 Okay, very good morning folks. It is Wednesday the 16th of June and of course a big day for markets because we've got the latest FOMC meeting happening later on today I'm gonna be covering that fully live on the Amphi trading YouTube channel So if you're watching this briefing there now, don't forget to hit the subscribe button and click on the bell icon To be notified as soon as we go live the plan being then I'll commence that live stream at 645 p.m London time for the statement at 7 and then go through the press conference at half 7 for the guys on the Amplify live community of course you better watch Tim and the others trade the event live in your private room as well In the discord room, but look let's get straight into things and talk about this morning and a quick comment on the close yesterday and then about conditions that we could probably expect for This session coming going into the Fed meeting as typically it's quite quiet going into a major event like that First off though, let's talk about the close on Wall Street Then as that marginal underperformance down about seven tenths against losses around Two tenths to a quarter percent in the lights of the S&P in the Dow Yesterday, we did obviously see some selling pressure as we went into the open on Wall Street And it did look a bit heavy if you're involved in the day trading environment But I think you've just got to look at the world in a bit of context come out of that kind of microscopic lens of the The intraday environment and actually we're right up there at of course record high territory So coming off the top here, perhaps a bit of position squaring going into the Fed comes as absolutely no surprise There was of course a couple of catalysts just looking at the S&P 500 here over the course of this week so far We had the likes of retail sales was a slight miss on expectations PPI was slightly higher So again flaring up some of those inflation concerns and US home-builder confidence in the market for single-family homes also fell In June to the lowest levels in August of 2020 Dented by higher housing costs and the shortages in key materials like lumber So there were a couple of reasons and rationale behind the move lower I think it just gave reason to books and profits on those short-term longs that have pushed us up to this all-time new high that we've printed in that morning, of course So bit of a selloff we found some support here in the S&P lower down And as you can see from this trend line emerging from last Friday being well respected at the moment We're locked in pretty tight ranges in terms of the Asia pack session pretty similar to Developments that we've had in the case of the Nasdaq and elsewhere as people kind of just lock in now and await for The Fed to come out and give their latest assessment on the economy and future policy direction FX markets then consequently pretty quiet the dollar index is pretty flat That's reflected in both major pairs which are marginally positive at this point Cable just having a little look here this morning as we get some latest numbers just hit the tape right now UK CPI has just come out as I'm speaking 2.1% versus expected 1.8% so quite a bit higher than expected there for UK inflation figures Just hitting the tape and that's what's contributing to some of that uptick here We've just seen on a test of yesterday afternoons high You can see that was a a level of technical resistance here 1497 That's also the previous Friday support area that acted as some support to price after that move lower that we saw With some dollar strength that was seen on on Friday So but unsustain to some degree the core CPI though in the UK is a pretty meaningful Beat on expectations 2% versus expected 1.5 but a little uncommitted here The Bank of England have been quite clear of course that they do see Short-term inflationary pressures picking up but again playing true to that transitory view that that will fade and be temporary of nature So perhaps the market and a little bit of initial knee jerk reaction, but unsustain does yet on any further follow-through of course Ultimately, I'd say dollar Reaction to the Fed tonight is really what's going to dictate then proceedings for probably the rest of a week for those currency pairs Otherwise elsewhere Gold as you can see top right pretty range bound at the moment Just seeing a respective 55 to 62 And you can see here the upside of that level It's quite technically relevant going back to the week's price activity seems as far and then the downside You've got this double bottom that's formed from yesterday evening and the overnight Asia pack session Which responded to that low as well and then in the crude market I mean crude is absolutely on fire at the minute We've continued to see upside movement through the back end of the US session last night You can see a little bit of an accelerated move here at around half past nine last night And the reason for that of course was we had this which was If I just quit you scoot over the headline Drawdown in the latest API crude all inventories was 8.5 million biggest drawdown We've had since the beginning of the year and obviously double what the consensus estimate was so a Pretty bullish headline there just helping accelerate the directional trend for crude and actually if you look at WTI on the daily These are unaltered kind of technical levels and targets of such that we were looking for we were gunning for On the upside through the break initially of 66 76, so we got to 70 bucks 72 43 which was around the highs that we printed back in October of 2018 was the next target on the break through 70 We've already gone through there now So you can see the pickup in crude here has been pretty on a daily chart quite firm in direction I mean it's had its moments intraday But on a higher time frame certainly things still looking super bullish at the moment We've seen that reflected in some of the CFTC data reflective of The more heavy tilted long positioning for the crude market, you know, it's still fairly tightening supply situation, but OPEC not budging as The economies globally start to continue to reopen particularly in the Western world Just keeping things at the moment on track for for oil