 Okay, hi everyone thought I would quickly jump on we just had this statement announcement come out from the FOMC and I wanted to share my ladders my trading screens to talk you through it So I'm looking at the NASDAQ 100 here and we have moved quite sharply higher on the back of these latest comments as they've come out So a couple of things they've not hiked rates There was a very very small outside chance that they might have done So if they were really panicked about inflation and they thought that the employment situation was really heading in the right direction Sooner rather than later. They've kind of gone halfway there And that's much more in keeping with market expectations And that is the fact that they've said that it will soon be appropriate to raise the federal funds rates soon And that's very much in keeping with what general consensus was was that gives the hint towards a march hike So the outside prospect of going immediately is not there They are hinting though that they will hike rates more in the future We're going forward now a couple of the other comments They said was the balance sheet shrinking to start after Rake hikes commence largely in keeping with what we were expecting they'll complete their monthly bond buying taper in early March Again as per the timelines. They said it will US economies continue to improve but pandemic is weighing on Activities so a slightly dovish comment there initially here in the Nasdaq. We've seen prices Jettison higher quite aggressively and a lot of that I think is down to the fact that markets were leaning in their positioning in a very hawkish manner Given what's been happening and creating this anxiety Over-yield since the beginning of this year and it's really pressured Stocks in general but in particular tech growth related names and hence the reason why a bit of a short-term initial knee jerk relief I would kind of classify it in terms of this initial move here that we've seen in the Nasdaq Just pivoting over and have a look at some of the other charts quickly. You can see here on the left That's the Nasdaq ladder here. So still firing off pretty rapid at the moment gold Bit of two-way price action there's nothing particularly here that has been surprising and so you've had two-way price action initially blip higher the fact that there wasn't an Initial overtly hawkish element within this and so we popped higher and then we've come back down again And we're pretty much where we were training prior to the announcement You can see respecting that relative range and that's largely what happened in the currency markets Initial blip hiring euro dollar on the back of dollar Weakness initially, but the dollar is re-strengthening now a touch and that is pressuring euro dollar a little bit So worth keeping an eye on that previous intraday low. We printed there down at 128 112 82 excuse me as far as t-notes are concerned. Yeah, it's starting to see a little bit of downside But very moderate you would say given what actually has occurred because in if anything This is just in keeping with what the Fed have been communicating through various Fed speeches from drone pound His colleagues towards a slight pivot towards becoming more aggressive with their rate-hiking cycle So yeah, we'll continue to stay tuned, but all fairly in line with what we were expecting Going into this event So one of the other quite interesting comments here was the committee expects to reducing the size of the Federal Reserve's balance sheet Will commence after the process of increasing the target range for the federal funds rate has begun The committee intends to reduce the Fed security holdings over time in a predictable manner Primarily by adjusting the amounts we invested a principal payments and so forth So yeah, it's it's what really that we were looking for which was this idea of them Kind of moving towards a more hawkish direction with policy It's just that markets were leaning quite far in that direction Almost over exacerbated by some of the market react or movement that we've seen both earlier this week and also last week That has seen lights of the Nasdaq of course and the S&P 500 move into official correction territory So I'd say really at the moment. Yeah, not surprising. I don't think to see equities Liking this and moving in a positive fashion And the rest of the other asset classes are relatively unchanged because it's really being the equity space That's been the focal point given the type of market speed that we've seen of this downward movement We've had of late I mean if I just pop this onto a 90-minute candlestick on the Nasdaq you can see really the direction of travel Here going all the way back to the 13th of the month This really was as the market has been well I say the 13th of the month look at where we were at the beginning of the year and look where we are at the moment so from a Percentage point of view if I just bring up my my currency tool here from where we were trading on the fourth of the year To where we were trading literally just the other day in fact on Monday. We're down about 17 and a quarter percent in the Nasdaq. So I think unsurprising You know if you follow our newsletter If you don't sign up amplify me.com forward slash Market hi for maker. It's exactly what we were talking about this idea of not that the Fed were going to come