 Okay, very good morning. It's Thursday the 19th of August and for any students That's university college school students who are interested in financial markets or financial roles in general Check out a link. I'll drop if you're watching this on YouTube in the comment section below to see the registration for our new Amplify me platform. You might have seen the video go out from Eddie and I about changes that are happening at Amplify So this is going to give you access to take part in a completely free Financial simulations that we use at all of the big banks in our training that we do with corporate clients University business schools from around the world, but not only the simulation technology It's also going to give you exclusive content within a brand new platform And then as I said all completely free in our attempt to try and democratize financial education So check it out if you're interested and you're a student Otherwise, let's get straight to it and let's talk about markets this morning and certainly an interesting open For the the trigger point coming from the minutes last night, which we'll talk about in the moment But in summary, I would say you've got FOMC minutes showing that most officials see tapering Happening this year, which is a little bit more specific on the timing and perhaps caught a little bit people Offside in the notion of some still anticipating Q1. So obviously a little bit more hawkish This is constituted then a quicker tightening of financial conditions possibly ahead So equities have weakened the dollar's bid and the dollar strength has weighed on things like crude oil and gold the Later so crude oil also down trading Just testing the sixty four dollar handle this morning That's the lowest levels we traded in a couple of months Covid still ever present in the Far East and now there's been a latest Oxford University study questioning the efficacy of Some of the vaccines particularly the robustness of the Pfizer and BioNTech vaccine over a multi-month period Then we've got China still continuing its crackdown. This comes amid economic momentum stalling in that country That as well just having the demand consequence as well on crude oil And then stocks, of course, we were looking at some of those charts the other day Which having gone up a hundred percent from the lows History has tended to repeat itself going back to 2002 and we continue to see what has been a Lower close on Wall Street once again following the lower finish we had on Wednesdays or Tuesday sessions So the S&P Dow finished down about 1.1% and as that was down fairly similar margin down around a percent But let's have a quick look around these these charts and to put into context the the kind of summary of those major points I just covered so the dollar index is pretty firm this morning We're trading up about zero point three five percent in the Dixie So just having a quick look here on the daily chart for the Dixie You can see we're at a very meaningful level here. We're trading around 9350 at the moment which you can see here was the March peak that we had this year But any breach above that then we'd be looking at the highest levels of Dixie's traded since November of 2020 so definitely worth keeping an eye there and that comes in the context then if we flip that onto What does it look like on the likes of the Euro dollar pair? It does look certainly like there's some technical room now here for a potential extension of downside And you can see here You've had the break the pullback to that level which was that previous load that we had in March And then we've had a bit of a run lower as European participants have come in this morning So trading 1 16 81 in the futures down 37 pips this morning Perhaps then a bit of room on a continuation here given the lack of world credible technical areas to support this price Until we get lower down to really that double bottoming out what we had in September November of of last year and that would be A good 40 pips down lower from current price of where we're trading at the moment Very much a dollar led move so cable very much mimicking that similar euro dollar pattern But a pressure this morning again a breach that we had in overnight Asia pack trade with the Persistent dollar strength on the handover from the US move from the FMC catalyst And then we've come back up briefly towards back that low and then trended back down as Europe has come in on the daily Again, perhaps a little bit of room here To the downside in a similar fashion to the euro by a similar margin as well of around 35 to 40 pips Until we get back down to that similar area of that double bottom cable Of course did break down through there momentarily to test back down to the early Feb 21 lows, but any reversal of that then or the reversal of that puts that kind of line at 136 72 back in play Before then any continuation back down to those lower points that was seen a few weeks ago So yeah, as I said very much a dollar play that dollar has weighed on gold So, you know, don't think of gold as a flight to quality instrument on the pickup and concerns over COVID or questions on Vaccine efficacy. It's very much more a dollar play at the moment technically on the daily charts been quite interesting for gold We've had that hawkish FMC spin and that we had back in the June meeting We thrashed out an area of resistance around 1833 in the futures we then had the good NFP just a couple of weeks ago and Technically a really nice response that we've had this week to around that 1791 level which you can see was the peak in the price and recovery of resistance back on the 23rd of June Nice area of consistent support through much of mid to late July and the markets just pivoted And around that point failing to breach that and so on the downside here Yeah, perhaps gold as well has a little bit of room to just pair back a little bit after what had been a really sharp Recovery that we had seen over the last course of the last 10 days trading or so Oil as well then I briefly mentioned Again demand implications of course over the kind of difficulties in controlling the outbreak of the corona virus in pockets of the far East in particular Australia still seeing Some of their worst cases at the moment same in Japan in terms of tackling the outbreaks presently Little bit better developments apparently reported in China, but nonetheless oil still remaining quite heavy at the moment And obviously this comes amid the dollar strength and resurgence that we've seen which at these points Like I said in the Dixie any further breakout could impart more downside pressure on these commodities on the daily chart Quite interesting from a technical perspective WTI crude There was that long-term trend line going back to April that held up really nicely And then we've come back up in the overnight Well yesterday session to retest exactly at that same trend line and then this latest push down So definitive breakthrough really that horizontal line of fifty or sixty five forty seven has seen then a bit more of a Coordinated break down now in the price going into this European opens this kind of area being breached During yesterday and so now the next kind of era be looking at would be down to that 24th of May low Which is is I'm looking at a daily chart here. So does mean a potential for a bit of a deeper move We're trading sixty four twenty one that would be sixty three sixty three on the downside And then obviously deeper targets on any more negative developments would be down on that 21st of May low So you've got the sixty two handle sixty one fifty six there Would be more medium term targets Okay, so let's let's have a look and get stuck into some of the news stories then starting off with the Fed minutes