day Was in June instead of the usual July event So something to be aware of and then on Friday. You've also got the BOJ rate decision But not expecting any fireworks there though expected to refrain from any policy adjustments And so keeping rates at minus point 1% and their QQE with your curve control like to be maintained the 10-year JGB or you JGB yield rate of zero percent And then the final thing to mention if I just jump on my Twitter account because I'm sharing some of this Over the weekend is here as you can see US earning season starts kicking off this week And so what are we expecting? Well From a top-level point of view US earning season the S&P 500 is like to report the highest earnings growth in more than 10 years In Q2 remember US GDP is expected to accelerate into the high single-digit teens So that in itself the kind of further unlocking of the economy should see With yields having moved as well higher in those points to be interested to see how how banks have performed over that period During the upcoming week 26 S&P 500 companies reporting that includes four of the major Dowell components And as you can see on this this graphic the key ones we're looking out for in very much a traditional fashion Is nothing really today and then you get JP Morgan On Tuesday before market and then you get Bank of America Wells Fargo City coming out pre-market Wednesday Morgan Stanley Thursday So as I said in typical fashion the US big banks will kick things off and JP and GS first on that list on Tuesday to be aware of And that's pretty much it so I'm gonna leave it there that you guys get on with a day More technical charts and chat will be shared by Tim on the live stream in the Amplify live community So do remember to check that out. Otherwise if you're watching this on YouTube Just remember to hit the like and subscribe button really appreciate it and have a great week ahead. Thanks very much