 Good morning Thursday 18th of March. Hope you're doing well Just before I begin if you are watching this briefing delayed on our YouTube channel Don't forget to like and subscribe If you would like to see the private live session we did for the FMC last night with the team and myself then just leave a comment on the video and I'll be happy to share that on Saturday at the weekend because I think it was a really good Review of how to prepare and then with some of the guys how they're executing trades over a news driven event So as I said, if you like subscribe leave a comment I'll be happy to share that at the weekend if that's of interest But otherwise look let's get straight into it and talk about this morning and definitely it's a Kind of picking up the baton from where we left off. So generally speaking Equity index futures are still higher. We had a positive close on Wall Street across the three major indices And that reverberated then across then the global market Asia generally higher Perhaps the Aussie market touched lower despite very good jobs data there locally Dollar still weak and weakening at this point in terms of the actual Intra day session at the moment. It's down about one tenth of a percent But obviously got hammered yesterday on the back of the Fed So both major currency pairs euro dollar and cable continuing to move higher You're a dollar in close proximity now to retesting the initial aftermath high that we saw On the initial spike up on the Fed cable looking to reclaim 140 this coming Irrespective of vaccine delay information that we heard from the NHS yesterday, which we'll talk about in a moment Gold still elevated having broken out of that range really firm move there and up 23 bucks having just grinded it out as well adding to the US pop on the Fed in the Asia pack session And then in terms of yields rather to be static there So let's have a recap then of the Fed. What exactly did they do and what has promoted this type of movement? That I was just kind of talked through so from a very top level Getting everyone up to speed long story short The Fed done what we thought that they would do what we discussed here yesterday in the briefing kind of materialized and it was the idea then that people were really zoned in on the median dot plot for rates in 2023 now Here then what they basically said is that they stuck to their projections of near zero interest rates through not in 2023 and that was the key trigger really for the markets There were other things of course But that's what promoted that move given the outside bets that there was going to be a potential Bringing in nearer time frame for the first rate hike from the Fed, which did not materialize Our kind of view on this Is that ultimately this isn't going to track from the fact that yours are going to move higher in the foreseeable future in The months to come as the growth momentum picks up in the US to hit their targets And what they're looking for which is around six and a half percent gross coming in the period ahead The odds inevitably will grow up with that gross scenario However, the market taking heed from the relief then that there's no kind of signs at this point of early tightening And I don't think that was a surprise I think the markets were just kind of misaligned with what they were looking for and the reason for a lot of that I think was down to The summary of of projections and you'll you'll remember Two days ago or so I was talking about Goldman Sachs who put out a note And they were talking about the fact that they saw actually around 11 members or so Switching out to then bump the dot plot up, which would be this table here on the left-hand side and This is what the common the composition of the actual dot plot looked like in the actual Projections last night on the right-hand side and as you can see here only seven Nowhere near as many voting for that more optimistic view on the economy to subsequently lift rates And so I think markets You know Goldman's was really banging the drum on this I think people were getting a little bit overly excited as we were kind of forecasting here on the desk that The idea here that we think given recent communication from the Fed Not just power but everyone that they weren't going to shift things at this point in time And that's pretty much what he was echoing in the press conference that look We've always missed our inflation target. It's always under shot it. We haven't yet It's very early to make those judgment calls about what it's going to be like in the future Or be it they see it higher not wanting to pin down an actual figure as a threshold And I think that type of language means that there as he has said before many times that despite the kind of yuled tantrum Movement and focus that the markets had in recent weeks for the Fed They're just sticking to the plan at this point in time not being bullied by the markets And that's exactly, you know, the the stance that we we would expect power to take so All in all, I think it was more a little bit of a function of markets Positioning rather than a shock event so to speak But definitely things still remaining You know of a continuation of the trend for the moment going into the European open The Dixie has just as I was speaking now gone below the low that was seen post event last night So both major currency pairs on the front foot at the moment and definitely a dollar weakness story driving those Those dollar-based pairs for the time being so definitely will be a theme to account for In the session ahead. Here's what the actual projections look like and yeah for real GDP then they do see Real GDP they've upgraded it Marginally 0.2 for both 21 and 2022 unemployment revised down so positive there With the quicker the vaccination and the ability to reopen faster and then the core PCE numbers It was very marginal only point one increase on both 21 and 2022 Which probably also assisted some of that that move as well last night As I said then overnight in Asia it kind of followed through we've got the boj later We'll talk about that in a moment. There was some Aussie employment data. It was fantastic in fact, but really the Aussie Not reacting a great deal it being more driven by the weakening of the dollar and Aussie Like with other dollar-based pairs is