 Okay, very good morning to you. It's Wednesday 24th November. Hope you're doing well and a couple of things we're going to cover starting with the look at crude oil. We've got a chart here I'll come back to in a moment, but we had the SPR tapped predominantly by the US but other nations as well and actually Instead of oil moving lower. They actually moved up and had its biggest move north in two weeks So we'll look at the rationale behind there and there's some good comments as well from the analysts at Goldman Sachs about what they have to say about that latest deal. And then we're going to talk about the Turkish lira in freefall yesterday fell as much as 15% The reason is why and then the RBNZ overnight they came out and hiked rates now for the second time rates now at 0.75% But their currency actually moved down in overnight trade and again I'll go into explain at why that price reaction occurred and then we've got an update from Elon Musk He's now halfway through or so that Twitter poll that he put out about the 10% disposing of his shareholding And so we'll have a look at what the latest is on that from and then we'll talk about the day ahead Obviously a really busy day all very much concentrated today in terms of US economic data this afternoon London time And that's because US markets of course are closed for Thanksgiving tomorrow early electronic closes as well on Friday Meaning that most US participants won't come back then after today until Monday next week So we've got things like US PCE which will go up obviously very closely watched given inflationary focus at the moment And on the coattails of that multi-decade high in CPI. We've also got US GDP second reading We've got new home sales. We've got jobless We've got Durable goods so everything's coming out as well this afternoon to look forward to but quick reflection on the charts I'm not going to go into any of these in great detail really because it's a fairly quiet open major currency pairs top-left are basically flat and equity indices are pretty much unchanged Just consolidating large in the overnight session from where we were trading at the close on Wall Street last night The S&P now finished up two tenths and six tenths of 1% Slat under performance once again in the Nasdaq down 0.5 so continuation of a bit of that tech weakness as what we saw upon the Nomination of power and the high yield movement at beginning of the week still being digested for the moment European shares actually nursed the worst losses yesterday They slumped to a three-week low biggest daily loss We've had in nearly two months and of course a lot of people bit apprehensive about the resurgence of COVID-19 cases in the mainland and that's raised fears of tighter restrictions which are being inactioned at the moment across Europe and the impact that will have subsequently on economic activity being kind of reflected in price But I guess the one chart to look at is crude oil and as you can see here This captures the sell-off that we had on the trendline break on Friday as people Anticipating the fact that the US were getting more serious about tapping the SPR and then the announcement itself came out yesterday And in fact prices removed higher biggest gain that we've had in two weeks with WCI crude on The basic notion that the deal that they done was smaller than many had expected And so the US will make 50 million brows of oil available to buyers And as such then prices given that we'd already factored in something more sizable and all the banks were talking more like 80 to 90 This obviously is way smaller, which in itself I think is again very much more Biden pushing this through it's gonna have I think a very minimal impact in fact on on the performance of crude oil But that's probably not the point the optics will appear at least that he's managed to do something for the consumer to manage then Heightened energy prices, which of course are having a really meaningful impact to lift energy price and inflation At the moment, which is a real headache for him politically domestically So we're back at a $79 hand or at the moment Holding on to some of the gains that were seen yesterday The next thing that people will look out for of course when it comes to now oil going forward is what's OPEC's response going to be And they're not going to have to wait long because OPEC are meeting the next week as they always do on a month-to-month basis and Speaking before the reserves release were announced yesterday a member from the UAE came out and basically said there was no need for OPEC Plus to increase oil production any faster than their predetermined plan despite pressure that they're getting from other consumers at the moment And if anything what's happened the US led yesterday with the tapping of the SPR is probably even put even more Friction between say the US and Saudi and other like Russia Participants of OPEC plus at this point in time But Russia of course has got this whole other angle as well at the moment of a source of friction over Ukraine Lots of military movement happening military drills in the Black Sea about whether or not they'll look to invade Ukraine and so on you know if you want to read about the likelihood of that and why that's happening if you just go to my Twitter account I shared a really good breakdown of that from a Reuters article late last night if you want to have a read But one of the things here about this this latest move the reason why I call it More political optics than something more meaningful to really move the needle on the supply side of trying to counteract higher oil prices at the moment A couple of things for one. This is a bit of a look at Going back in time to 2008 And again, you can access