So what exactly did they say? Well, actually there was a bit of whipsaw price action in the dollar initially My understanding is having not watched the minutes live is that you had initial blip lower Then the dollar move ensued because they were talking about there's still not all the conditions have been met on the progress That they need to be seen So it would be tantamount to tightening particularly with emphasis on the labor market a lot of that is being recycled Of course what we've heard before the main point here was that most officials see tapering starting this year And it's this year. I think that came with a bit of surprise and just the how specific the wording was around that in general And that created that hawkish reaction has got the markets a little bit spooked in the context of some of these other Factors as well this was weighing on equity sentiment going into the European open Several participants noted that an earlier start to tapering could be accompanied by more gradual reductions in the purchase Pace and that a combination could mitigate the risk of excessive tightening of financial conditions in response to tapering announcements So I do think that that's quite an interesting point. And so The secondary question beyond the actual timing of tapering is really two-fold. It's the composition And how they're going to break down the actual purchase rates more MBS or treasuries but also the pace of which they're going to Decrease the the volume of monthly bond purchases So as the market gets over that timing announcement It could be then as several participants are suggesting you could soften the earlier timing We're doing a smaller more incremental gradual withdrawal of the the pace of bond buying So it's something quite interesting to just be aware of overnight in Asia The sentiment obviously was was soured by the weaker hand over from from the US but Alibaba shares They were down around 4% overnight. We're talking about you know Alibaba is a big company Record low they've now printed in Hong Kong trade They've extended the sell-off of course of the Chinese technology giants after Beijing hit the industry with a fresh round of regulations The latest is that China is said to be studying separate proposals to ensure the rights of drivers who work for online companies and to step up oversight of the live streaming industry So, yeah continued pressure there in In what we have been seeing over recent weeks, but again another facet that's adding to some of the various developments of late The other thing we've had overnight to be aware of is some Australian labor market data Despite the jobless rate falling to its lowest level since 2008 an outbreak the Delta variant of course Which we know of the coronavirus has shut in a lot of Sydney and put people off looking for work Unemployment rate fell to 4.6% but analysts have noted that it's being driven mainly by the fall in the participation rate A deterioration in both employment and hours work is likely to Really come to the forefront over the coming months due to the ongoing lockdown That we're observing currently in Australia at the moment So the Aussie the Aussie is weaker quite a bit this morning without about 61 pips in the Australian currency So it's a combination of despite there the kind of headline positivity The underlying nature is that we shouldn't really Look too deep into those we should look deeper in those numbers and not take them on the surface value and so In actuality labor market is probably going to soften the full impact of that Delta situation really looms and China is generally losing a bit of Economic momentum. These were all negative developments for the Australian dollar And the country in the midst of a lockdown COVID outbreak at the moment So they the Aussies are remaining pretty weak and of course this comes amid perfect fundamental Divergence with the dollar strengthening on the back of that that hawkish catalyst from the minutes last night for the FMC the other thing to mention is about COVID and COVID vaccines are less effective against Delta according to a large Study, so what exactly is this? Well, here's a graphic to represent an Oxford University study published today And it's found that the efficacy of Pfizer vaccine against symptomatic infection almost halved After four months. So you can see here on the timeline on the axis on the bottom One month two months three four five and you've got the efficacy rate in percentage terms on the left-hand side So we've always known that the Pfizer by Ntech efficacy rates is higher than that of Astra But actually pretty much after three and a half going to four months They flip and four months after full Laxillation AstraZeneca may actually offer greater protection against symptomatic infection than that of Pfizer So what does this all really mean? Well, it just certainly increases the cause for booster shots for one We've already heard from President Joe Biden yesterday that administration will start offering those booster shots as soon as late September the UK likely to do the same But of course it means though that countries around the world are still a lot of them haven't even had their first vaccine And so if a lot of that manufacturing and and distributed supply of vaccines is going to booster shots in the more wealthier Nations like the US UK and the Western world in general then The the full control of COVID on the global scale is unlikely to come for a long period of time Given those less wealthier nations that won't have access and the manufacturers are likely to prioritize that of the lights of These booster shots in those nations that can afford it. So, yeah, it's quite interesting To think about it from a slightly more longer term perspective and certainly then does rise some complications about then Certainly if efficacy rates over time are not apparent, but then there's always going to be the emergence of perhaps Coronavirus mutations through the fact that many countries globally In underdeveloped countries have not really vaccinated or have that under control Then there could be more long-term repercussions of that on a global economy scale The other thing then is the calendar. What can we expect from today? And so, yeah, pretty quiet for the UK European morning So very much a sentiment hand over this morning keeping an arm of the technicals and the general bearish tone Then into the afternoon we get look out for the weekly initial jobless claims Last week saw the figure drop for a third straight period and We're expecting that to happen again to three six three from three hundred seventy five thousand You've also got the Philly Fed number coming out Later on that'll be at the same time as jobless It's expected to see a slight uptick as you can see here to twenty three from twenty one point nine That would be a slight break of what otherwise has been three consecutive deteriorating numbers on that headline figure European supply coming out France this morning You've also got a two five seven and two year floating rate note funding announcement out of the US at four And an eight billion dollars in the study of tips coming out of the US at 6 p.m. This evening, but that is it so again Remember to check out that link that I mentioned at the beginning of the briefing if you're a student and you want to take part in one of our Simulation technology exercises that will generate some real interesting performance data about whether you could make it As a sales trader an investment bank or or as an asset manager managing a multi asset class portfolio I think you'll enjoy that otherwise On YouTube, please feel free to subscribe lots more content coming and with that I'll let you guys get on have a good day ahead catch you tomorrow