 Okay, testing 1-2. So as per usual give it a few minutes to get everyone on board And then we'll look to kick off All right, mr. Minaj James. I hope you're doing well Thanks for joining me. We'll give it a minute and then we'll have a bit of a chat about the Bank of England coming up momentarily Goombi How's it going gonna go with that the short work the short part of your name rather the long part I'm afraid Where are you guys tuning in from Always nice to know Where people are and and what do you guys think about Bank of England? I guess just straightforward. Are they gonna hike are they not gonna hike? So let's let's have your answers in the chat If you're if you can just access it below or on the right depending on where you're watching this Type in the chat if you think the Bank of England gonna hike hike or no hike What do we reckon? And then we'll give it a minute and then we'll kick off have a bit of a chat and look at the chart Robert Scotland good to have you tuned in Mamma my man. How's it going? No hike. Yeah, I'm your I'm in your camp. Let's see Okay, we've got a few other answers in Robert don't think they'll hike Taz zoos were I don't know hike Good morning from Trinidad and Tobago I'd rather be there than here in the UK at the moment Okay, CA going for a hike so Ganesh hike so 50 50 here you guys pretty much reflecting on what the market Or how economists at least to split let's let's get to it. Let's have a bit of a chat first About the general setup of the charts and how things reside at this moment in time. So Here's a quick look at where we left things Hopefully you would have caught the briefing this morning and and just have an update from the Fed and so on Not a great deal has changed to be quite frank in terms of first off starting with the equity market So you can see here equity index futures just pretty much tracking as they were Got a bit of a consolidation just happening at these elevated record high levels in the likes of the Nasdaq The S&P of course looking very similar here. So the surge that we had last night Post-fed and we just sat here up and around those higher bound levels at the moment currency markets kind of a wait-and-see I guess now for the Bank of England for short term the sterling currency to Take take the lead at least momentarily otherwise probably then more beyond today reverting back to dollar dynamics To really lead these currency pairs And then elsewhere oils had a pretty decent recovery But did come after the biggest kind of two-month rollover and prices that we had yesterday Again with the OPEC meeting. There's been a few murmurings the One again as per the briefing I think unsurprising OPEC plus likely to stick to plans to raise output by 400,000 miles per day despite calls from the US for extra supply and I'm sure I saw some comments earlier this morning The US were kind of pushing for things like 600 K to 800 K The US are not going to get that but as I explained at the time in the briefing This is about American optics to manage high prices at the pump and OPEC are not going to listen So they're decent reverse with oil quite an aggressive bid really from the open We're back trading an 82 firm handle up just shy of $2 at the moment. So just having a look at Cable and how that sits at the moment. We'll talk about some of the potential scenarios here first and then we'll have a look at The actual price targets that we could look at under bullish or hawkish and dovish scenarios But I guess you've got to look at this a little bit on a daily to get a bit of a sense of the context of Sterling movement of late You can see it was only back late September that we were trading down at 134 Pretty decent recovery though through the early part in the month of October Before some slight moderation in price that we've had of late. So Definitely on the downside levels here on the daily chart 135.73 looking at sterling futures here Would be an area to keep an eye on those previous lows that was seen mid-October Also was the lower that was seen in the summer in July as well Beyond that point 134 see the the more obvious target beyond 135 push under What would be more dovish outcomes today and on the reversal of that then looking back up to To the moves up towards that trend line from some of the price peaks that we've had over the last few months Let's have a look at this from a fundamental perspective. I'm just a recap kind of break down here really is to do with the idea of the market has priced in Rate hikes from the Bank of England very aggressively and the real reason for this is that inflation has been higher than expected There's been opportunities from very senior influential members of the Bank of England's Monetary Policy Committee namely Governor Bailey to push back against that last week and he chose not to you've also had the chief economist Who also came out and said inflation could rise as high as 5% which would be indicative then of being much more hawkish And so therefore supportive as economists and analysts would believe to siding with more immediate need for action and raising rates So that's the context very much inflation driven to support that argument But on the flip side To counteract that has been a lack of clarity of really having a definitive idea of what the labor market looks like with the conclusion Of furlough which have with that data to reflect that end of the program It's not going to really be known for another two weeks or so And so therefore being blind to the potential of is that going to lead to an uptick? Let's say in the unemployed and Of what balance then is inflation and the labor market which is kind of one of the things that journalists were asking power last