 Good afternoon, ladies and gentlemen. Happy New Year to you all. Hope you had a fairly decent Christmas and New Year break. And now we're back, back at the sharp end with a new year 2023. A fairly positive start to the year for European markets, less so in the U.S. And I think there's a disconnect that could well continue over the course of the past few weeks before we get started. A couple of risk warnings. Well, ultimately, I think today's payrolls report will probably confirm to us what the economic data that we've seen from earlier this week out of the U.S. has been telling us that is namely the U.S. labor market is quite tight. Job vacancies are still at record highs, and that is going to exert upward pressure on wages going forward. And ultimately, I think what that will do is put upward pressure on yields, as well as upward pressure on the dollar. Now, one of the questions that I got asked just prior to starting was, am I buying the recent hawkish tone from Fed speakers? Do you think U.S. inflation has peaked? And the U.S. rate hikes will stop soon. There's a lot to unpack in that. But let's take a little bit of a step back from where we are now and where we were 12 months ago. 12 months ago, U.S. markets were trading at record highs. The Fed funds rate was at 0.25 percent and equity markets were pretty much flying high. Since then, the Fed funds rate has gone from 0.25 percent to 4.5 percent. Even the ECB headline rate has gone from minus 0.5 percent to 2 percent. And the Bank of England has gone from 0.25 percent to 3.5 percent. So the big question for this year is, what is the terminal rate for interest rate hikes? When do rate hikes end? And at the moment, you can ask three or four different people and they'll probably give you seven or eight different answers to that question. Because ultimately, we don't know. I do believe, in answer to one of your questions, Richard, that U.S. inflation has peaked. We've seen that and we know that from the CPI numbers back in June when U.S. inflation peaked at 9.1 percent. We've got U.S. CPI coming out next week for December and that is likely to fall again from its current 7.1 percent to around about 6.5 percent. And if it was just about headline inflation, then I would say that yes, we are probably closer to the end of the hiking cycle than we are at the beginning. But unfortunately for us and for U.S. equity markets in particular, I still think that there's potential for at least another 100 basis points of rate hikes from the Fed between now and the beginning of Q2. Why do I say that? Well, ultimately this week's jobs data from the ADP saw a very, very strong number come in, 235,000 jobs. But it wasn't so much that that really caught my eye. It was average wages on the ADP report came in at 7.3 percent. Weekly jobless claims also fell sharply from 225 to 204. So jobless claims alone wages growth is potentially edging above headline inflation. And that is not something the Fed will want to see. They will be concerned about that. So I think irrespective of what today's payrolls report comes in at and we're expecting it around about 202,000, which will be down from the 265,000 that we saw in November. The fact of the matter is the focus is now less about headline inflation and more about core inflation and services inflation and wage inflation. And it is here where while the headline number of inflation is falling back, the more stickier aspects of inflation are starting to gain traction. We're seeing it to a lesser extent here in the UK as well where wage inflation is trending at above 6%. And yet in the US in hospitality, according to the ADP numbers that we saw yesterday, hospitality inflation is above 10%. So I think even if we get a slightly disappointing headline number or payrolls report today, which prompts a little bit of dollar weakness, I think in the short term, the dollar is on course for a little bit of a modest rebound. We've certainly seen that in the last 24 hours in the way the market has responded to that ADP report yesterday, but also more importantly, those jobless claims numbers and those wages numbers. If we look at you the way Euro dollar has behaved over the course of the past few days or past couple of days, it's broken below this series of lows through here at around about 105.70. And now appears to be heading back towards the 50 day moving average. And this series of lows through here around about 104.40. So yes, I do think the dollar has peaked, but I think given where we are now, given the fact that the Fed is likely to raise rates again in February, first of February, by 50 basis points, the reality is given where we are when it comes to the actual US labor market, I think the Fed will feel emboldened by the fact that they can hike by another 50 basis points in February and potentially leave the door open for another two lots of 25 heading towards the end of Q1. That would put the terminal rate at 5.5%. Now the markets don't have the terminal rate of 5.5% at the moment. And if you actually look at the US two year yield, that is at around about 4.5%. So the market that is not pricing in much in the way of extra rate hikes this year over and above 50 to 75 basis points is certainly not pricing in a