 Okay, very good morning to you. It is Thursday 22nd of July and ECB day And so we're going to talk over this crib sheet here in a little bit more detail in this briefing What to expect and how markets might react to the latest comments out of Christine Lagarde and her governing council I'm also going to talk about Powell's prospect of being reappointed as Fed chair and what the White House advisors have to say at the moment about their Feelings of reappointing him. We're also going to talk about Elon Musk doing the flip-flop again on his stance on Bitcoin With the digital currency rising in yesterday's session Then we're also going to talk a little bit about the relationship between the US and China on trade specifically by the numbers and What I think is quite interesting from a political point of view and for the kind of optics on the Foreign affairs situation there and then we've got a couple of other data points weekly jobless Got some housing data out of the states this afternoon We've also got some more corporate earnings, of course coming out as well pre and post market today So first things first, let's start with the usual look around the markets from a sentiment perspective and starting chronologically We finished on Wall Street with gains of around 0.8% Across the major three indices pretty uniform finish in fact on Wall Street But I'm just quickly again looking at these major charts like the S&P 500 future full reverse All then from the negativity that developed at the beginning of the week and pretty much the entirety of that whole set Off has been taken back yesterday quite a nice respect of a trend line from the double top all-time high From Friday's session high and you can see initially resistance and then using that trend line as a nice Springboard for then a push-up coming into that that kind of somewhat infamous Half-an-hour ramp that we tend to get into the closing bell on Wall Street and then overnight in Asia Super quiet and we've just kind of gone sideways and likely to remain the case really until the US start to come in Or unless Christina guard says something meaningful that really moves European equity markets and then sympathy might move US futures But really looking for the US session to dictate things there So again equity markets recovering the kind of shape of the NASDAQ is pretty similar From a technical perspective in the NASDAQ 100 future Just looking on the upside some short-term resistance here looking on the 30-minute chart You can see from this marked-up rectangle from the previous Price points for the beginning of last week and then that peak that we saw on Friday's session before the material decline of US equities overall and then the COVID kind of panic that we had on Monday and looking at where we are at the Moment we've recovered pretty much to that Friday peak and so short-term you can see in the Asia pack session that upward movement seen into the final The breakout above then some of that range high that we're seeing early in the week through that final half an hour ramp on Wall Street Has just faded a little bit from the Asia pack high And then elsewhere a quick look at the currency markets pretty quiet overall for the Dixie this morning relatively flat, but certainly a little bit different from my thoughts initially that I thought there was a bit more room to run for The dollar strength and certainly yesterday was the opposite of that We saw quite a distinct pullback in the dollar and that certainly helped Give some reprieve to the major currency pairs and cable for sure being one of those and this morning from a technical perspective cable Up marginally both major pairs up in equal amount Ten pips each and euro dollar in cable But just getting above a short-term area or having a look at it at the moment in the futures of 13725 resistance which was the late US session high and also the high we printed in the afternoon back on Monday Before we saw some of that extension of the sterling gains that were seen at the time So I've signed in cable You've got the R1 which encapsulates some of the support and resistance levels around 137 62 if that directional Trend is to continue any further nothing particularly new in UK fundamentals. So definitely much more kind of dollar dynamics and Technically driven I would say if a euro pretty quiet as you'd expect We're kind of just fleshing out a bit of a range here at the moment as we await the major event Which of course will be Christine the garden ECB statement remember two-part event 1245 and then 130 for the for the presser Elsewhere in terms of commodities WTI crude Similar fashion and really goes to show then that it's really is a kind of top-level Macro theme market at the moment derived a lot from sentiment based on the COVID situation But seemingly a lot of calm has been restored after the Monday kind of shaped down in in various different assets And nothing really new has happened from the COVID front You know, that's what's so interesting about the behavior of markets, particularly with the light Economic calendar like we've had particularly on Monday in the beginning of the week Tends to bring then further emphasis to those developments on the Delta variant Nothing's really changed there and yet look markets have recovered in equities and in the oil market Which I think is is quite telling for the time being but here again the trend line just looking back to Friday What we had was the peak Yesterday before Europe will just ran when Europe was exiting the market the Asia pack high And we're right testing that trend line again at the European entrance then for today So just keeping an eye there at the moment any further