out and be Sensation or say anything untoward But because of the way the markets were priced There could have been potential for some upside in equities and that's what we're seeing just materialize at the moment short-term relief that there wasn't a step further that they've gone and then the other asset class is much Lessor reactive given that again, it's it's pretty much in line with what we were seeing or what the Fed was saying Okay, don't forget then that we're gonna have to press conference for Jerome Powell Just in a moment and of course everyone's going to be kind of looking to pressure him on more detail around this shrinkage of the balance sheet Timing what would be the composition and speed of that type of move that could be integral then to the second potential Kind of catalyst for a subsequent market move here. So looking after the press conference. I'll keep you updated Okay, just checking back in on the charts and the equity index futures now We've gone 13 minutes past the initial statement have already pulled back and that's pretty much Replicated across every asset class. So now I've got your dollar top left cable here in the Dow future on the right Everything's reverted back to nearly all asset classes are training back to point zero of where they were scratch from prior to the release So one could argue at least at this point still press conference pending that the Fed have done a relatively good job at keeping any Market impact contained They've really executed on what their forward guidance and communication going into there before the blackout period was suggesting and So yeah, we look to the press conference really for any added detail anything else But so far not too much of a great surprise, but still much to play for Again, I'll jump back on when the press conference gets underway Press conference still yet to start but I thought I'd quickly make a comment on an interesting tweet that I saw from a macro strategist and He was talking about or mentioning the idea the Senate panel yesterday announced there to hold a Third of February hearing on Raskin Cook and Jefferson and these are the new candidates potentially to fill the empty slots on the Fed and There's a very good chance that Bidens and these selections are fed doves so much more of the idea of pushing back against an acceleration of things like Shrinking the balance sheet and more faster rate rises. They could actually be in by the FMC meeting Obviously, this would need to go through lots of congressionary approval and things of that nature But the next March meeting is not until the 16th So there's a little bit of time to run there by the time of which is a really important meeting for the Fed Because of course, that's when their next summary of economic projections is out And so we get the new dot plot and other economic forecasting But also that's when they're going to lift rates for the first time and obviously by then we'd be looking for much More explicit information about then what they're going to do with the balance sheet thereafter Of course, there will be lots of communication in between those meetings But yeah an interesting observation to be aware of the Fed could be equipped with other Fed doves Which could move the conversation a little bit around This idea of balance sheet tightening Just back to the charts momentarily press conference will start any moment But as you can see from the charts broadly back to where they were resting before the release So xing out that gyration in price now, it's about waiting for the press conference to begin This really is part of the art of trying to navigate one of these major Intra-day kind of events is that it's very you've got to be very I guess disciplined in looking for opportunity And as you saw in those ladders when I first shared they were jumping all over the place So it's super important to really Strategize have your scenarios built in advance of time looking to identify then more of an outlying situation and Taking advantage of that materialized and what we saw really was not enough of a deviation away of what markets were expecting So although there was a momentary move It was so whipsaw and price action would have been very hard to execute over that If you were ever interested to know what does this actually look like on a Bloomberg terminal when the news breaks This is what it would look like as headlines So typically then they will drop a whole batch of comments But keep some major ones at the top and subsequently it's almost like a first in first out type Reactions, so let me just pivot my screen So these would be the Bloomberg headlines that dropped in the top three as you can see kind of here I like this what we call the stickies and so markets will react to those those first as we heard earlier Will be appropriate to raise rates soon as opposed to concluding early March actually shrinking to start after rate hikes commence Just thought I had to give a shout-out to the Fed website. This is the holding music waiting for the audio from the press conference to start so Feeling nice and peaceful now waiting for the main event to hit Should just be coming on now Okay, the way the press conference typically works is he Will reading open statement and then that you normally takes about 10 10 12 minutes And then they'll go into a Q&A the first questions in