 Okay, very good morning. It's Thursday the 23rd of September and thank you to everyone who joined me live on the YouTube channel last night For the live coverage of the FOMC. I will be going live as well at around 11 45 London time late morning to cover the Bank of England announcement at midday So if you'd like to join me, there'll be a full chat function Absolutely happy to have you on board and ask lots of questions as we go through that latest announcement in real time Otherwise I'm going to talk about the main man Jerome Powell and to be quite honest He's doing a good job and as far as markets are concerned at the moment I wouldn't have too much in a way of hesitation to say that we saw relatively muted reaction Even though the strongest signal has been given yet that the central bank will begin Most likely scaling back its asset purchases in November and complete the process by mid 2022 Powell himself said in his own view that the substantial further progress test has been all but met and terms of market reactions that have been seen this morning and How the charts look equities? We did have volatility on initial release. It was kind of a three-fold Reaction as far as I saw it initially you saw stocks drop dollas and yield spike This was on the initial move that only lasted perhaps several seconds And that was because some of the first information to hit the tape was talking about as I said on tapering But it was also some changes on the dot plot in a more hawkish fashion However, then as this continued to kind of be digested I think the overall takeaway here is that there wasn't anything really that was too unexpected Shifts in a more aggressive trajectory of rate hikes in the future Commencement of tapering the fact that inflation is still seen as transitory All of these things aren't that outside of what people most people were looking for anyway So there was a bit of gyration in market price But if you actually look at things at the moment Gold remains lower now despite initial rallies that was seen last night Yields also on the front foot. So t-notes a little lower equities holding up and the dollar has Held on to a partial amount of the game scene yesterday, but well off its best levels So overall, I would say it was a relatively controlled response to what otherwise is the Fed just on track at the moment Just going through then a couple of comments here from power and a little bit more detail So other than the headline as you can see here a lot of the media agencies are covering this morning Officials also published their latest quarterly projections And of course, this is the infamous dot-plot, which we were looking at last night and it showed officials are now evenly split 99 on whether or not will be appropriate to begin raising the federal funds rate as soon as next year Next year 2022 so actually the first rate hike has been brought forward previously. It was for two rate hikes here In 2023 that's now gone up by one to three and then there was an even split So indicative of one singular rate hike coming as soon as next year So liftoff happening a little bit early and anticipated pal as to be expected was very conscious though of Trying to decoupled out of tapering and rates He said that I quote the timing and pace of the coming reduction in asset purchases Would not be intended to carry a direct signal regarding the timing of an interest rate liftoff Few other things then Overall, it's a very good outcome from the Fed really in terms of signaling their intent to get the market information Well ahead of this tapering decision As you will know, they've been talking about tapering now for several months But this is very normal tactical approach in order to kind of drip it feed it into market Expectation and pricing so that the actuality of it happening now is very much baked into prices The equity market specifically looks to be taking Some of the early queue and initial rally that we saw last night on the fact that there was quite an upbeat growth outlook both 2022 and 2023 outlooks were upgraded and Also, there were perhaps some looking for more of a cleaner break to a move to a 2022 hike But in fact that split of the 18 FMC members was even at 9 9 And so yeah equities remain pretty unaffected at this point in time and continue to just track higher and Yeah, as I said overall conclusions is we continue on it looks like the Fed then will Look set to commence tapering in November So there's still much to look out for in terms of the composition of how they'll do that But timing-wise they've also said as well about the process being completed by mid 2022 So that information now into the market And that in itself was also a little bit more on the hawkish side because the more dovish Expectations were for a 12 month tapering process and this would be of course shorter than that Otherwise some of the big news from overnight was that in regards to China Evergrande So the kind of beaten down Chinese shares of property developers in particular and tech giants Which obviously have been impacted heavily from the crackdown we've been seeing for many weeks Casino stocks in Macau as well getting hurt by a similar rhetoric coming out of the state They all moved higher overnight amid hopes that China Evergrande group is making progress We're dealing with payment deadlines much to a similar ilk of the headlines that we had yesterday We also have that large-scale Nearly 19 billion dollar liquidity injection from the PBOC The latest here now is that Chinese authorities as per this article Have begun laying the groundwork for a debt restructuring and that in itself would greatly reduce the risk of contagion from any uncontrolled collapse of the of the company So the HangSan property index gained as much as 5.2 percent Overnight the tech companies Macau casino operators were up in excess of 3 percent Evergrande shares themselves overnight We're at one point up as much as 32 percent They have come off that highest level as big as pop