 Okay very good morning to you. It is Monday the 17th of August. I hope you had a fantastic weekend. Don't forget to check out on my Twitter account. I've pinned the tweet from Sunday for the macro menu, the fundamental kind of three-minute review of what to expect for the week ahead. Do check that out and also don't forget to like and subscribe to the YouTube channel. Has some really great engagement and some good questions last week, so long may that continue. But let's get straight into the actual briefing and talk about a few things then going to talk about the delay of the US China meeting from the weekend, further liquidity injections from the PBOC overnight. Also going to talk about the importance for the dollar from a medium and long-term perspective this week. Could be a real catalyst for a break of some key trend lines we've been watching in the likes of Eurodollar and in Aussie dollar. And then also going to talk about the calendar. We've got the FMC minutes of course on Wednesday and you've got a variety of economic data coming out throughout the week. Also a quick update on the things like COVID, the JMMC meeting as well. So that's what's on the agenda for the briefing. A quick look at the charts this morning though. And I was kind of tracking, you know, one thing I look at to just gauge very simply sentiment over the weekend is if you were just to punch in to Google the weekend Dow by IG, which is kind of a product that they've created in order for people to trade the US indices over the weekend where obviously the major markets are closed, it would just give you an indication then of whether or not markets are going to gap up, gap down or accordingly at the reopening of trade for the week. And yeah, it was basically absolutely flatlining all weekend. And when I was going through the news on Sunday, riding my macro menu, I was just a little bit surprised about how really quiet it was. I mean, obviously a lot dominated by the delay in the US China trade talks, which we'll talk about in a moment. But very quiet overall, there's certainly lots going on this week. But the weekend news flow was pretty tame at best. Just having a look at the charts then this morning, Eurodollar seeing some slight upward movement, cable pretty flat though for the moment, gold equally so, just sitting around what has been a technically important level around 1954. Equity indices, US touch higher, the DAX a little bit lower 17 points this morning, and the US 10 year up three and a half ticks in combination with gold up around three bucks, and then oils up about 38 cents as well. So all in all, you know, the Dixie training down about one tenth to a percent, it's a pretty quiet open to kick things off. And that might be surprising for some who obviously a lot of their market attention at the weekend was into this teleconference call that's supposed to be happening on high level officials between the US and China. And you could be forgiven for thinking that a delay and that meeting not occurring could be considered as a negative in terms of its reaction on market prices. But as I'll describe, there are a number of things that China basically has been doing in terms of accelerating its purchases of these goods as what was per part of the original plan for phase one. And that seems to have just kept both sides then happy for the time being. And whether or not there is a meeting to follow up in the coming days or weeks, I don't really think is that important. What is is that China start after being very uncomplaint with the deal that was in place as long as they start to fall back in line. And I think both sides will be happy at this point in time. So a quick look then at this, this Reuters exclusive, which came out at the weekend and got a couple of notes here. So the US and China delayed their review of phase one that was initially slated for Saturday. This was supposed to have been the sixth month anniversary from when they initially signed that historic deal back in February. They cited in terms of the official reasons, scheduling conflicts and also allowing the time for more Chinese purchases of US exports. No new date has been set as yet. The postponement did not reflect any substantial problems with the trade deal, according to one of the sources in Reuters. Another source familiar with the plan said US officials wanted more time to allow China to increase its purchases of US goods agreed in the deal to improve the political optics of the review. China imports. So this is where there's a little bit more detail now. So China imports of US farm and manufactured goods, energy and services are well but behind the pace needed to meet that first year target, which was an increase of $77 billion over 2017 purchases. Remember over a two year period, they committed to an additional $200 billion but if you look here a couple of things then Chinese buyers have been snapping up generally commodities on Thursday last week. They booked deals to buy about 200,000 tons of US soybeans and that was the seventh weekday in a row that the government had reported a sale to the world's top buyer of oil seed. The other thing as well is Petro China so far has booked about 10 million brows of US oil loading in August and September as well. So a lot of this then, I mean if you look at it here, US crude exports to China, they jumped sharply here more recently as shipments to China are set to rise sharply following that state-owned firms of ramping up purchases of US specific crude. And remember China typically a big buyer of the more heavy grade of oil that comes out of the Middle East and predominantly Saudi Arabia and particularly Iran as well. But also just looking to appease then on this deal and the Americans at this point given some of the recent escalation we've seen whether on the tech side through TikTok and WeChat or whether through the political side with the consulate situation and what's been going on in Hong Kong with that national security law, things seemingly are starting to fall a little bit into place here. So I think on the balance then although