terminal rate above 5.25%. Certainly Neil Kashkari of the Minneapolis Fed, who in the past has been very dovish when it comes to US interest rate policy is talking about the terminal rate of above 5.4%. That's 90 basis points above where the Fed funds rate is at the moment. Similarly, I think in Europe and the UK, the terminal rate is probably quite a bit higher from where we are at the moment. The bigger question is who's got the most capacity to hike rates the most between now and the end of Q1. And ultimately the market thinks it's the Federal Reserve. And that is exerting upward pressure on yields, it exerting upward pressure on the US dollar. And that is particularly notable if we look at dollar yen. Dollar yen, we've seen a big rally this week alone after hitting lows of 1.2950 earlier this week. We've seen really strong gains. The big level on dollar yen is 1.3480. What's particularly notable about this, and those of you who like candlestick charts will like this, that looks like a bullish weekly reversal. So if that weekly reversal is confirmed by the end of this week, which it looks increasingly likely that it will, we've got the potential to see a little bit of a dollar rebound over the course of the next few days and weeks, which could push dollar yen back towards 1.40 in the short to medium term. That in turn will exert downward pressure on the likes of euro dollar, as well as the NASDAQ and the S&P 500. If we look at the S&P 500, this is the level that I've got my eye on, 3,780. If we get a strong payrolls report in around about seven minutes time, then we could well see a retest of these lows, 3,780. If I change that to a four hour show up, we can see that here. You can see the area of support all the way through here. We could see the S&P start to ratchet lower and retest the lows that we saw back in October of around about, just below the 3,600 level. As I say, it needs a decent payrolls report for that to unfold. But ultimately, I think from what we're seeing at the moment, if you look at the S&P 500 and if you look at the NASDAQ in particular, the NASDAQ is looking especially vulnerable. If we look at the trend line from the peaks that we saw just over a year ago, it's held quite nicely all the way down. Really solid support in and around this area here, 10,400, 10,500. It also happens to be a 50% retracement of the entire up move from the 2020 lows to the record highs back in November 2021. We've rebounded off that 50% level and that's going to be a key level. It's going to be a key test going forward if yields continue to push higher. And ultimately, I think when you're looking at companies like Tesla, when you're looking at companies like Amazon and Metta, who've lost an awful lot of value over the course of the past 12 months, I think these growth stocks are likely to come under increasing pressure if yields start to edge higher and the prospects of further Fed rate hikes over and above what the market is pricing in starts to get priced into a rebound in the dollar and the upward pressure that we're seeing on US Treasury yields, which have seen a fairly decent rebound so far this week. At the moment, the US two-year yield is around about 4.5%. We can see that here. It's up 3.8 basis points so far today. I'm going to be paying particular attention to the wages numbers. I think they're probably more important than anything else, but also in terms of services jobs in the US economy and how resilient that sector is there. And there's an awful lot of debate about how resilient, how tight the US labor market is. Well, when you've got 10.5 million vacancies and you've got ADP wage growth trending between 7% and 10%, I would suggest the market is pretty tight. Therefore, even though some Fed members are arguing that they are getting closer to the level where they might want to look at a pause, I think they're only really going to start talking about a pause once the Fed funds rate is above 5%. And that means that that's likely to come after the February meeting. In the here and now, markets are still pricing in the prospect of a rate cut this year. I think that's too early at this point in time. And I also think it's optimistic when you've got core inflation above 6%. Yes, it could fall back next week when the US CPI numbers come out on the 12th, expecting it to fall back to 5.7%, but it's still nearly three times above the Fed's 2% inflation target. Let's not forget all of these central banks have inflation targets of 2%, and they are well north of them. Inflation is well north of them at the moment. So I think any prospect of a dialing back of rate hikes, even though we're close to it, I think it's too early to start pricing that in at this point in time. So we're three basis points higher at the moment on the US two-year. If we go back to what the expectations are for non-farm payrolls, the important numbers as far as I'm concerned, it's not so much the headline number, 202,000. The last seven months have seen the actual number come out above the headline number. I don't anticipate that will change that much. Generally, there tends to be an awful lot of additional hiring in the lead-up to Thanksgiving and Christmas, and that could be reflected in the numbers