this chart on my my Twitter account, but this is looking at the last times Over the recent years that the US has basically tapped the SPR So it marks all releases of at least one million barrels since 2007 And you can see more often or not prices do tend to respond But that isn't always the case in fact when they did this back in 2017 and they released five point two million barrels actually prices went went up And so that's not always the case that it has the the intended kind of impact This is actually the top sheet of a research report that was put out from Goldman Sachs Shortly after the announcement yesterday, and they were writing that so going by the numbers the US have released 50 million barrels with the US From the US as much as 30 million barrels from Korea Japan China India and the UK And what they're suggesting is then the aggregate size of the releases 70 to 80 and that was both smaller than the hundred 100 plus that the market had been pricing in and this is one of the important things We were talking about in the beginning of the week the swap nature of most of these barrels implies an even smaller Cirque of 40 million barrels net increase in oil supplies over 2022-23 Because one of the things here is that actually it needs to be the oil returned back with interest And so actually when you factor that in this latest supply increase is absolutely Insignificant in the grander scheme of things and hence the reason why the market was quick to jump on this and fade the initial knee-jerk headline reaction lower and then just rally the market back up on the back of that Okay, the other thing then is the Turkish lira Just for interest I'm just going to give you a very brief overview because if you go on to the YouTube homepage for amplify me and you go down to the latest videos Which is the one the category where every daily one gets uploaded Eddie and I did a video yesterday about why the Turkish lira is in free fall Really good conversation had some nice interaction with this post So he goes into it Eddie does in a lot more detail given the backstory of the history How we've got to this point why it's been kind of blown out in a latest catalyst by the the convergence of really Erdogan the president pushing back Defending his recent sharp rate cuts To give you an idea of top-level numbers interest rates around 15% res inflation is tracking at 20% in Turkey He doesn't look like he's gonna back down from that and all the meanwhile while the domestic currency weakens The dollar is strengthening under the more hawkish tilt now We're hearing from Federal Reserve officials of which is creating further downside pressure for the Turkish lira So yeah, check check that out. The lira is absolutely hammered yesterday It was down as much as 15% at one point the lira is 11-day losing streak is now It's longest it's had in 20 years and it just really Was an acceleration of what has been a pattern of several years of declining value for currency But in November alone to give you some context the Turkish lira has lost a third of its value now So yeah, although we might fade a bit of the aggressiveness of the move yesterday Given the fact that Erdogan is probably unlikely to back down Could be one to continue to watch and it could get it could get worse before it gets better to that extent The other thing then just quickly to talk about is the RBNZ and the reason why is they became the first central bank amongst developed nations to increase rates for a second time in 2021 rates were lifted by a 25 basis points overnight and now reside at 0.75% in response to runaway inflation and Overheating economy you can see here the prior to the episode really of the economy starting to roll over a bit And then of course the pandemic hitting rates have gone from kind of circle one seven five all the way down to the lower Bound and then we've had this to break hike return More recently in actuality though the Kiwi dollar although it spiked and saw some initial volatility on the release I transitioned my screens here. This is looking at Kiwi Kiwi futures And as you can see here the volatility on the release and we've actually Generally moved lower post that announcement which might seem strange just looking on top level this bank It's just height rates for the second time this year one of the only developed Nation banks to have done so the bank said they forecast inflation to run above 5% for the next three quarters peaking at 5.7% in March because of higher oil prices rising Transportation costs and the impact of course of supply shortfalls the main rationale behind why the currency reacted negative way is that Although they expect inflation to return towards a 2% midpoint of its target banned over the next two years They do see it moderating over time the important thing of why it slipped to a six-week low is that most people are actually looking for a More aggressive rate hike. So although they've done a Second one's been executed in the cycle people actually thought just given the conditions particularly on the inflationary side That they were going to step it up and go for 50 basis points rather than 25 and that didn't materialize And so we've just generally trended a little bit lower there overall So that was the Kiwi side of things and then pray briefly just an update on on Elon Musk Here's the chart of what he's pledged and the amount of shares he would need to sell to fulfill that pledge of Offloading 10% of his stake so it came to light because all of this stuff needs to be filed And so it's quite visible for markets to see and Musk sold an additional 934,000 shares for about a billion dollars according to regulatory filings late on Tuesday session He also exercised about 2.15 