the Q&A are often the most Important than the ones that mark is the most sensitive to So keeping our wits about us now and we'll look at the charts and looking out for any comments on the balance sheet power now beginning Maximum employment and price stability Today in support of these goals the federal market Okay, I'll keep you posted if he says anything Okay, one thing that's quite interesting that he said here is the Omicron is expected to drop off rapidly And that should then have a subsequent impact in the economy to become kind of active again So that would be slightly leaning a hawk's direction However, he did balance that out was saying that it's still something that they're monitoring at this point in time Few more important points to add here He said the improvement in the labor market has been wide spread and also said inflation remains well above our long-run goal We are seeing the US tenure yields touch on their highest levels at the moment So high yields and starting to see a little bit of pressure coming in the equity index futures power also said higher inflation now Spread more broadly a lot of this is not new information But certainly is a slightly more on the hawkish side. So seeing a little bit reversal. This is the Dow future These are very small moves in reading in context But coming back down toward a near-term level support from this afternoon Which was the relative highs that we saw in the APAC sessions are keeping an eye there 34 257 in the Dow the Nasdaq's also reverted course from that initial Statement release so where we bliped higher. We're now trading a little bit back toward where we were Earlier again looking at the R1 in the futures and that low in the afternoon as an air of support on the downside So a little bit of a move lower t-notes as you can see in the bottom right hand corner. So yields and dollar An equities all moving a little bit lower So this would be indicative now of a little bit more of a hawkish takeaway from what we've he's just been saying here About the labor market about what's happening with Omicron and also the inflation situation So as yields move up Subsequent dollar strength is starting to weigh on some of these currency pairs a euro dollar You can see here now challenging that early afternoon low that we printed cable following suit again all driven by Strength in the dollar the Dixie now at session highs and the dollar index is now training up one third of 1% Okay, he's just concluding the opening statement And he said that they have not made decisions on the timing and pace of shrinking the balance sheet Most would probably take that as quite a dovish comment And the reason for that is that people were assuming that they'd already progressed so far enough that that could happen Very soon the fact that they're still yet to determine a lot of the parameters on the timing and pace Means then they're basically keeping their options open and and that has delayed then Aggressive pricing and expectations the market has had so you can see here immediately the dollar pulled back Euro dollar has sprung back up here quite aggressively. That's reflected in cable Nasdaq has also bounced exactly on that comment So in any of that initial weakness there as he was speaking as quickly reversed on that comment as the 10 year Still remaining lower, but that downward move on that push hiring yields has just stopped on the back of that latest comment So again pal said the Fed has yet to decide how and when the balance sheet will be reduced. That's a big comment Okay, as he takes questions, we are seeing continued fluctuation here Equity FX markets, but we are seeing yield still remain at their higher levels and Gold also worth just keeping an eye on here now as we just retest down around that initial volatility low that we printed If we break down here in gold, I'm just having a look here at next levels of interest So 1823 you can see here was the top that we saw Towards the back end of or middle and back end of last week any breakdown of there could trade quite quickly More heavy down to that spot of those brief highs We had back on the 18th and before the breakout up that we saw back on the 19th So as you can see here straight through 23, so to expect quite a quick run here as you're seeing down to 1820 Beyond that point probably I'll be keeping on 15 and then down towards the low that we saw back on the 18th So yeah continuation gold You can see it should be a synchronized move really if yields are moving consistently and we're seeing gold move lower You would be looking for further dollar appreciation and you are starting to see that a little bit now You're a dollar despite that quick bounce on the balance sheet comment. What power has said here is Doesn't rule out raising rates at every FMC meeting So just to reiterate powers just said he does not rule out Raising rates at every FMC meeting That's a bit of a bit of a shocker there in terms of on the hawkish side and that's what's instigating now This renewed move in yields. So yields you can see here. Teenage just flew off the charts there on that comment And that's that's quite a big one and that's gonna promote then weakness in gold and the dollar pairs as the dollars gonna really kick on from here Most likely so then as that can equities probably will not like that comment either So you can see FX now