there. Also, keep an eye out for revisions to the November numbers. I think they're also particularly useful, but I think the real headline number is the average hourly earnings numbers. The expectation there is month-on-month for debts to rise 0.4%, which was slightly down from the 0.6% we saw in November. On an annualized basis, we're expecting those numbers to come back or the forecasts are for 5.1% down to 5%. I'm skeptical the average hourly earnings are going to slip back if the ADP numbers are any guide. I think the risk is probably more to the upside, but even if it is and average hourly earnings come in slightly softer than expected, that will probably only prompt temporary dollar weakness in the wider scheme of things. I think at the moment, the dollar does look fairly strong in the short to medium term. Yes, I think it's peaked, but I think it's due a little bit more strength over the course of the next few days and weeks. We are just coming up to the headline numbers. Let's have a quick look at cable before we get to the actual numbers. Again, that's looking really sick at the moment. We've broken below the 50-day moving average. Again, a decent payrolls report is probably going to see cable retest this area down here around about 1.1760. Another 100 basis points down from where we are at the moment. Any rebound is likely to find fairly decent resistance in and around that 1.20 area, which acted as support all the way through here in these daily candles and the back end of 2022. Now that we're below it, the risk is that we could will see further losses going forward towards 1.16 and 1.15 in the short to medium term. As I say, a little bit of dollar strength in the interim that's likely to put a little bit of downward pressure on US equity markets. The numbers are now out. That's the Canada numbers that you can see up there at the moment. Non-farm payrolls comes in at 223. That's 20,000 above expectations. Average earnings 4.6%. That's slightly weaker than expected. That's going to push the dollar down, and we're certainly seeing that the unemployment rate has fallen to 3.5%. The revision to November average hourly earnings is 4.8%. So wages slightly softer, headline numbers slightly stronger, unemployment lower, Canada payrolls better than expected. So again, a fairly mixed report, probably going to see a little bit of a rebound in cable and in Euro dollar. Certainly seeing that in the overall numbers, cable back above 119. That's going to see US equity markets rebound in the pre-market off the lows of the day. Certainly seeing that in these numbers here now. As we can see there, and let's have a look at the US two-year yield, probably going to see that drift lower on the back of those numbers. If we just pull that, if I just pull that into the graph now, and yes, those three basis points of gains we're now flat on the day for US two-year yields. So all in all a fairly disappointing number on the headline number. Wages weaker than expected, unemployment lower. It's not really going to change the overall narrative of a resilient US labor market. The wages numbers are disappointing. I don't think it's going to mean anything above, I don't think it's going to change the fact that the Fed is likely to do 50 basis points in February. The bigger question is really what comes after that. So just to recap, a mixed payrolls number based on the numbers that we've seen come out thus far. I'm still passing the numbers at the moment as we speak. So I'm going to have to bear with me a second just to pull that out of the way. So US December unemployment rate falls from half from 3.6, not 3.7. So there was a revision to the November number. It was revised down from 3.7 to 3.6. So US unemployment lower. The US labor participation rate is higher and yet wages are lower. Try and pick the bones out of that one. So that report doesn't really make an awful lot of sense to me on first glance. But I think what it does do is it doesn't, or what it doesn't do is it doesn't change the narrative around the Federal Reserve hiking interest rates by another 50 basis points when they meet next at the end of this month and the beginning of February. So being asked about WTI. So let's have a quick look at that. Had the worst start to the year for crude oil prices since 1990. Let's just get rid of this here and this here. And then I can do a little bit of analysis for you, Leanne. Well, there's no question on my part that there's an awful lot of people are talking the prospects of crude oil up. And certainly, you know, that's a narrative that I don't necessarily disagree with. But unfortunately, the price action is telling me a completely different story. Having said that, I think there is a little bit of a flaw for crude oil on the basis of the fact that if OPEC Plus is so inclined, they can simply cut production. But what we have seen over the course of the past two days is a very significantly bearish impulsive down move which is likely to see a retest of this $70 a barrel level that we've got all the way down here which we saw at the beginning of December. This is a continuation cash contract so it's not going to totally mimic the actual underlying contracts itself. If you want to see the underlying