million stock options and the sales were made to cover Taxes related related to the transaction when he does execute these he has to pay tax on it Which is why it becomes quite a tricky thing to manage when you're talking about such such size I've not actually looked Directly at this to mark it up Recently, but here's just a look at the general ebb and flow of Tesla shares and in fact, you know, this is only really looking at the last two months or so of price activity And you can see here. We have saw quite a sharp bounce here As trade recommence for the beginning of the week and we've actually faded that quite sharply We ran into the kind of 1200 dollars a share as generally a bit of an obstacle And since that point we've declined to the lows around 11% from those that were seen at the close yesterday on this latest filing You could say though that the magnitude of these sell-offs is getting smaller as the market kind of acclimatizes to him Doing these share sales. I mean if you look at that first one that we had that was more like 16 overall move of 20% The move now in fact from the highs is more like 10 to 11% So I would imagine he gets through the rest of this was out really too much damage to the stock price and overall one of the key levels of course, which has Broadly held is the psychological 1000 in the Tesla stock price And we did have a brief for a beneath their beginning of last week Managed to see a really sharp recovery So that's obviously quite a key lower bound level around 978 But for now, I think The the impact will become a deep diminishing impact now that the markets are becoming a lesser sensitive to these developments But they still are having an impact is the point So good for medium-term holders. I don't think it's a big issue what's happening now for the intraday guys Yeah, you just need to have your wits about you to keeping an eye on some of the news flow that's coming out All right in terms of the day ahead So we've got German ifo coming out shortly this morning And the headline figure expected at 96.6 So a slight move lower down from 97.7 But it's going to be an increasingly interesting figure to watch I guess going further forward because it's only most recently that the covid case rate in Germany continues to tick up quite aggressively And then now continue to talk about more onerous Restrictions and the impact that might have then for companies in particular and their confidence going forward Will be key to watch one would imagine this number will decline in time to reflect that and probably today's number Maybe a little bit too early to really reflect that in full And so something to just bear in mind And then for this afternoon. Yeah, super busy day for the states As you can see durable goods second estimate q3 us GDP you got pce weekly jobless You've got university michigan new home sales all different trees And then don't forget you've got the fmc minutes as well So I'm not going to talk about everything just a couple of the key ones. Of course, one of the big ones will be pce It's going to be monitored quite closely given the inflation focus Which has kind of risen faster And to a higher level and perhaps the the Fed officials were contemplating originally and that then Has contributed to this more hawkish developments in markets for rate pricing And subsequently in step with the shift in in some of the Fed rhetoric of late um The pce data reflects change in household expenditures and a subsection of that data core pce Which discounts the effects of volatile food and energy sectors is the one that's going to be particularly closely watched and that's Expected to remain unchanged For q3 at 4.5 percent But definitely markets will will pay close attention to that. The other thing we've got then is is gdp Uh analysts at the dutch bank i and g expect a modest upward revision But the october personal spending will be more significant as it tells us how the fourth quarter started New home sales also coming out today not expected to be Move much on the month but increase in the home of the sentiment suggests buyer traffic is on the rise And that should lift housing activity going into the new year And then finally initial jobless claims expected to be tracking down at the kind of mid 200 000 level Looking for it to be fairly consistent with last week um, you the oil inventories Um, obviously we'll look out for this afternoon and then the markets close um will happen In terms of thursday sessions So it's going to be a very jam-packed day And then it's probably going to be very quiet buying anything unexpected for the rest of the week Although there might be some electronic trade happening actual volume will be very small state side Then you've got the fmc minutes of course last thing just to wrap up This is from that meeting where they really commenced tapering And so a lot of people might scrutinize the actual line-by-line account of those discussions However, I guess the key thing markets are looking for at the moment is What would constitute and what type of Progression would need to be seen and how would it how would it look in terms of a speeding up of tapering It's probably way too early to see that have materialized in the minutes that came out because this was about the launching of Not now where the discussion is at in markets right now What two weeks or later after the event three weeks later where the where the narrative was moved now And so for me the minutes are perhaps a little bit dated And I wouldn't actually be looking for too much to come out to them to be quite honest All right, that is it from me Again any questions at all feel free to drop me a comment Hope that was useful, and I'll see you guys tomorrow. Thanks very much