rallying on the back of that In fact, the Aussie has just broken out just quickly flashing the Aussie into shot here You can see the Aussie dollars just broken out of the double top from the Asia pack session as Europe comes in and hits the dollar again And a breakthrough the R1 in the future. So fresh session highs here for the Aussie But I guess Underpinning that as well helping the kind of divergence their short term being the good jobs data But not much in the way of reaction to the actual numbers on their release The other thing I wanted to talk about was was this and you know One thing to be quite clear up front is the pounds rallying at the moment on the back of dollar weakness And if anything the actual pounds outperforming Euro on that basis. So this news I think is is not really being impactful for Market sentiment on the UK on the road map or its general delivery Perhaps the fact that the UK's got out in front with the speed of its vaccinations gives it a bit of wiggle room And if you remember when the UK issued their vaccination roadmap program a couple of weeks ago The fact of the matter was that they were going to hit their targets well ahead of the actual Fourth final step of reopening on 21st of June But they actually give have given themselves a degree of wiggle room for exactly the issue of what we're seeing and confronted with now And so getting you up to speed the UK's vaccination programs It's potentially being thrown a little bit off course as the NHS yesterday ward of a significant delay And a reduction in supplies of jabs in order to freeze on new vaccination appointments in the month of April NHS staff were told that volumes for first doses will be significantly constrained And the start of inoculations for the under 50s would be delayed the BBC have reported It's understood the AstraZeneca vaccine supply issue Relates to a consignment from a manufacturer in India a half of orders being delayed by four weeks. So yesterday You know, this is kind of the state of where we're at at the moment politicians that can to protect themselves Across the pond in the mainland you're trying to point the finger Astra's trying to protect itself. I mean it's quite it's quite Uninspiring to see given the fact that we're facing a humanitarian crisis to be quite frank, but that side You know yesterday you had UK government politicians pointing the finger at astra saying it's you know It's there in a similar vein to Europe It's their fault for not meeting the criteria of part of the supply agreement Astra said that there's nothing wrong at the moment with the supply chain or their delivery schedule And then it transpires that you know, they're exactly right, you know, it isn't it's just to do with An issue which is always going to be that case given the fact that these drugs are manufactured all over the world and manufacturing distribution logistical issues are going to happen a Large part and this is a good point that was made by Mike in our community on Amplify live He said the large part of the big ramp up in UK vaccine supply was made up of an acquisition of 10 million doses of Astra vaccine from the India contract manufacturer serum. So in fact, it's around 10 million It's pretty sizable coming out of that plant facility in India So the point being here is half of that order is delayed as the BBC have suggested And that's leading to a slowdown of vaccinations Putting the UK government in a perhaps a slightly tricky situation And the reason for that is that it has to cover its basis on second shots Remember UK government came out with that report a few months back saying that there's a perfect kind of 12 week Window to administer the second shot after the first and those people are coming due now given those high-risk categories that we're taking care of first and There's also probably going to be pressure To preserve the Pfizer Jabs and the reason for that of course is that a lot of those are manufactured in mainland Europe And at the moment Europe are not playing ball and making some quite threatening noises via the EU Commission president Vondellion yesterday just to kind of go over that and Vondellion said the block could activate article 192 so 122 of the EU treaty which allows it to take emergency measures to control the distribution of essential goods if severe difficulties arise in securing supplies So basically just saying what we're going to use you EU law and part of the justification is that is that the UK so far ahead And the vaccinations and most of the exports of European vaccines are going to the UK, right? You get the cut and So they're almost weaponizing that situation again. I think a lot of that is political I don't think it's perhaps going to get quite to that point and that drastic But you can see then the precarious nature that the UK is in Because there's only so many different drugs out there And if Astra delay is is is meaningful and leading to just Astra alone Which we're heavily geared to one as a composition in our rollout of vaccines in the UK gets delayed by a sizable amount They're having to take that action about Freezing new vaccination appointments in April while they take care of second shots being administered You've then got the risk of Europe halting the Pfizer distribution and Moderna who's due to supply a few hundred thousand Doses in the first delivery next month If the EU puts in place stricter export controls that could also be heard and the problem with Moderna Of course, but we've known from the start. We're talking a few hundred thousand with Astra in India We're talking 10 million Moderna has real difficulties in Producing mass amounts given that it doesn't have the type of infrastructure that some of these bigger pharmaceutical companies have All the meanwhile over our friends across the pond More positive Joe Biden the president is basically poised to meet his goal of a hundred million vaccinations in the first hundred days He's gonna hit it on day 58. It's looking at so nearly half The amount of time he's scheduled to speak publicly actually Later today, it's going to be this evening in London time about the vaccinations and he actually Could well be in his right to double this target to 200 million in the first hundred days and I just think the notion of Under promising and over