 Okay, hello and welcome back to another rundown for the week ahead in markets going to talk a little bit about China a surprise interest rate cut from the PBOC in the overnight session it comes after a slew of Economic data showed continued slowdown in their economy We're also going to talk a little bit about the data points coming out this week A lot of focus on the lights of UK CPI. We've also got US retail sales coming We've got things like hedge fund 13th filings. We've got the brick-and-mortar High Street retailers like Walmart Home Depot Target as well coming out later this week and a potential meeting between President Xi of China going to Saudi Arabia for the first time really since the onerous lockdowns that have been observed in China so plenty to talk about and one of the first things I wanted to do before I jump on to China was talk about the charts this morning and One of the interesting things of course has been US equities, which I'm looking at the S&P 500 Chart here and a continued recovery and in fact quite an important technical close at the end of last week because on the weekly Charts we were closing above looking at a daily here We closed above the 50% retracement from the peak of price We had right at the beginning of the year to the bottom of the trough on the sell-off Only a few weeks ago around a month ago in fact and having bounced so aggressively Lot of statisticians looking at previous historical precedents and anytime we've Recovered more than 50% it has shown since the Second World War that although we might retest It's unlikely we would break it back below that lowest point of the year to date now Jewries out there's obviously a growing consensus of bears on the street However, this market continues to go up obviously last week further fueled by a bit of a recalibration of fed rate hike Speed given the fact that we had the weaker CPI and the foots come off the pedal a little bit on 75 Tilted back to 50 basis point rate hike on the upside though here Definitely a couple of areas of technical relevance to keep an eye on throughout the week the 4300 level Which not just psychologically? But was the peak of some of the price action that we had going towards late April early May any break above that I'll probably be looking at that trend line from the peak that we had at the beginning of the year and Where we were trading at the end of March if we were to start to break above those price areas So it would come in at around 43 43 type area So yeah equity watch continues otherwise elsewhere this morning kicking things off the dollar a little bit firmer Interestingly the actual US dollar index has reversed pretty much all of the losses that were seen on that CPI report. So Converging back to kind of normal trends euro dollar lover latest Bloomberg Economist survey out this morning on on Eurozone talking about the fact that the economy's like to move into recession absolutely no surprises there at all We'll talk about what's going on in Germany as well Latest weather impact is having on their maritime shipping routes Which is just making things from bad to worse and then the British pound has reversed Any of that acceleration it saw the middle of last week training back sub a 121 handle Head of a lot of economic data this week a lot of political uncertainty still on the table Of course and also this idea of how much more violent inflation is going to be here Than what we're like so what we're seeing with the slight easing we've had in America but look let's jump into it and let's talk about China to just get things going and This is a look at the economic slowdown has deepened basically in the month of July the worsening property slump continued very onerous coronavirus lockdowns of that zero tolerance policy, of course that China has Retail sales you can see here in the blue And you've also got industrial output investment all slowed and all missed and less expectations for the month of July And what this essentially led to is quite a surprise announcement, which is the Chinese central bank cut both the one year and the seven Day lending rates by ten basis points What do economists generally have said about this in the overnight session is that it's probably going to have little impact Overall because of the fact that covert controls have made households and businesses quite reluctant to borrow But we continue to be quite vigilant on the situation in China and of course a lot of pressure of For the political optics because of Xi and the big-party Congress that's happening towards the back end of the year One interesting stat was youth unemployment in China actually rose to record just shy of 20% So it's piling on more pressure on Xi Jinping's administration to kind of reinvigorate reinvigorate the economy Head of this kind of key political period, of course Otherwise just given the the kind of more bearish Description there of China obviously that's kind of fueling the flames of people's just General perception of global demand as we go into this more global level slowdown It's kind of coming on the back of the quite aggressive tightening We've seen in much of the other developed world economies and so oil continues to track lower in fact WTI crew looking at it this morning It's just slipped back below 90 bucks a barrel. The other thing that some people are looking at Is that from China's perspective apparent oil demand? Last month was about 10% lower year on year Gives you a bit of an idea for context of the the economic slowdown that it's emerging But also separately a spokesperson for the Iranian foreign ministry has said that the basis exists for signing an agreement in a very Near future adding considerable Progress has been made in the last round of talks is of all of course in regards to their nuclear pact And if that was to go through whether or not we'd see a fresh batch of Iranian supply come on the market Although this is probably playing into some of the downward trend. I would say in crude oil We've been here about 15 times before of course and a deal hasn't been cut in the end So I'd just be aware of a little bit of a two-way price action on the Iranian side alone But overall of course the kind of looming recession globally Is what's been dampening the just general demand for oil and we can see that as being the case over the last several weeks Having seen the most recent peak at around late May early June. We've continued to just track lower in recent weeks All right, a couple of other things then starting off with the calendar and really want to focus on the UK So you'll see here in the UK. You've got UK jobs data earnings numbers coming out on Tuesday You've got the CPI on the Wednesday And you also get the UK retail sales report on Friday as well I'm gonna