night And so is it better that they just hold fire and wait now one of the things here to support To pull the trigger now is that today we get the latest monetary policy report and if you will know that comes out in February May August and November and these are when in every alternate meeting on those months the Bank of England Unveiled their outlook for inflation and growth and that allows the markets then to have a kind of indicative idea of where The rate cycle will be in in the medium-term horizon IE two years and so Historically the precedence is the Bank of England likes to to act when there's more Transparency of their thinking and this also there is accompanied by a press conference with Bailey as he addresses questions And so in history these are moments when they release these reports these forecasts that they tend to move and so This is what's dividing The belief about what the outcome could be today one of the things that I think definitely to be aware of is This isn't just about hike or no hike. That will certainly dictate the initial Reaction effect. I think that you see in sterling and certainly from a vote composition How? Exacerbated that move looks whether hawkish sterling up Hike and also the opposite by subversa will first off be determined by do they do it and what is the vote split? Obviously the most dramatic hawkish being 9-0. They all vote to hike which is highly unlikely Because the members on the left the months who are kind of known as the Quite clearly as doves are very unlikely to back that kind of move So probably the most extreme hawkish vote split would be something more akin to 6-3 for example However, even that in itself could flip on the other side and it could be 6 feet to hold But one would say that that's an unlikely outcome given the fact that Saunders and Ramsdyn are outlying Hawks have called before to end QE The comment on inflation by the chief economist Hugh Pill and that lack of pushback from governor Andrew Bailey Means that really if they are going to hold it will probably be more like a 5-4 split One would think so as I said this morning a lot of the balance lying with cunliffe and broadband who sit a little bit more Neutral stance if they do hike though one thing to be mindful of is what does the shape of their inflation Expectations look like over their forecasted period one of the things to reiterate we heard from the HSBC this morning is Whatever they decide with interest rates the the they suspect essentially that they Bank of England will at least push back a little Against the extent of the tightening of market positioning for right hikes that has occurred in recent weeks And so what that could look like is a less aggressive rate Inflation trajectory and a more faster return to somewhat a kind of More normal toward target direction Would be then the idea that it's a kind of Strategy of hiking to counter the short-term challenges that are being met by the inflationary conditions at the moment And so that's going to be the secondary key that will be quite key There's obviously the minutes as well and then the press conference half an hour later from Bailey when it's going to be very important to understand Then his description around these matters, of course All right go back to the We'll obviously tune in the squawk guys will do the normal shower. It's just having a look Good to have a couple of you in the chat Just looking more short-term on a 30-minute bar. Yeah, you've got the Kind of double bottom to the price activity that was seen yesterday afternoon and in the overnight Or early part of the European Open this morning Anything beyond there starts to bring into play the lows that were seen back on the 12th of October So any more dovish outcome you've also got the s1 sitting just around that same level Duvish outcome would be no hike more leaning heavy balance towards the vote split being indicative of I guess a a 6-4 or 6-3 or even 7-2 leaning if it's a 7-2 leaning of no vote then the immediate reaction One would think would be quite aggressive downside here in the sterling currency busting through the lows yesterday And a quick shift through 36 down towards that s1 level Wouldn't be that unsurprising then it's about the subsequent commentary that comes thereafter All right, gonna put the score con. Let's have a listen in. I'll keep the sterling chart visible So just want it now on the rate decision again I'll be to the rates whether I survey unless expected a change is yours But just to recap one more time the markets are fully priced in a 15 basis point increase here I don't even want to leave those bits the asset purchase decision And then I'll cover any commentary from the statement the minutes and the monetary policy reports Yes, remember as you said there the markets fully priced for our hike So no hike you'll see a big move downward in the initial reaction a hike It'll be a more moderated upside move on confirmation, but then it's about the subsequent comments Thereafter okay the cable charts on the screen now 10 seconds Unchanged that's unchanged at zero spot 1% and that was a 7 to a boat's place That's unchanged at zero spot 1% and that's a 7 to 2 of both split there asset purchase facility. That's been there unchanged as expected So the BUE says it will be necessary to raise the bank rate over the coming months if data Especially jobs in line forecast the MPC still sees value in waiting for official labor market data After the end of photo before deciding on tightening policy It's the Bank of England here They're using the labor market as justification for unchanged to bear by a lot of commentary ahead of this half of some inflation But I think they're now pitted towards