this meeting hasn't occurred I think the message has been received in my view by Beijing which is that over recent weeks then knowing that there was a formal kind of meeting or gathering that was due to take place they've just started accelerating now Batsuo's purchases and then partly I guess due to the fact that economically things in China have stabilized somewhat. If you think about it the deal was signed in kind of February time but that was pretty much about a week and then COVID broke. There was a COVID outbreak in mainland China which of course is where it all began with the pandemic and so China's all was always going to be behind the curve in terms of these purchases because there was no way they were going to be buying large amounts and importing goods through that period March April. So I think for the moment then Trump will be happy he'll be able to say well look the tangible result of what I've been doing in terms of being quite aggressive with China is paying dividend here because of look at these numbers and I'm sure he'll be tweeting about how much of US goods that they're buying to try and dismiss some of Biden's claims about the whole thing being quite economically damaging for the US economy. So yeah the other thing is overnight in terms of the Asia-Pacific indices the Shanghai Composite did actually outperform. This was against a fairly flatlining Asia-Pacific region overall the Shanghai Composite was actually up in excessive 2% at one point. The PBOC once again boosting the liquidity they've been doing it in all forms of duration over the course of the last week or so they added 700 billion yuan in one year funding via the medium term lending facility overnight that equates in US dollar terms to around a hundred billion dollars worth. The net injection according to what analysts interpretation is that it indicates a more cognitive stance on keeping liquidity levels ample so that commercial banks can continue to support bond issuance and to stabilise credit growth. So rather than in a Western format where the central bank just interjects or intervenes in the form of government bond buying in QE they're looking to support then the commercial banking sector so that then it's kind of dripped down and as long as there's liquidity in that area then it can facilitate then the companies and consumers being able to remain confident that conditions will remain generally low in terms of lending rates so that continues to be their strategy at this point in time but does show then that a general easing bias in their monetary policy strategy from overnight in Asia which if anything as we've seen globally whenever we see a more expansive more cognitive monetary policy stance it typically underpins then supports markets going forward that's happening in China. A quick look elsewhere and I just wanted to talk about the dollar because I read this article this morning I thought it was quite interesting because I was looking at a couple of charts I know Sam if you if you didn't see it he did an excellent video with his trade setups that he does on Sunday for the week ahead and he was talking about this at length and first of all some details here so hedge funds are short on the dollar for the first time in two years as falling US real yields are sapping the currencies allure this is coming out in Bloomberg this morning so the actual details here is that net futures and forward positions held by leveraged funds against eight other currencies dropped to minus close to 8,000 contracts last week according to the CFTC the swing was driven by growing bullish bets on the euro so this isn't very different from really what we've been talking about for a while but you know the reason why this is quite interesting of course is because we've been eyeing up this euro long-term chart for quite a while and here we are this morning you know just kicking things off we're just going to the european open right there back at that key critical level so definitely for this week I mean obviously we've got the Fed minutes we'll talk about those in a second well in fact let's just incorporate the Fed minutes into this discussion here now the last Fed meeting that we had was fairly benign there wasn't really any way of expecting more surprises against expectation that came out but analysts at ING this weekend were writing that any suggestion at impending average inflation targeting or yield curve control could be perceived as a dollar negative that in combination with the fact that we've got the eurozone PMI date is coming out the end of the week and that is expected to continue to show a relative rebound that could be the catalyst and so a couple things there midweek end of week generally then still support of this narrative where we've got a weakening dollar story against somewhat a continuation of more bullish themes for the euro and again we've we've been rejected a number of times here up at this key long-term trend line and summer 2018 high but I do feel that a break is going to come this week and if that does then a big push up to 120 is definitely the kind of area I'd be looking at in particular 120-50 which starts to incorporate some of those highs from 17 and then support point back in August of 2012 but we're talking quite long-term levels here if that does really get ahead of steam well then the medium-term target for the euro then would be up at around this 125 which I know Alex has been calling for for quite a while just going to quickly see if I can bring the Aussie in I haven't marked up the Aussie you have to forgive me but I do recall that Sam was talking about this in in quite a lot of detail let me just remove some of the pivots kind of weekly so let me just put a trend line on here if it will allow me again apologies I've not marked this up in advance but I believe this is what Sam was talking about here so as you can see it's pretty similar ish slightly shorter time frame to what we were talking about in the euro but going back to 2014 had a test up at around the beginning of 2018 and here we are again here so interestingly for