run-up on that price Probably be I am the seventy one dollar handle psychologically, which was as well technically support resistance through this period of Last week's price activity all of the tree numbers sure in an aftermath. We did move a little higher yesterday And we've got the kind of OPEC deal that's now gone through again, none of these I think are particularly Directly important for price right now and definitely I'm still putting greater weight on the demand implications tied to people's sentiment around the COVID developments at the moment and the subsequent impacts that can have on economic activity if new restrictions are implemented in kind of strategically important economic areas But let's get straight to it. Let's talk about the ECB then and let's talk about some of the headlines to go through and so starting off with the ECB and One of the things I wanted to cover first was the fact that this is this has gone from a pretty much a non-event Actually something a little bit more meaningful and the and the reason for that is we've just had recently the ECB strategic review And so now that that's ended people are looking for a new kind of shift in some of the language around the important components that would be That would constitute their forward guidance And so with the ECB shifting the inflation target from below but close to two percent To now two percent with a commitment to symmetry with the new strategy could be interpreted as either a formalization of what has been doing over the last few years anyway or a step towards more Dubbishness so essentially allowing kind of like the Fed have done with a it for inflation to temporarily run a little bit hot And so yeah, definitely it's going to be interesting to see how she manages this Christine Lagarde and the type of language She has often said she wants to simplify The kind of language that's used to make it more appealing and more understandable to a broader audience But generally markets don't like change and change brings uncertainty and uncertainty brings Kind of risks surrounding potential volatility on its release. So hence the reason why today's quite interesting This of course is going to be the first press conference since those changes have happened And so what are we to expect? Well the crib sheet for my and G is always super useful Where it constructs then the kind of 4 key elements of policy on the inflation growth outlook on the Left and then the interest rate the actual policy tools and any commentary expected on the exchange rate Which I'd say is much lower a case in this current point in time And then we're going from top to bottom very dovish to very hawkish And then the subsequent impact that I can have on the euro dollar given those circumstances their base case again Probably the most agreeable. I would say is that on the inflation outlook recent data suggests a return to two Low core inflation in 2022 so again This idea about the transit tree measures She will likely be asked about again at this point in time Just given what's happening globally at the moment on the inflation side on growth recovery will gain momentum over the summer But high uncertainties so kind of optimism just overlaid with a degree of caution And then from the policy point of view, which is probably the most interesting ING reckon there'll be no change again. I think one of the important things here I did see a good sound bite from a market commentator who said that this July decision from the ECB. It's not About changing so much language and guidance Also, it is about changing language and guidance to fit with the new strategic review But any outright policy shifts are very unlikely and so There's tougher and more contentious discussions around starting to withdraw support But the likelihood is is that's too soon right now particularly with the Delta variant that we're seeing in mainland Europe And that's likely to come after the summer break So at the moment, it's it really is just about the nuance around the change in language and guidance to match that recent strategy Review more than anything So I think that's the way I'd be looking at it Most people in summary are kind of talking about a hawkish tilt given the change and those are therefore subsequently There could be downside risk for euro dollar, but the more that that gets talked about The more I think the expectations are going to be high that that needs to materialize And if it doesn't you could see quite a meaningful upside response The one thing is the euro hasn't really been moving a great deal going into this And so there isn't too much of a degree of kind of pre-positioning of people I would say from a positioning point of view looking for a real Doverish outcome today albeit most analysts are erring on that side on balance So something to just be be aware of all right in terms of other things I want to quickly just run through drone power Enjoy his broad support for his re-nomination among top white house advisors Though the the decision in itself is not expected till later this year He hasn't and hasn't yet been put forward to president Joe Biden But that's the latest update that he is seen as the most favored candidate according to people familiar with the matter Experts and outside analysts say that if Biden is looking to change leadership then the current Governor Leo Brainard is the likely candidate to take that position Elsewhere in addition to power round or qualed term as the vice chair for supervision Obviously important for regulation in the u.s His term will expire in october and the board term for governor Richard Clarita expires in january as well So quite a few senior