 Welcome traders to another Tickman Weekly Market Outlook for week commencing the 13th of June with me, Patrick Munnally, starting in the US. Big event obviously this week is going to be the FONC, having spent almost all of 2021 in denial toward inflation risk while pumping up talk that the rather blunt tool of monetary policy should be used to achieve fully inclusive labor market conditions. The Fed has since but gradually pivoted through the stages of grief in terms of inflation management. This week's two-day meeting on Tuesday and Wednesday is likely to be the cathartic acceptance stage, if not for long capitulation. The Hawks will be running the show. This will be a full meeting including the statement on Wednesday at 2pm Eastern Standard Time alongside the summary of economic projections and the revised plot of the committee's not-a-forecast forecast for what they don't think about their thoughts on the policy rate going forward and who said that anyway. Right, just call it a forecast guys, the rest of us have to. The Fed Chair Powell's press conference will commence at 2.30 Eastern Time. The problem is that the Fed's hand-holding habits prefer to be pre-committer moves, a meeting ahead of time which seems incongruent to also claiming to be data dependent and not on a preset path. The aim to pre-commitment may be to avoid disrupting markets. Yet the merits of this approach have been dubious as markets are already highly disrupted by the perception that inflation risk has run amuck and the glaciers are melting faster than the Fed has been tightening. Obviously we've got a really hot CPI print on Friday and with a 1% Fed funds upper limit is clearly far too low for an economy absent slack and if not beyond full employment and with inflation more than four times target. That's right, more than four times the target. So let's take a look at other data releases in the US this week of notes. On Tuesday we get May, NF5B, small business optimism. Looking for a 93-print there, cost pressures and labor shortages are the key concern. We also get May PPI looking for a 0.8% print versus the last print of 0.5% supply issues to keep producer prices elevated in the near term. Then we move into Wednesday just ahead of the FOMC we get May retail sales looking for a positive 0.2% print. Inflation and higher rates are starting to affect the capacities to spend in the US. We also get June Fed Empires stating that it's looking for a three-print there, volatile but firm order pipeline should support New York manufacturing. We also get May Import Price Index looking for a 1.2% print there, import prices to remain at elevated levels. We also get April Business Inventories looking for a positive 1.2% print. Businesses are rebuilding inventory at a really robust price. We also get June NHAB Housing Market Index looking for a 68 versus a 69 last time out. Affordability, rising input costs and interest rates are a concern. Then we round out on Wednesday obviously the FOMC decision expected to raise rates to 1.375%. Second of the three consecutive 50 basis point rate hikes that appear in bounds. Moving into Thursday, May Housing starts looking for a negative 0.6%. Labor market and limited supply to provide underlying support for residential construction in the medium term. May Building Permits expected a negative 1.8%. We then get June Fully Fed Index looking for a five-print there. Inflation and supply chain concerns are front of mind. And we round out Thursday with initial jobless claims obviously looking at very low levels somewhere around the 220k mark. Running out the week on Friday in the US, May Industrial Production 0.5% expected volatility to linger as firms navigate supply issues. We get the May leading index of a negative 0.4% print pointing to a slowing of the economic momentum. And we round out the week with some FedSpeak from Chair Power who is providing opening remarks at a dollar conference. So moving to the charts from a technical perspective, we are looking for the dollar to extend now up through the prior cycle highs to test the minimum 106 level, which is our minimum upside objective for the fifth wave extension here. From there I'm going to be watching for this bearish momentum divergence to be maintained and see the potential then for a pullback to retest that 104 level, 103.90 as support for then potentially another leg higher, or potentially a more meaningful high in place. But certainly at this stage, whilst we hold above 103.50 the target now is that 106 level. Moving to the Eurozone and in terms of data, Tuesday we get June ZEW survey of expectations, confidence is on par with pandemic lows at this stage of the Eurozone. Moving to Wednesday, we get April trade balance deficit to remain very wide on energy price concerns. April Industrial Production looking for a positive 0.7% print supply chain issues, supply chain issues are an ongoing headwind. And then we round out the week in the Eurozone on Friday with May CPI looking for an 8.1% print there. Price pressures are intensifying and broadening as we have seen in the US. From a technical perspective, dollar index bearish outside reversal pattern on the weekly chart last week. And so I'm looking for follow through to the downside now, looking for a test of the prior cycle lows back into that 103.50 area. And then as pullbacks remain shallow, I'm actually looking to move down now to test towards parity as the next objective to the downside. At this stage, we need to close back through the 107.50s to suggest a false downside break and another look to that 109 on the upside, but probabilities favor the downside at this stage. Moving to the UK. April trade balance on Monday, deficit to remain wide on import strength. We then get Tuesday's April ILO unemployment rate, looking for a 3.7% print there and employment to hold below pre-pandemic levels. And then on Thursday, we get the all important BOE policy decision, market anticipating a 0.25% hike in rates from 1% to 1.25% rate hikes needed really to tame inflation despite the weak economic situation in the UK. Then we round out the week in the UK with May retail sales, cost of living pressures are likely to be weighing on spending in the UK. From a technical perspective, bearish reversal pattern also in sterling last week. And what I'm looking for now is a break of the week lows there coming in 122.90s to set up a retest of the price cycle lows 121.60s and ultimately get that test of the 120 area 78.6% of the advance of pandemic lows and the 161 extension from our swing high here at the 137.40s. From there, we'll see if we can get some momentum divergence in play and potential for a correction to develop. Japan, moving to Japan. So on Tuesday, we're going to get April industrial production, final estimate looking for a negative 1.3% print there. Then on Wednesday, we get April machinery orders. Last time out positive 7.1% print, we're actually looking for a negative 1.3% this time as the investment outlook has really been clouded in Japan there based upon the supply chain issues. Pretty light data calendar there in Japan this week. But from a technical perspective, the dollar yen looks poised now to test the confidence here. We've got a couple of our three pivots lining up. It's just above the 136 area. From there again, I'm looking for momentum divergence to materialize and I'm looking for a pullback then to test those prior double tops there 131.50s before looking for the next leg to the upside. I'm rounding out the week down under in Australia. We've got in terms of data, we get May NHAB business survey on Tuesday federal election campaign, RDO rate hikes could have adverse effects, sorry, on that reading. We then get the June Westpac MI consumer sentiment on Wednesday. That rate hike, the 50 basis point hike there is likely to cloud that sentiment. We also get May overseas arrivals per preliminary looking for 575,000 there, acceleration in April, hopefully more to come in May for that reading. And then on Thursday, we get June MI inflation expectations, last time 5% print there, slightly to remain elevated, mirroring the official Q1 CPI. We also get May employment prints on Thursday, looking for a 25k print there, elevated vaccines, quite a robust labour market demand, but payrolls likely to remain soft and employment to round down to about 3.8%. We also get the RVA bulletin, quarterly bulletin includes the RVA research articles on Thursday. That rounds out the week in terms of data for Australia. And similarly, we have seen a bearish outside reversal pattern in the Aussie bear coming from that high volume load on the weekly chart, the 72 handle. So I'm looking for an extension now down through the 69-60s to see things accelerate to the downside, to retest price cycle lows 60 at 20s, and ultimately looking for that a quality test down to the 66-50s before we may set a base for a more meaningful recovery. At this stage, we need to see a close back to back through the 72-50s, suggest a false break, and then a move back up to potentially test a bit of their 74-20s, but balanced probabilities is weighed to the downside at the moment. And that concludes the weekly market outlook for a week commencing June the 13th. As always, trade us, plan the trade, trade the plan, and most importantly, manage your risk. Until next time, thanks very much.