 Welcome traders to another tick mill weekly market outlook for weekmencing in the 4th of October, with me, Patrick Mumbly. The dollar has recently pushed to the highs of the year as both central bankers and traders reassess both the transitory nature of inflation and what central bankers plan to do about it. Driving that reassessment, particularly in the US, has been the hawkish set of Fed dots and surging energy prices. I think the move in short term US interest rates has played a major role in the recent dollar strength. Both those themes will be the spotlight this week. The first is whether Friday's non-planned payrolls report is enough to keep the Fed on track to announce taping in April and on track to tighten in late 2022. I think probably so. The second is whether OPEC increases supply on Monday by 400,000 barrels per day. Again, I think in this area they probably will, but rampaging gas prices look like they can keep the energy complex bid for a while longer and the inflation scare front and centre. From a technical perspective, the dollar index as it continues to show weakness below the 9440 level. I'm looking for a three wave corrective move back into this 93 handle. And then from there I've been looking to deploy longer positions to target a test of the pivotal 95 level. In the Eurozone, it's noteworthy that inflation pushed up to 3.4% year over year in September and core 1.9% European central bank had expected higher inflation but not this high. So far the doves have been happy to ascribe higher inflation to trying to treat factors and more against any other reaction. This week we will hear from a bunch of ECB speakers including Core Doves, Lagarde and Lane. Plus we get to see the minutes of the September ECB meeting where a recalibration of PEP was announced. Normally these minutes are quite tepid and rarely prompt to market reaction but they will be under more scrutiny now especially since some members were already concerned that inflation forecasts were too low. On the data fronts we should get to see a broader look at the October PMI releases and some investor sentiment indicators. This week we will also see how the Doves ECB stacks up against other central banks in Europe. As usual the Czech national bank took no prisoners with a 75 basis point hike on Thursday. The week focuses to Poland where an inherently Doves central bank could be faced with some inflation 7% year over year and policy rate of 0.1%. From a technical perspective the euro dollar has extended through the equality objective at 1.16.28. We didn't see any momentum divergence on that low so what I'm looking for is a three wave corrective move now back into the 1.17.50 area. Set short positions with a downside objective now at 1.14.30 before we may see a more sustained recovery in the euro. Japan's next Prime Minister will be Fumo Kishida. Seemed to be very much a continuity candidate and a subscriber to the Japanese yen negative binomics. The negative field to the yen at the moment is added to by the surge in energy prices. Japan's terms of trade are moving sharply in the wrong direction and we should shortly see in the Japanese current account deteriorating as trade deficits erode the traditional net income surplus. Interestingly the yen gained little from a difficult equity environment in September. October is typically a slightly better month for equities. So softer yen may well persist from a technical perspective. We got that key test of the trend line resistance 1.12.30 and saw some supply come into the market. What I'm looking for now is a hold of this 1.10.80 the month of the pivot as an opportunity to set long positions looking for that test of 1.13. And from there we may see a more significant correction. In the UK GBP volatility has been picking up markedly since September and is now back to levels last seen in July. The market seemed a little unsure how to trade sterling on this energy story and early fears of stagnation. Bad for activity but good in the sense that it makes the Bank of England tighten earlier. For the shorter term I think the favor for the dollar is technically there is as much a case of multi-day move in cable to that 1.32. And then we've got resistance just above 1.36. Given that the market now prices a 10 basis point hike at the November BOE meeting and another 50 basis points in 2022. The market will hang on the BOE's every word. Here Dave Ramson speaks on Tuesday. Ramson is a hawk and recently voted to end BOE bomb buying early. Let's see if he pours any more oil on the fire of early BOE tightening from a technical perspective. Like I said the 1.36 is our resistance and watching the bearish reversal patterns here to set short positions. Targeting an equality objective a sea wave low here into 1.33. From there we can expect a more sustained pullback in terms of sterling. Last but not least the Aussie. I think next week's Reserve Bank of Australia rate announcements has a fairly low surprise potential. The bank announced it will keep its tools frozen until February 2022 which should leave most of the focus on the financial stability concerns ahead of the semi-annual financial stability review on October the 8th. Housing affordability should be a central theme in this sense. Any indications the RBA will step in with macro prudential tools to curb housing inflation may help keep the current forward guidance that no highs have been needed for 2024. In the assessment of the economic outlook the RBA is likely to welcome the easing of Covid restrictions in Australia but should refrain from sounding materially more optimistic considering the risk of financial turmoil in China and the strictly related drop in iron ore prices. Markets are pricing in a mere 12 basis points of tightening in the next year which despite being more hawkish than the RBA's board guidance is still quite conservative when compared to peer central banks. I doubt there's much more room for such timid tightening expectations to be scaled back and be translated into Aussie weakness. Evergrande and global risk sentiments are likely to overshadow any post RBA move. Australia's position as natural gas and coal importer may partly shield the Aussie from risk sentiment hits as energy prices remain elevated. So from a technical perspective what we're looking for here now is bearish reversal patterns at monthly pivots which comes in at $72.92. If we get those we want to be looking on the short side, ultimately looking for a move down to test the year pivot $69.91. At this stage it would take a close back above descending train line resistance here $73.70 to get more constructive on Aussie upside. And that concludes the weekly market outlook for week commencing the 4th of October. As always, trade the plan and most importantly manage your risk. Until next time, thanks very much.