just focus on the the CPI reading as the one that will garner a lot of attention It's expected to hit 9.8% And of course, that's a remarkably high figure And one of which the market no doubt is still quite sensitive to however the direction of travel is quite well known And of course if you start looking at the general trajectory Changes we've had from the Bank of England's forward guidance They've now guided us to the fact that really come October, which is when we're going to get the next Kind of batch if you like of off-gem price cap coming into effect Then we're going to see inflation reach the lofty heights of 13.3 percent Which is obviously much higher than what we're expecting of this week. So I Don't think it becomes a particular surprise but again at the moment it's turning the screw on the pains of the UK economy and although Traditionally obviously surging inflation would likely result in more aggressive policy tightening and therefore currency appreciation As we've seen before people are more Factoring in then the impact this is going to have for the deep and long Duration of the looming recession in the UK as to therefore the more negative dynamics for the sterling currency Flipping over to the US on the calendar this week. We do get on Wednesday US retail sales a lot he shows sales called from the prior month Even after accounting for an expected fuel price related decline in receipts at gasoline stations The medium forecast calls for a point one percent increase in the total value of retail sales after a 1% gain you can see we had a month earlier elsewhere in the US We've got housing starts Previously owned home sales industrial production all for July also scheduled on the docket for this week And the other thing of course is the FMC minutes and as per usual Traders will be scrutinizing this very closely to see if there's any hints at all as to the depth of discussion And just more broadly the appetite to go 75 of course for a third time This is looking at where the short end is currently priced So the odds of 75 have obviously fallen after that softening in CPI metric We're now at around a 45% probability So leaning on the side of 50 basis points is the markets view at this point in time Other things then I've got on the radar from a eurozone perspective We do get Germany's ZEW indicator and that's coming out that sentiment figure on Tuesday it's likely to show then just the continuation of Just the worsening of the economic kind of view that's happening in Germany in the broader eurozone at this point in time In particular what we're looking at here is obviously a map of Germany and the reason why that's particularly important is because problems are being compounded at the moment by current weather conditions and a stretch of the Rhine, which is the river here. You can see That connects basically barges Can only sail from partial loads of coal and that's this is coming out of Rotterdam all the way from the Netherlands down through Germany and into the kind of land with border with France and into Switzerland and The reason why this is particularly key is that then because of the extreme heat a lack of depth of water for maritime passage of goods has meant that that's threatening output at power plants in an already very Stretch situation in Germany as we know the various different government actions that have been taken to try and use most efficiently the energy that they do have with the risk of course still ever present about Russian supply of gas So yeah at the moment, it's not looking good And hence the reason why as I said earlier the Bloomberg's economist survey There continues to be the expectation of a recession in bound for the eurozone Otherwise other things are looking out for moving a little bit further far east in Australia jobless data for Thursday Could spur further bets for rate hikes if they show more tightness in the labor market You can see here quite disconnect in fact at the moment consumer sentiment plummeting on Australia But business conditions still continuing to excel at this point in time So we'll keep an eye on that jobs data on Thursday Otherwise within the region in Japan a little bit of focus there You've got GDP data for Q2 set to show the world's third largest economy is back to a pre-pandemic size Later in the week we get trade data. We will get reading on global demand While Japanese inflation numbers will likely show another acceleration final one to mention in the region is New Zealand. They do have an interest rate decision and Expectations are for another half a point increase from the RBNZ Some of the other things that I mentioned briefly I'm looking out for the hedge funds 13f filings are out later on today Always gives you quite an interesting insight as to any portfolio changes that have happened I think I saw something on Soros this morning He's taken a bit of a stake small all beer in Tesla But also getting into some of the big tech names like Amazon we heard last week about Warren Buffett's kind of jumbo dividend He got on his humongous Apple steak. Yeah So you're interested to see if any any switches up there on the hedge fund side You've then got this is earnings and in particular really earning seasons at the tail ends And that means we get the brick and mortar retailers Walmart Coming on Tuesday You've then got target on Wednesday and Coles on Thursday And then the other thing just to keep an eye on is G is to arrive apparently according to reports in the Guardian and CNBC at the weekend in Saudi Arabia to meet with the crown prince Mohammed bin Salman as you can see here I'll be the Chinese premier's first official foreign visit since 2020 as Beijing and we had a seat to consolidate their ties and of course This is very interesting politically because it comes just after US president Joe Biden himself has been in Saudi Arabia So a lot of people talking about this is kind of jostling for International kind of power Russia has recently overtaken Saudi Arabia Of course as China's biggest oil supply and supplier China's been taking advantage Essentially of cheaper crew from Russia as sanctions have forced Moscow to sell steep discounts to customers outside of Europe And obviously Mohammed bin Salman wants a little slice of that pie I'm sure and it comes after you saw at the weekend Saudi Aramco came out with their earnings and they posted a 90 90 90 percent increase in their Q2 profits not surprising other all majors have done similar But it's a second straight quarterly record They beat on most metrics as you can imagine came out of the weekend So that's it from me and for the week ahead any questions at all Feel free to leave me a comment or follow me on on Twitter or LinkedIn more than happy to connect and have a great week ahead