mainstay people on the board as well as the chair and himself Coming up for potential re-nominated re-nomination So definitely worth being aware of that. Is it important for today and right now for a trading strategy? No, what's my view on the chances of power gain re-empointed? I'd say very high and the market will will generally not see a big response to that but like it in the form of Continuity in that respect Elsewhere just wanted a quick word on us and china I just thought it's an interesting article not that again that I think it constitutes a real market move as far as this morning is concerned But reports on bloomberg were suggesting that china and the u.s is shipping goods to each other at the briskest pace in years Making the world's largest bilateral trade relationship. Look as if it was Look as if the protracted trade war and pandemic never happened So what's been happening is china is purchasing millions of tons of u.s farm goods for this year and next And stuck at home u.s consumers still shopping and importing in record amounts Which means then the trade between the two nations is kind of better than ever as far as Recent times are concerned and although china obviously signed an agreement during the trump era to adhere to buying large Quantities of u.s farm goods in order to stop then any further elevation infriction between the two nations The fact is is that despite then a lot of the sheer political risk that we keep reading about between tensions between individuals getting sanctions tech stocks The military in the east china sea and taiwan and so on and so forth the sanctions because of the way of which Weaken muslims are being treated in western china to hong kong and their diplomacy It's funny how in actuality under the bonnet There is still pretty healthy trade happening between the two nations And I think it really goes some way to show then how important the optics are For domestic politics on both sides to manage that relationship in the public eye, but in reality I think that It goes some way to show that a real true Destabilization of the relationship between these two nations is highly unlikely In my opinion. So again, this is all for me It carries very big tail risk, of course, given how important these two economic nations are But for me the breakdown completely to severtize in a way that would really impede trade importantly I think is highly unlikely And so as much as this kind of tit-for-tat word kind of sparring is going on geopolitically at the moment I would expect that to continue to be quite frank because we've got the midterms happening in the year's time or so And I think both will want to have a pretty firm stance at that point And the u.s. Probably will be the aggressor in the commentary and then china will just respond in kind at that point So yeah, all in all, I think it just says a lot about what you read about and you hear about to what actually is happening Which is a fairly healthy situation between the two nations despite the apparent fallout that's happening on the top level And then bitcoin You know, everyone was kind of hating on the crypto space earlier in the week because things were selling off quite heavy But things have rallied pretty decent amount the last 24 hours bitcoin futures reclaiming a 32 000 handle this morning And yesterday, I think there's been a couple of comments Kathy Kathy woods has been talking it up again Anilo musk has come out and basically disclosed for the first time that his private rocket company space x holds bitcoin And that texler could well most likely resume accepting payment for its electronic cars So he's done Again another kind of about turn on that on that space And he was talking on a panel with jack dorsi of twitter as well as the arc chief kathy wood yesterday And then as far as the calendar is concerned for today it's pretty quiet overall this morning and We've got weekly jobless claims happening at 130 Expectations are for another slight decrease down to 350 from 360 000 US existing home sales due at three o'clock and a 257 and two-year floating rate note announcement of the US treasury Happening at 4 p.m. And if we're earning this perspective Let me just quickly Bring this up and from an earnings perspective. There are a couple of we're looking out for so in the european morning today You've got abb Roche unilever are some of the bigger names from the stateside Pre-market you've got at&t It's probably one of the most notable names And then you've also got aftermarket intel snap twitter And a few others to look out for as well. So Not so much index moving but single stock relevant for sure I'm likely to see fluctuations in in the pre and post market trade for these particular individual equities So far though earnings have been generally quite good. I mean, that's what a lot of people are pinning on the Equity that supported the equity recovery yesterday respective of the kovid growing concerns on the delta variant Strong earnings yesterday helped generally lift sentiment if you remember kukakola Raised its four-year sales and profit forecasts anticipating surging demand as reopened restaurants and stadiums start to get back underway Verizon also beat consensus estimates set by analysts and actually by the numbers More than 85 percent of the smp 500 firms reporting results so far have beaten analyst predictions According to data compiled by bloomberg. So that's kind of offset a little bit Perhaps some of the negativity at the beginning of the week and we'll see if these these companies today can follow suit All right, go leave it there. Let you get on Good luck for the ECB today and I'll catch you tomorrow. Thanks very much