 Okay. Hi, Piers. I wanted to grab you because quite a meaningful day in markets is developing the euro dollar, which I know you've been calling for parity for quite some time, number of months, actually, I was trying to pin it down, but you've been in that camp and I've been reading all about this because all the other banks obviously caught your research note or your podcast because they're all calling for euro dollar parity and it's because euro dollars trading a 102 handle. So it's looking somewhat inevitable now. Big breakdown in price, we've got dollar strength across the board, equity markets are suffering as the Americans return to market, let me just share my screen and you get a bit of a sense of what it is that I'm looking at. The DAX underperforming in the global stock indices and we'll talk a little bit about the crisis they're facing their economy minister said today that Germany is facing in the energy market, it's Lehman Brothers moment. That comes after the energy giant universe being bailed out by the German government who are having to intervene. So of course we'll talk a little bit about energy prices. Oil WCI crude has also sunk as the Americans have come back into the market, and we're trading around a 103 handle having traded 108 when Europe came in this morning so significant move. Lots of calls of recession coming back onto the table city group out with a note calling for 45 bucks by the end of next year came a day after JP were talking $380 the day before so no rest for the wicked. Why am I back from paternity leave. The Americans are back from their long, long weekend so yeah wanted to get your thoughts and perhaps we could start with the euro. Yeah, I mean it definitely feels like, you know, today, or the fifth of July 2022 it does feel already a little bit like one of those days that you'll remember for the year. We'll see if it's one of those days you'll remember for the decade by the close but I don't think necessarily it'll be too much more of a monster blowout but look it's incredibly you got some major, major moves to multi decade lows in some of the kind of headline markets that has then fed into just general sentiment. So the euro dollar is obviously the king of the FX space, and has broken. Yeah, down below. This is the lowest we've been since 2002 isn't it and actually I started trading in October 2002. So we are right now, back to the precise euro dollar exchange rate that I had when I started trading 20 years ago. Is that a good anniversary or is that. I don't know how I feel about that but why certainly, obviously 20 years we haven't had this price point. And so it's quite it's very notable right and it's not going to stop here. Yeah we definitely I mean, I've been calling parity but I think it's down it's odds, it's nailed on here and it's broken the lows that we have back in 2015 2016 which was around 105. Once that's broken. It's now right we're going to test parity. And what's happening is, it's the same old story that we've been banging on about for months right in the, you've got a big certain with this FX pair specifically, you got a big what we call, well as a divergence, right between central bank and there's a divergence between the economies and how they're functioning and how they're dealing with post COVID there's a divergence when you think about the exposure to Russia Ukraine for example so, but just on the central bank thing that's been the Fed are hiking rapidly and will continue to do so the ECB always lag and they've said they're going to hike in September. For the first time in the Fed have been hiking since March and they July in fact they've been saying they're going to move the ECB right but not and oh sorry, apologies yes that's right so they're going to make a move in July right but the closer we get to July. Well, are they going to make a move, because I think people are starting to think it's already too late to start hiking, because now the narrative has moved on beyond the inflation crisis. Yeah, and the impact of course of inflation, like consumer readings that we're getting from a confidence perspective we had the European syntax and economic index out, and that showed investor morale in the Eurozone is that basically it's lowest level since right in the depth of the COVID initial crisis of lockdown and obviously the context being 8.6% in June record inflation in Eurozone as you said. And I think people are now looking at now focused investors that is squarely on the economic damage that a this, well in Europe, the economic damage this inflation spike is going to have and it's going to create a recession and the recession is coming and it's, you know the expectations on the timing of that are getting closer and closer and closer. And so it's like well look the central bank. I mean worst case, well, best case, the central bank can't hike, and we have a recession, and then inflation drops because of the dampening of demand that comes with the recession. And now best case scenario, worst middle ground is like, actually the central bank do have to hike, because inflation stays high. That just makes the recession worse, worse, worse, worse case, you get a JP Morgan scenario where there's a full blown monster energy crisis oil goes to the moon, and obviously just creates exacerbates the whole thing I think we're back to the euro dollar specifically. The Fed are hiking they're already hiking they've hikes three times and each time it's getting a larger hike 25 basis points 50 basis points 75 basis points, and