the Aussie despite the slight apprehension because of the repercussion that any fallout in in trade rhetoric with China could have and it has been a fairly rocky relationship of late despite the ongoing fact that the COVID situation has hit the Australian economy particularly bad it comes in addition on the coattails of those bushfires that we saw which were going to be economically damaging as well the Aussie still be firm at the moment I mean but like most other currency pairs like the euro and cable for example being a beneficiary of a generally weaker greenback and here as well quite a key level to watch in the Aussie any break above then you've just got that high from the deck of 18 that would be up at around the 174 handle but you're talking about a decent two point plus move beyond where we are trading at the moment if we were to break through these levels so the point being here is that I think that it's a big week for the dollar personally and certainly then keeping on that yield story which was obviously a real focal point for last week whether or not then we start to reverse back into trend after that brief momentary kind of yield push that we had as ultimately you know the longer term view here is the Fed are going to remain accommodative there's a risk of that even emerging in the minutes I actually think the minutes will be quite dull personally and I think that just heightens the importance then for the Jackson Hole Symposium which will be hold virtually this year that's taking place to a week after so August 27 28th and then that leads us into the meeting on September 16th for the FMC and I actually think that September meeting is the big one for the Fed because I think by then they're going to have a little bit more clarity over the current COVID situation which is shaping up relatively positive in the US but they're going to have their latest projections that typically historically means that they like to give a little bit more transparency to supplement then any particular more enhanced forward guidance they might issue at that time so yeah that's my overall kind of take on those those things so yeah keep an eye on the dollar for sure and actually this morning we've just dropped through 93 and we're at lows now so since I've been talking the dollar has been weakening we're down two tenths now so keep an eye on those major currency pairs could get quite lively even today other headlines this was something I thought was quite interesting this is the German Finance Minister and reports are this morning that he's proposed a 10 billion euro plan to safeguard jobs so the details here is that extending as extending the job preserving and subsidies during the coronavirus crisis to 24 months this is above and beyond the the regular more 12 month kind of fixture saying the measure would cost the government extra 10 billion euros or less now 10 billion euros sounds like a lot of money but actually if you can keep people in jobs and that work and continue to then facilitate the economic recovery well then 10 billion euros could be deemed as a bargain if all things play out accordingly and the reason why I think this is quite interesting is that obviously there's a lot of pressure building on the UK Chancellor Rishi Sunak to deliver something similar perhaps because when the furlough ends is when we should be looking to strike a tentative agreement then on Brexit which is coming in the autumn around October time and I just think there's going to come a little bit of a crescendo here for UK focus at that point in time because there's a lot of meaning around that that kind of October timeline so it'd be interesting to see Germany have gone for it whether the UK will do the same obviously it comes at a cost though talking of the UK and just having a look at the UK I'm just having a look at the pound at the moment obviously the pound in itself has been kind of carving out a little bit of a of a range which we've talked about last week that did hold last week 130 to 132 on the upside obviously into that dollar weakness story could see us retest up at these year-to-date highs around 132 plenty of things going on in the UK this week from a data perspective you've got July CPI August PMIs and July retail sales data all throughout the week the activity data should support the recovery narrative even though the outlook may start to deteriorate in September as higher joblessness starts to come through one interesting thing I saw from capital economics who do tend to be on the quite bearish side of things they said that the impact of tax cuts for the hospitality sector and a government subsidy eating out program could mean the UK enters a brief period of deflation so I could come forward it'd be interesting particularly then this is July CPI data we'll get this week but then for the August number the following month also as well to boot with the economic updates the next round of EU UK Brexit talks recommenced this week as well so yeah plenty going on from a UK perspective for you guys to be aware of okay moving on the next thing I want to talk about quickly is the oil market Bloomberg just just locking in on on really two main things one being the the JMMC which stands for the Joint Ministerial Monitoring Committee they're set to meet midweek it's going to be closely watched to see how basically certain countries being identified specifically as Iraq and Nigeria those who have been corporates of high uncompliance in the past and how they were deering to this new plan remember as part of the existing OPEC deal it was important that a lot of these uncompliant countries would cut even deeper than what is necessary month to month going forward in order to make up for that lack of compliance in the past so whether or not that is happening will be quite key to see whether there's any longevity or not with this deal really really biting to help markets or underpin and support the crude market it's not expected this meeting the JMMC is more of a technical update than it is something spectacular in terms of the way of real new meaningful