delivering is a fine thing in 2021 when it comes to politicians globally It's a rarity. And so he really has Stepped this up and in fact the pace of Vaccinations in the US is at two and a half million per day And this is what that looks like in terms of the pace over January 1st It's current date of March 18th, and it's anticipated to get faster Hence the reason why they can be very ambitious with those targets. So yeah, definitely Tying this back in this is a key component, of course for the Fed Now what the Fed are going to do because the economy is going to heat up Even though the Fed are kind of holding off and being still ultra accommodative for now That time will come and that communications challenge will need to be met At some point and that some point is coming relatively soon Probably going into May and then June FOMC meeting where we get the latest dot plots That's going to be then very telling because at that point They're probably going to want to give themselves at least a three to four month Running of communication subtlety changes To then give the discussion about tapering before then tapering commences perhaps towards q4 of this year So This is a key component to that the vaccination story the faster it happens The more pressure there is then for the Fed to ultimately make a change at some point because the economy is going to pick up At this a greater speed of reopening And then in creating demand inflation and so on So that hopefully gives you a bit of context, but importantly as I started that conversation the pound Isn't too fast for those those reasons I mentioned Otherwise bank decisions we've got the bank of england coming up now the bank of england I would say is probably the most boring of the Fed the boj and the boe So of the trio is probably the least inspiring for an intraday trader for price movement Not expecting any change in interest rates and their asset purchase facility. So they're QE program They're not going to follow the lead if you like of what we heard from the ECB last week If anything, I actually think that given the ECB's commitment to significantly increase their pace of purchases within their PEP Program and also what the Fed have been doing with being resistant to commenting on this kind of movement hiring yields And getting the market kind of back into line with things with Fed thinking actually think the bank of england of course a bit of a break here and Coming kind of after those banks comes with a little bit of upside that they've made their moves and the market's so kind of globally synchronized that They've already covered the basis if you like and and the bank of england could just sit back and And just put it in cruise control for now. I think that no need to rock the boat. So Language is key here. I think for the bank of england as they said here in bloomberg tone And guidance are key in the decision to make no change So just looking out for some of the surrounding commentary around it, but not expecting a great deal The boj on the other hand a little bit more interesting And that's because they've just got a they've got this policy review that they've been working on And they're due to make some potential tweaks To the variety of tools in which that they use The bank according to a Reuters survey will scrap either or both of the numerical guidelines set for its purchases of ETFs To make its stimulus program basically more sustainable. So this is about doing more increasing flexibility here in a similar vein to a more damaged stance The boj currently sets two guidelines for its ETF buying Which is to buy an annual pace of roughly six trillion yen, but up to 12 trillion Critics argue numerical guidelines prevent the boj from buying ETFs in a flexible format Such as slowing purchases significantly when stock prices are booming So just having a little bit more agility to react to market conditions The central bank secondly the other big thing to look out for is expected to slightly widen an implicit band At which it allows long-term interest rates to move around its euro percent target according to the Nikkei press overnight And that's one that's that that's been talked about quite a lot as well. So that kind of your curve control flexibility But we'll have the answers to this obviously this is coming out overnight If you're looking at london time, so I'll talk about this more tomorrow morning when we have more details Otherwise for the calendar today Very quiet in the uk european morning boe then at 12 o'clock No press conference this time around from them Next one of that's not due till may You've then got the weekly jobless claims coming out of the states expected at 700,000. Remember they printed at 712 last week So we are looking for a further improvement here the number to go lower And that comes in the context of 712 last week being the lovest reading we've had since the first week of november So it wasn't particularly strong figure then And looking for these improvements Filly fed business index coming out at the same time So remember 12 30 rather than the regular 130 with the clock change in the us And that's pretty much it on the data side speakers though christine legard speaks twice today At eight and at 11 but speaking of parliamentary hearing introduce true marks first and in a Women rights event second Equally bank giving man's cum lift is speaking 11 with chief economist of the boe Howl dane speaking at 12 30 again both off topic talking about payment systems and annual Women in banking event for howl dane. So of all of these Speeches these aren't meaningful people talking But also layering the context of the boe Rate decision happening those boe guys they're not going to say anything specific on economy or policy I would think and I don't think we're going to get much out of the guard given the fact that we heard the official communication from the meeting last week All right, that is it going to leave it there as I said quite a lot To go over there So hopefully it all made sense any questions at all just feel free to leave a comment if you're watching this on youtube Don't forget to hit the subscribe button as well We really appreciate you being a part of our community and for the rest of the guys that find life I'll see you in the discord room. All right. Have a good day