trading with a little bit more weight We've just broken through the intraday and yesterday's low as the Fed kind of Push off this idea that look we're gonna hike four times if they're gonna hike every meeting Of course that leaves lots of options further down the line for for subsequent meetings beyond just doing the fall And just for the record there are as you can see here is 8 FMC meetings in a given year The fact that we've already had this one we're anticipating the hike in March that leaves seven of course remaining meetings So when he made that comment comes in the context of Nearly every meeting could be live then and hence then this kind of hawkish reaction that we we've just seen Yeah, ever since that comment Everything started to really pick up a bit of pace here So the dollar index is now trading up at around 0.5% just bringing the Nasdaq and gold back in on the on the ladders to see some of the market volatility here coming through on the Tape you can see quite heavy selling pressure now starting to pick up a bit of momentum in the Nasdaq As it breaks through that previous low and the R1 on the futures So just looking to potentially open up a bit of a deeper move here down to that load that we printed Earlier in the morning when Europe came into the market really to hold that type of short-term short position would want to see gold and T-notes continuing to remain Kind of in terms of the yield play yields remain bid so a bit of more continuation of that to just give that greater conviction of that move So yeah, Nasdaq still trading a little heavy here you can see it's an under pressure Let's just keep it up on the screen for a moment And obviously it was that comment there that the power said about not raising not ruling out raising rates at every meeting It's kind of sparked this latest move And the the Nasdaq being the one to kind of watch over the major three US indices given the sensitivity to the yielding rate Environment particularly for those tech and growth names. Okay, we're still in the Q&A at the moment One of the guys from Royce is asking a question But a good take here that I've seen which I think is absolutely on point is the power has twice made the case for tightening faster than in the last Cycle i.e. That's more than every other meeting without Explicitly endorsing it. So this is the kind of nuanced nature of Fed Communication it's kind of hinting towards the faster tightening cycle without Indorsing it to the point you're committed to it So certainly has come as a bit of a surprise, but we'll continue to stay tuned Okay, so just want to really wrap things up the Q&A still ongoing But I think for the purpose of just kind of understanding really what a Fed announcement looks like this was a pretty good example So a lot of two-way price action and this initially it was almost like a relief So nasdaq as we saw equities moved higher dollar initially blip lower that was supportive of say Things like the currency pairs and also for gold futures now the predominant reason for that was because really of the markets overarching hawkish expectations about how it's positioned for the Fed they did come through they've they've not changed interest rates So there was a obviously a minor chance of that happening very unlikely that didn't happen But they've kind of hinted towards the necessary statement changes that they're going to hike rates and the press conference really does legitimize that idea that rates will rise in March as far as the balance sheet was concerned really lack of details if anything They've still yet to determine the kind of timing and how exactly they're going to do that They said that they're going to give more information at the appropriate time They're also going to discuss that in more detail at the next meeting But then the shocker kind of came towards the end was power did not rule out raising rates at every meeting and That does then include seven meetings now for the rest of this year and that was a little bit more of a surprise that had Continued the yield move that we were seeing so overall that probably left a part was the standout I would say everything else was largely in fitting with the Fed forward guidance communication going into the event So overall at least for now, we'll see what this looks like later on, but I've done this as it was happening Stocks are down yields are up and the dollar is firmer. So the currency pairs down Stocks down gold down t-notes down This is all from a policy perspective Towards then the Fed is serious about tackling inflation the labor market is there Omicron isn't providing the type of risks that now deteriorate from the economic activity in the future all things remaining equal They did say they'd be data dependent and so the risks are there that at the moment This is a staging meeting for the rate lift in March, but they could go further They haven't said that they will they haven't committed But that's on the table and that's why we've had what I would call a moderate hawkish reaction in the initial aftermath So again, don't forget to like and subscribe to the channel hugely appreciate it If you're new here more videos like this coming out soon. I did a really great Conversation with a very senior portfolio manager earlier today. I'm gonna share that tomorrow on the channel. So stay tuned. All right Take care