of course So yeah further boosted and accelerated in those price gains from the API is last night We've peaked at around 72 83 in the APAC session a bit of a fade from there Which is unsurprising given the push-up that we've seen over the last 24 hours But I'd probably say we're now gonna have to wait for the DOEs later on this afternoon Of course to get a bit more short-term direction there of whether we can continue to push on up to multi-year highs All right Well, let's talk a little bit about some of the news and gonna start off with the fact that you're probably gonna hear quite A bit about the UK lockdown again in national press and the reason for that is that the government has to now have that hearing in Parliament later on today as you've probably read it's gonna trigger somewhat of a backlash Among certain members within the Conservative Party I the lights of Steve Baker and so on who were kind of dubbing it Freedom Day that's been taken away from them And so it's gonna be a little bit of pressure on the Prime Minister However, reading a couple of articles last night privately although a number of Tory MPs agree with some of these Kind of rebels if you like within the party They have said they were ultimately side with the government for one last chance But they've kind of threatened that if he delays it again, then there'll be a really big problem Whether that's just words and threats Probably I would imagine so because if then the case rates for whatever reason got particularly worse They're not going to really be in a position to argue it So again, it's kind of politics at play very importantly though for Johnson There's very little risk that he could lose The vote on extending the government's lockdown and the reason for that is the Labour Party the opposition so cross-party vote They've already said they're gonna back the government They've already sided on the fact that look it's better to Contain the risk of potential further death than it is at the moment to reopen the economy even further And so they've already again said they're gonna support the measure. It's gonna go through So to be honest, there's gonna be quite a few headlines talking about this because Johnson's gonna get it in the neck from a few individuals for sure But ultimately it doesn't matter so for the market's point of view from pricing it's gonna be of no real consequence Really interesting article came out overnight and it's not so much an article is an actual action Of course that came from China who've stepped up its campaign via a kind of state division called the assets supervision administration commission Must admit I've never actually even heard of that So assets supervision administration commission and they've basically come out and said to rein in raw material prices by Expanding an oversight of commodities trading by state firms to overseas markets And they're pledging the nation's reserves or to release the nation's reserves of base metals So, you know what we've seen essentially is we've seen factory gate inflation rather than consumer price inflation in China And so as PPI has really shot high on the supply constraints A lot of that has been built on the fact that raw material prices of course is so expensive We have seen in recent months or bit They've kind of come off their highs iron ore copper these types of things trading at really high levels So they're basically looking to flood the market with some of their reserves in order to suppress that to control some of these inflationary threats So the national food and strategic reserves administration in China will soon release state stockpiles of metals including copper Aluminium and zinc and so, you know, this is quite an unusual move tactically obviously it makes logical sense, but you know Normally if this were to happen in any normal sense, you would see quite a significant hit to these metal markets On the back of this type of information. So definitely keeping an eye on some of those base metals and throughout the trading day today China has of course accelerated these efforts They're trying to look to tame these rising inflationary pressures as I just said so Timings wise it does kind of make sense But nonetheless, I think it does come as a bit of surprise because it's quite an aggressive move to do so to be so Interventionist in that way, but typically that's more akin to someone like China than it would be in the Western world So to speak on the geopolitical front I also think that tensions kind of anti China are definitely worth being vigilant for going forward because it seemingly the tensions are Simmering and not yet quite coming to the boil, but we definitely seem to be heading in that direction So the reason why I say that is the US is considering establishing a permanent naval task force in the Pacific region as a counter to China's growing military strength according to sources overnight now again This is a lot of flexing of potential military muscle There's a lot of tensions of course in the East China Sea and so on so whether or not that materializes or not It's just the fact that they're talking about it. How did China retaliate in kind? And so also it comes at the same time. We've had a US EU summit, of course, Biden's been doing the tour He's been going to the G7 in the UK. He's been at NATO Russell's and now he's he's been having these US EU talks And they say in a joint statement They remain seriously concerned about the situation in the East and South China Sea Of which of course overnight has been firmly opposed by China But there does seem to be a degree of growing friction here and you know one thing you might have thought the exit of Trump and the Inclusion now of a Biden led administration might have eased some of these tensions But they're right back pretty much that where they were at this point in time and and as we've discussed many times before with a Domestic base to keep on side at home in the US which is going to keep policy quite kind of US focused in a sense of the infrastructure bill and so on We've also got foreign policy Which is going to remain pretty firm against the likes of China Iran and the like as we going towards those midterms next year of course, so yeah, not