decision-making on on the deal itself so shouldn't be too exciting the one thing though that might help underpin oil is kind of like what we were talking about with the Chinese story earlier remember what I said about the fact that Petrochina the state-backed energy company here is booked about 10 million barrels of US oil loading in August and September so this is a really important kind of step here and you know if that then starts to mean that China are ramping up and if there is let's say a continued pickup globally in demand which yes in the case of America things on a covid side are looking fairly good at the moment but elsewhere in the world there's obviously been new travel bans in Britain on the likes of quarantine in France and Netherlands people traveling to those locations quite a few European countries Germany France Belgium Netherlands have seen minor upticks Italy and Spain closing nightclubs at the weekend but you know if covid remains relatively contained at this point then certainly China ramping up their purchase of US crude could help then us start to see a bit of a breakout of what otherwise has been a period of consolidation around this 42 36 a really key area we got rejected on that March 2nd lower 43 32 back on the 5th of August that's kind of the nearest upside target here and we are you know within one dollar range of that as we speak to kick off the week interestingly short-term price action you can see the 21 DMA has provided quite a nice area of support both on Friday session but also on Monday session and the prior Friday back on the 7th so near term I'll keep keeping an eye on there and yeah let's see what can happen for the oil market if we continue to kind of edge up and sentiment remains fairly positive if equities continue to claw up to record highs we got just short of at the end of last week in the likes of the S&P for example I'd expect that to be fairly correlated then with oil moving and following in tandem with that with that progressive move higher okay quick look at the calendar then for the week ahead from a US data point of view this afternoon you've got US New York Fed manufacturing you've also got US building permits and housing starts and then you've got the Fed minutes the FMC minutes coming out on Wednesday night so they're kind of your main things coming out in fact from the US for the whole week one other thing you actually have got that's happening Monday through Thursday is it's the US Democratic National Convention now I did talk about this a little bit more detail in the macro menu so I'll leave you there to review the full report but this is an update on the real clear politics average kind of poll of polls and we have been seeing I mean it's actually come Biden was actually a little bit had rewidened this lead a little bit further yesterday it's actually narrowed again slightly now you see it's just bumped up on Trump here overnight literally and the lead though has rewidened since Biden has appointed Kamala Harris and going into the convention week analysts do suggest then that just given the amount of press attention media coverage it gets it does tend to exacerbate then probably in favor of the political party holding the event so you'd probably expect then by by middle to end of next week that that number of seven and a half percentage point lead on average for Biden might well increase to eight and a half nine again how sustainable that can be yet to be seen if you did want the full speaker scheduling for the entire event you can access this here again the link is in my macro menu but one of the things I talked about there was this site if you've not looked at it before 538 it's one of the most kind of infamous statistical modeling websites by a very famous chap called Nate Silver who gets closely followed every political event that happens in the US and he basically last week unveiled his latest model for the US election and where he simulates an election 40 000 times inputting then a whole multitude of different variables to see what the outcome would be if the US election were to happen today and basically the sample of 100 outcomes came out that Biden would win 72 in 100 times now interestingly this is pretty much exactly identical to what his model was suggesting that Clinton would win over Trump in 2016 and obviously we know what happened there but the point being is between now and November is a lifetime in politics as we know it's a fairly fluid situation one story that comes out or a misplaced comment can shift things spectacularly bottom line this is to be monitored going forward in combination with some of that rcp average polling check it out though this website there's some really interesting analysis here I particularly like this the path to victory where he basically identifies the solid wins for both camps but then almost chronologically and how to then zone focus on the night of election where the tipping point of balance might come dependent on various different indicators that we know at this point in time so here Pennsylvania could be that tipping point alongside Florida and Minnesota and either side so yeah check it out it's super interesting analysis that he does and it is something that is very closely followed by in the market otherwise just going back to the calendar as I said from the UK you've got quite a few other things coming out you've got the the CPI number the retail sales figure the the PMI numbers and you've got Brexit talks happening and they meet those chief negotiators on on Friday you've also got the ECB minutes on Thursday as well as RBA minutes tonight going into tomorrow morning from an earnings perspective things start to turn off a little bit from a brick and mortar point of view and obviously Home Depot is quite a big Dow component you've got them and Walmart reporting pre-market on Tuesday maybe worth just keeping an eye out on as well but yeah that is it for the briefing this morning hope that was useful any questions at all just let me know and I'll see you same time tomorrow all right thanks very much and have a good week