contracts, they can be displayed here with these various contracts through here or under the related option there. So if we go, for example, like February, we can see the February contract there. If we so wish, just get rid of that. Close that down. Or if you want to go slightly, slightly sooner than that. But ultimately I think crude oil is likely to find a little bit of a base probably between $65 and $70 a barrel but in the short to medium term it does suggest to me that there is probably a little bit more downside left in it over the course of the next few days simply on the basis of the mild weather that we're getting but also concerns about China. And I know people talk about China and it's a bit of a cliche but I think it's very difficult to see a scenario whereby demand is going to pick up in China much before the beginning of Q2. They've relaxed their COVID restrictions. Yeah, great. It just means everyone's going to catch COVID. We've got Chinese New Year coming up which means that you've got a super spreader event unless Chinese authorities take steps to try and mitigate the spread of infections. And ultimately I don't think there's the appetite to do that. I think they suddenly realize that Omicron is not containable albeit a year after I think everyone else has and they are going to have to ride this particular wave out and that means that demand is likely to remain weak over the course of the next few months before we see a temporary or a tentative pickup in Q2 because I think Chinese consumer spending has been weak for quite some time. It's likely to remain weak certainly I think for the next three to six months, merely on the basis that the Chinese population are probably terrified of going out and traveling to any significant having been locked down for two years that the fear of God put into them. So WTI for me does look as if it's going to retest these lows. If you get further weakness and equity markets and further concerns about growth going forward then I think that is likely to further exert downward pressure on prices. Nonetheless I think the downside is likely to remain fairly limited in the short to medium term. What's interesting is that we've seen a really strong downward push here and yet we're seeing a really tepid rebound which suggests to me that potentially the market is probably the wrong way around when it comes to crude oil prices. So looking it's the same sort of story when you look at natural gas prices. We've got the natural gas contracts for the UK but also the EU which you can find just by going to the product menu here go to things going to the library either select commodities and that gives you all the commodities that we currently have and just scroll down they're listed in alphabetical order so you can see that there or you can just merely type in natural gas and there's all your natural gas contracts and what have you there. So being asked about Dollar Canada fairly solid Canadian payrolls report looks very much like a range trade on Dollar Canada at the moment certainly seeing that play out in the way the market's been trading over the course of the past month we can probably throw a blanket over it like so so that is your that's not particularly bright colour so I'll just change the colour of that to this there we go actually make those lines a little bit thicker well that's your range in Dollar Canada Richard I think it's a range trade at the moment and I don't see any scenario where it is likely to change over the course of the next few weeks so fairly decent resistance in and around these peaks at around about 136.85 but also fairly decent support in and around 134.70 so I would suggest you place your money and you take your choice on this one that's Dollar CAD in a nutshell on a daily chart there does anyone have any natural gas broken down anywhere near a floor yet I don't think so I think natural gas has certainly got potential to go quite a bit lower we are as far as EU natural gas is concerned back to the levels that we were prior to the Ukraine invasion does that mean that we can't go lower I think the big test will be in the summer when storage capacity in the EU starts to get refilled you know it's like how do you catch a falling knife one thing that the EU won't have in the summer is Nord Stream 1 that is unlikely to come back anytime soon which begs the question having retop their supplies last summer by virtue of Nord Stream 1 how would they do it this summer and that remains the big unknown when it comes to natural gas prices and ultimately that's a coin toss as far as I'm concerned but I certainly think that what we're seeing and what we have seen in energy prices the worst is behind us vis-a-vis with respect to that and the bigger question now is how much of a rebound will we get how much extra capacity will come back online and how much will President Putin be incentivised to weaponise Russian gas supplies in the summer months in an attempt to drive prices higher I think it's going to be a very difficult balancing act for him given the fact that I would imagine that he will have ready buyers for his natural gas in the form of Russia in the form of China and India and ultimately the EU the US and the UK will source