They've had to the upside obviously in a long time more than a decade They're actually they've paired some of that but they're still up around double digits of around 10 to 11 percent at the Moment so as well that's providing a bit of relief to the equity space Which otherwise was under pressure on some of the nervousness about a complete collapse and the spillover effect that that could have Not just in China, but for the global economy Pow himself was actually questioned on Evergrande as you would expect in the Q&A He said the situation seems very particular to China and not a lot of direct exposure for the US to the Evergrande situation and of course this is kind of Comes in the context of power would very much be in dialogue with some of the major banks in the US Day-to-day over these types of situations because they would want the latest intel of Exposures if any so that they could make any appropriate liquidity adjustments and so on in their own market But as we heard yesterday city group They already said according to their spokeswoman that there's no direct lending exposure to Evergrande and sources on Bloomberg We're also saying that JP Morgan and Bank of America have no such links Which of course is in fitting then was what powell said yesterday with there not being a lot of direct exposure So again a degree of relief on the back of that. So, yeah, China really positive overnight I wouldn't say we're out of the woods yet on Evergrande But short-term it's just helping stabilize sentiment from compared to where we were a couple of days ago at the beginning of the week Looking forward got the Bank of England coming up Definitely not expecting anything from a policy perspective. So Record low interest rates the asset purchase program currently stands at 895 billion sterling is going to be unchanged At least one of the nine members of the MPC This being the new constructed board because there's two new members here You've got Hugh pill and Catherine man Will be voting for the first time Bloomberg economics reckons pills previous remarks questioning the wisdom of QE Make him a little bit more neutral to hawkish side comparative to Catherine man on the dubbish side who has Shown some sensitivities to the plight of unemployment rates Which would kind of tip her more into the dubbish side here Hence her more left leaning on this kind of chart Saunders is the one that's going to be outlying Saunders did break the pack and Voted for an immediate end to QE in the last meeting one would very much expect him to do the same again this time But I guess but perhaps someone could join him Maybe not that being the consensus But if they did obviously initial knee jerk reaction could be a momentary blip higher in sterling currency So science should just be aware of there is no projections coming out. It's not a monetary policy report month And so that's not going to come until November now given the last one in August and so it's just going to be the rate the statement We'll also get the vote split and then the minutes as well Which will come out uniquely to the Bank of England at the same time a few things in the backdrop here The economic picture kind of has dimmed a little bit in the UK the Bank of England It's latest forecast they published in August anticipated to 2.9 percent expansion in Q3 a 2% in the three months Of the year for Q4 a median forecast for economists polled in September by Bloomberg would say that that 2.9% for Q3 is likely to be moderated to 2.5% in this quarter so growth being a little bit less As as good a recovery as what they were anticipating at that meeting that point in time for inflation Meanwhile, that's actually got above a little bit more aggressively the Bank of England's 2% target hitting 3.2% Of course in August the banks outlook though and the reason why markets been fairly managed and their response to that increase inflation Is because of their guidance that it will touch 4% this year In response to the lifting of virus restrictions before then of course being this transitory effect And it would fall back in 2022 23 another point which might keep The hawks at bay at this particular juncture is the fact that 1.6 million people are on furlough and millions more Unemployed and the question is whether a slowing economy can absorb all those who are looking for work particularly as furlough comes to its conclusion At the end of the month So as I said, I'll cover this all live So feel free to join me if you're not subscribed to the channel just do so click that button Hit the bell icon and you'll get a notification when I go live Otherwise just having a look this morning some interesting data actually coming up You've got the flash manufacturing service PMIs for the Eurozone and the UK so France 815 Germany 830 UK at 930 These do tend to have an impact on market prices in the intraday environment in terms of actual expectations here looking for pretty much constant Performance from last month in August if anything maybe a slightly downside figures could could be Anticipated but nothing too dramatic. So anything other than that would be more on the surprising side whether strong or weak So definitely has the impact to move euro in the emission initial aftermath as well as European yields rates market and Dax and European indices so definitely worth keeping an eye on those Bank of England at midday The US session weekly jobless claims expected to see another drop down to 320 from 332 seen last week And then you get the market manufacturing service PMI flash data coming out the US at 245 today CAD retail sales also Coming out this afternoon for any loony traders, and then you've got a two five seven year Refunding announcement for any fixed income traders before the US afternoon that announcement come from the Treasury at 4 p.m All right, that is it. So I'll leave it at that any comments at all. Feel free to just ask a question below Otherwise, I'll see you online live 1145 for the Bank of England. All right. Take care