the labor market in terms of the boat split for guilt purchases That was a 6-3 so it's next to the center here to disappear that man is now doing rounds and ensaunders in Descending in terms of those who descended on the rate decision unsurprisingly that was runs and ensaunders So they descended on both accounts there in terms of other Commentary they never supply chain bottlenecks and signs of weaker consumer demand Lowest near to growth outlook since August. Well, I'm gonna I'm gonna turn him off. So just having a quick look then Yeah immediate downside in cable so down to those levels We were saying at the s1 and those previous lows we're having a look at so again, no change This was priced in for a hike. So hence the move lower plus the vote split was 7-2 So people like Bailey and like the chief economist, they're full of BS basically They did they didn't push back Which would be to be taken as if they would be supportive of a hike and now it looks like they're leaning more on the labor market conditions around the furlough sit side of things and so Yeah, the the split remember we were just talking about that 7-2 So saunders and Rams then I can only imagine with the two that went for the actual Well, I'm just looking here actually the the headline tape that I'm seeing Yeah, 7-2 is what some people someone's printed 6-3, but it looks like it is 7-2 So I'm gonna imagine it's again Rams then saunders But Pew pill Bailey and then broadband can't lift the risks all standing pat And I think that makes sense hence the rationale. Well, I thought it was gonna be Unchanged is that you know, this isn't the time for taking, you know guesses about the labor market Just wait, I don't think a 15 basis point right hike would have really have made a great deal of difference to be honest So, yeah, let's just have a look at some of the subsequent commentary They said it would be necessary to raise bank rate over the coming months if if data Especially jobs is in line with market The asset purchase facility is what was Voted as a 6-3 split just so you're aware. So the rate to be maintained at point one with 7-2 the QE split was 6-3 The Bank of England said these effects are likely to continue pushing inflation up in the coming months We expect inflation to arise at around 5% in the spring next year But expect these high rates of inflation to be temporary Sounds very familiar to Jerome Powell last night when he was talking about the whole idea of transitory and and so on The other things that they've said Upward pressure on CPI to dissipate over time. So again starting on the dovish side Growth outlook as we can know since August on supply issues Sees UK economy returns to pre-covid sides in Q1 2022 And they see the monthly inflation peaking around 5% in April of 2022 Okay, so yeah, I mean that I mean that's that's pretty much it for the minute What I'm gonna do is I'll stay on for another one or two minutes But I'm not gonna stay on for the full press conference. I'll leave you guys to that to tackle on your own But if there's any questions at all, let me know Don't forget as well. I have mentioned this before but feel free to I know many of you are regular names that I see in these feeds, but just as a heads up. Don't forget to check out You can follow me on Twitter for my my daily notes and then Amplify me.com if you're a student just check out that web page some some cool stuff that you for sure be interested in in regards to Simulations that you can take part in that don't cost you anything and certainly we can give you an idea better The types of roles in financing in practical terms and there's a content hub you can access there as well that might be of interest to you But yeah, I really came on to see if there was gonna be Any surprises? I guess this is a kind of a surprise in a way against market consensus more broadly speaking Which was for a hike and that has not materialized So therefore sterling to make sense has weakened against that market expectation Further levels to the downside if that were to continue you've got one thirty five forty four which is that low You can see down here in the left-hand corner on the 6th of October. I guess from here. It really depends on The press conference that now follows But overall, I mean they've talked about UK growth being a little bit softer They've talked about inflation is gonna go up. It's gonna peak of around five percent in April but overall they see it dissipating over time and So with that again, this whole idea of the the current challenges being fairly short-term Not constituting the immediate right hike that the markets had been looking at for the press conference My only advice with the press conference really is about looking out for more clarity and detail around This idea of how the markets are priced He's probably gonna ask be asked by a journalist just does he feel this is governor Bailey does he feel that that's correct is that type of rate hike anticipation Warranted for how they see things at the moment and any movement on that could cause further subsequent reaction effects But this was one of the things that remember I was saying about HSBC this idea of It respects with the rate hike or no hike It's the idea of do the Bank of England look to push back a little bit and moderate The overextension of market pricing for really aggressive rate hikes Which is something I was talking about in the briefing this morning and I of which I think that this is and that they will so Yeah All right. Thanks very much guys gonna wrap it up there millen great to see you getting involved as well I hope your algo managed to get hold of the the announcement and Thanks guys. I'll see you tomorrow for non farm