their natural gas supplies from the Middle East it will be interesting to see how prices behave once storage levels in Europe start to diminish and at the moment they're at 90% and whether they've come back up from 85% how much they come down between now and the beginning of April copper let's just get rid of this don't need that surplus to requirements this is a nice little consolidation pattern playing out in copper prices at the moment and ultimately while I'm slightly bearish on US markets I'm probably not so much bearish on copper for the simple reason being is that we still need lots of it we need lots of it for semiconductors we need lots of it for electric cars we need lots of it for solar panels so I'm still very much of the opinion that if we get any dips in the copper prices you really have to be a buyer of it because ultimately whatever the global economy does there will still be ready demand for not only copper but iron ore rare earths like cobalt lithium and what have you as the global economy transitions towards renewables so for me copper is very much by the dips fairly decent support on the 50 day moving average but also these lows down here so around about 370 through there and there and if we get a break above the November peaks then we could we'll see further gains back towards the highs of this time around about March last year but I don't think it's any coincidence that while equity markets struggle copper will struggle but I think if we look further this year the main question that I that I ask myself is it likely that 2023 is going to be as bad a year as 2022 and the answer to that question I think is no I don't think it will be and I think the second half of the year is probably going to be a much better than the first three to six months of this year I'm certainly much more aware of that but I think I'll say for example on the FTSE 100 for example I think that there's real potential for the FTSE 100 to make new record highs this year near 8000 sticking my neck out a little bit but if you look at the FTSE 100 and how that has performed relative to pretty much everything else we are right back is all the way back in 2018 79 7900 must be a fairly realistic goal going forward there is fairly decent resistance currently where we are at the moment but for me I think of all the major markets this year and I'm sticking my neck out a bit I think the FTSE 100 has the least amount of downside risk when it comes to when it comes to the potential performance for this year simply on the basis that you've got banks banks generally too well in a high interest rate environment assuming that the global economy avoids worst case scenario recession then ultimately these better net interest margins should be good for the bottom line for banks but the financial gas prices while they've come down quite a bit are still likely to be fairly decent revenue earners for the likes of the oil mages when full tax is notwithstanding and mining stocks obviously FTSE 100 is full of them commodity prices particularly particularly base metals and other metals are likely to remain fairly resilient slightly apart from obviously the more consumer facing areas of the UK market I think there's room for optimism that we could well see a much more resilient performance from the likes of the FTSE 100 then was the case say last year even though it also outperformed the rest of the market last year as well any other questions ladies and gents before I wind this up just a quick reminder of what's coming up next week and that's also likely to be a key test for US markets it's the start of US earnings season so we've got aside from US CPI for December on the 12th of January we've got the latest minutes from the European Central Bank remember how hawkish Lagarde was press conference in December it was like listening to the Bunders Bank so she's potentially talking 350 basis point rate hikes between now and March which would put the deposit rate above 3% 3.5% even though she's talking about a terminal rate of 3% well that's only 100 basis points above where we are at the moment trade numbers for December that's also that's on the 13th of January and then we've got retail earnings out of the UK we saw some fairly decent numbers from next earlier this week from associated sorry from BNM European retail and Greggs we've got Sainsbury's Tesco's Marks and Spencer's and Whitbread's Q3 numbers Whitbread owned Premier in Q3 numbers coming out on the 12th so that's going to be a busy day and then on Friday we've got fourth quarter earnings from JPMorgan Chase Citigroup Bank of America so again a busy week and it'll be interesting to see what type of or what extra provisions these US banks bring to the table having added to their provisions in the second and third quarters of this year will they continue to do so in their final quarter of 2022 so a big week coming up hopefully it'll be a profitable one for everybody in the meantime I'd like to thank you all once again for your attendance today join me next month same time for the January payrolls report in the meantime let me take the opportunity to wish you all a happy new year and hope to speak to you all again a month from now thanks very much for listening