they're going to hike again. And that's been driving dollar strength, and the dollar is strengthening against other currencies particularly where there's uncertainty whether their central banks are going to be able to hike at all. And the dollar is strengthened against the euro it's even strengthened even more against the yen. And these are at multi decade levels it's strengthening against the pan the pans down through the one 19 handle that's broken the Brexit low. It's a very brief blip down to 115 that happened off COVID. But otherwise, we're a 40 year low for sterling against the dollar so the dollar is super strong against everything because the Fed super hawkish, the US are less exposed to the Russia Ukraine situation their economies more resilient is recovered better. And the dollar is king. So do you think a trigger point to some extent is the fact that these things do do often tend to happen as well when there's a bank holiday and you get this return to markets but in the interim period, particularly over the weekend there was g seven discussions about a Russian price cap. And I think you and I have talked about this before. It's not that I think that that is even an avenue that they can go down and actually execute on because the retaliation effect would be so severe on the lights of say Germany, highly dependent of course in the engine room with the eurozone on that gas flow, but just the idea of perhaps a little bit of repricing of the associated risk of supply disruption has the market become distracted by the top level headline inflation figure. And kind of everyone was talking about peak peak Russian Ukraine, but this really is not quite over it. Right. Yeah, I think it's always hard to pin it right on a very specific thing I think it's a collection of all of these things together I think you're right, having a holiday weekend, chilling out and then you're back and it's the new it's the second half of the year. I do think the rally in stocks. What was it the week beginning the 20th of June was again a bit of a kind of tangent distraction stocks went up because a quarter and rebalancing more than anything else and I think that, again that probably got misinterpreted as maybe we're at the same level, but we're not. And, you know, I think these big moves on the FX space has now made people realize why we're at multi decade levels here and then people start looking around this feeds into other markets oil down over 5% today that's off demand side risk now as we look ahead, a possible recession, even a massive sell off in oil today and that's down yeah back to kind of looking to test that mid June lows so yeah it's just sentiment it's contagious it kind of starts in one place like a headline euro dollar move breaking to a couple of decade lows and then that just feeds through to other assets. And then all of a sudden, you've got this big move and then it's a bandwagon right everyone's jumping on and reacting people are selling now just because everyone else is selling. You know, it becomes quite behavioral. So it's definitely one of those days. And then within all of this city were out with a note which has been in circulation in the last kind of 48 hours, and they were talking about the fact that crude oil could collapse to 65 bucks by the end of the year. And in fact slumped to 45 bucks by the end of 2023 if demand crimping inflation hits as Bloomberg were kind of suggesting this morning now a couple things there. Well for one what's your initial feeling on that. My feeling is come on. If they're right, then we're all in trouble. There's my feeling in that the recession is going to be the worst case scenario. Right. Yeah, I mean this is one of the things I was talking about with our interns this morning was that the devils in the details whenever you read these bank reports because more often or not you're on the second hand, i.e via a financial news outlet rather than the actual banks direct distribution list. So you're seeing the full report you're seeing whatever it is that a news agency wants to spin. Yeah, and obviously we know they have agendas to generate clicks and so forth but to give you a bit of color, the outlook from city is based on the absence of any intervention by OPEC plus producers and that for me is where this argument ends. I can't see that ever happening I don't know why that would ever I can't think of a scenario where they wouldn't want to step in, at least verbally intervene to stop that from happening. And then actually when I think about the statement that if a demand crimping recession hits the actual macro view the house view of city is not a recession. So as sexy as it is, it's actually not even their base assumption so yeah for sure I think, look, you know this is a domino effect and a lot of those dominoes that need to fall in exactly the right place for this to materialize so is this possible. Yeah, it is possible, is it likely no I don't think it is likely. Yeah. So, agree. Just just a word to the wise of how to interpret that if you're a student you're not used to looking at that type of head that type of headlines. But look, that was it pierce I just wanted to jump on get a quick take from you I know I know you're busy so we'll leave it there. But yeah, feel free. If you're watching this on YouTube to like and subscribe to the channel super appreciate that, and I'll be back on my normal macro week ahead outlooks as of next week. Not for a short while but back in business so yeah thanks Pierce and see everyone next time.