not something to spook the market right now, but It does seem that the relationship with China is pretty tense at the minute and quite fractured and certainly not Have a particularly friendly atmosphere to talk of at this present point in time Talking of that let's just have a quick look at the calendar events for today before I get into the data and so forth President Joe Biden is meeting Vladimir Putin from what I've read this morning I don't have any set times as yet But apparently they're going to be taking around a total four hours of meetings happening this afternoon in Switzerland So if you're in London, it's going to be this afternoon I'd be I'd be looking out for any updates in regard to their conversations Basically, they're going to discuss a number of different things. It's not so much about specifics or conclusions to any material outcome of these discussions it's more about the atmosphere surrounding the dialogue the exchange between the two At the moment then the plan is to hold separate news conferences after the summit Rather than appear on a stage together This is what happened when Trump met Putin back in 2018 if they were to appear together I mean that would be a real positive I mean that certainly would be a more collaborative effort probably not going to happen again It's more about How productive is this meeting for the relationship to continue dialogue going forward? That's about the best that we can hope for and certainly as I said Biden's been going to Meet with all of the heads of states through this G7 NATO tour and and kind of aligning everyone in this kind of opposition to that of China and Russia Which of course is all strategic again ahead of meeting Putin to show that he's got his boys backing him up Which is a very important Signal to send going into those those talks Otherwise look, let's look at the calendar for today. We've already had the UK CPI figures come out As I said, they were a little bit higher than expected and going further forward the European morning is pretty quiet. Otherwise And as to is the US session in fact, there's not too much coming out this afternoon We do have housing starts and building permits Import and export prices at 130 alongside Canadian CPI inflation data And then of course all eyes after the DOE all of the trees will be on the latest FOMC meeting now I'm not going to go into it here because as I said, I'm going to do a full rundown and coverage later on When this comes out this evening But to give you a kind of overview summary, I really like what the analysts at ING You were kind of covering there's a couple of points here that we're looking out for from the Fed one is a kind of a mission or Admission that they they've basically the economy's improved things are picking up But also what how do they feel about inflation? We are tracking at 5% on year-in-year reading. The core reading is the highest since the early 90s How firm are they of conviction behind this view of transitory? So this is the key thing we're looking out for the other key things then it's going to be of course tapering How far in advance of those discussions and what ING was saying as far as tapering tapering is concerned They think the federal reserves Jackson Hole conference in August will fire the starting gun And that will be formally acknowledged at the September FOMC meeting of when of course the next Jew Projections come out. So remember we're getting the update tonight June from March And what they're suggesting is Jackson Hole which happens on the 26th to the 28th of August Would then be a signal that they communicate then we're going to start really discussing tapering to be more formally Outlined when that September meeting takes place now I agree with that in terms of the sequencing and then QE tapering likely the announcement to come in actually deck So you know one thing to understand about monetary policy It's not about shock and all it's the complete opposite. It's about controlled forward guidance communication So they might well tonight hint at the fact that there's been more Discussions surrounding tapering, but I think it will probably be a little bit of a light touch in a way And then they'll use Jackson Hole which is 11 weeks from now when they're going to be equipped with more information About how quickly vaccines are being administered in the US how much the US economy has Subsequently reopened that's going to impact then numbers that we're going to see over the next kind of two months over How many jobs are returning? To the market and then also we can judge how sticky or not and have we seen this peak now in these short-term Transitory inflationary pressures. So to me it makes absolute sense to kind of try and just Yes, we likelihood is there are discussing this stuff. They've got to manage that communication very Carefully of course ought to spook the markets tonight, and I think they will do that. I think power is very good at doing that But then Jackson Hole will kind of be a little bit more starting the gun Gets formalized in September then actually start really putting it into into place as a formal tapering announcement at the end Of the year for it then to happen at the beginning of 2022 So these things are quite incremental in the way that they play out then the final thing of course is the dot-plot We're looking out for then Do they change then the composition of dot-plots that sees basically instead of a rate hike after 2023 gets brought forward to in 2023 so that key as well amongst then how much do they upgrade and most people are of the belief that it's really The end of this year's projections that need updating for growth and inflation And how aggressively those are kind of brought up might dictate then and influence people's perception about how quickly tapering might occur So these are things we're going to kind of look at from an at-top level overview I'll go into it though all in much more detail tonight. So remember to join us for that, but Gonna end it there any questions at all. Just let me know pop a question in the discord room if you're on Amphi live or a Comment on the channel and don't forget to like and subscribe and I will see you later on today. All right. Take care