 Okay, very good morning to you Wednesday the 4th of August So hope you're doing well and going to run through some of the major news from close on Wall Street overnight in Asia because there's been some noticeable movements higher in Hong Kong equities specifically coming out of some renewed rhetoric on the gaming sector which we were talking about yesterday and That's helped to lift a little bit the equity sentiment going to the UK European Open We're then going to talk about some comments out of Feds bowman somewhat contradicting Contradicting excuse me the more hawkish commentary you've had from Feds bullard and Waller more recently Then we're going to talk about something called the Bank of England shadow NPC I'll explain more about what that is in a moment And then we had all of the tree numbers last night which set the scene for the DOE release later this afternoon And then we've got some important economic data as well on the Canada today namely that being US ADP national employment often seen as the precursor for the Labour report payrolls on Friday and We've also got ISM data as well coming out in the US this afternoon so that's what's on the menu for today and quick look at the charts to give you an idea and flavor for general market sentiment and The FX market fairly flat the dollar index trading roughly unchanged So nothing too exciting going on and to get things underway at the open here in Europe Just gone through 7 a.m. In the major pairs top left Euridolin cable from an equity performance the Equity market continues to remain pretty buoyant yesterday After the dip we get met with the usual drive So dip at the open rally for the rest of the session It's kind of been a fairly familiar pattern of recent months and that recovery last night going all the way into the close Actually then running into that trend line you could see on the third test Pretty nice respects of that on that last little push-up for the final Half an hour of trade and we just faded in in Asia Pacific trade until Europe have come in and we're coming back up So again, I'd probably just be keeping an eye on any further upside here back to that level on the trend line And he break above there obviously just looking at around that 44 20 level the previous high that we had Back two days ago So at the beginning of the week and then that previous high that was printed back at the end of last week So equity sentiment just a little bit positive going to the open. So the DAX as well up about 72 ticks this morning Otherwise elsewhere gold and tea notes pretty flat overall as to his oil Although oil did bump a little bit lower, but very marginal So if I just mark it up with a rectangle this candle here down at the bottom That was the latest API crude or infantries, which you can see here We had a headline drawdown of eight hundred and seventy nine thousand analysts We're looking for a much deeper draw of three million. So a little bit more bearish On the top level number bump price just marginally lower overnight But in context obviously oil has been drifting lower of the last two sessions quite aggressively on a combination on the daily chart I'd say of profit-taking given that sharp run-up that we've had and a re-evaluation about the general state of the economic growth given the fact of COVID still not that COVID has completely Diminished any sort of recovery. It's just going to delay the timing of it Given the spread we're seeing globally at the moment. And so people just re-evaluating the demand implications for that in the oil market But look, let's get straight into the news and talk about a few different things So last night on the close on Wall Street. It was a pretty positive finish So kind of a double whammy positive there and then some commentary overnight in China Which helped lift that specific Domestic market so closes on the S&P and Dow were around eight tenths of 1% and as that pretty similar about point six five Hong Kong shares rally the Hong the Hang Seng tech index was actually up in excess of three percent And obviously that's been seeing a high degree of volatility in recent weeks given the crackdown going on from Beijing Around cybersecurity and it came after Chinese state media tempered language attacking gaming companies Which helped bolster 10 cent who if you remember the day before fell around at 11% The people's daily they basically published an editorial in its overseas edition that stressed the need for government schools Families and broader society to work together to better protect children from excessive gaming That sounds a little bit better than taking opium so yeah, definitely that they've They've softened that rhetoric but to me so it feels almost like watching some kind of like Netflix mafia episode or something where the kind of the mafia boss comes out and Technology in education have stepped out a line and they get dealt with Accordingly and that sends a message out to the rest of the people not to mess with you And then you you know you say something very pleasant like what they've said overnight But everyone knows the situation here and what I would suggest is that you know the gaming industry either falls into line or Beijing will take action in the future. So yeah, it's it's Relief I guess in the short term Chinese equities are highly sensitive to this. There's a lot of nervousness I would say in that geographic region about what sectors going to get hit next and so Yeah relief for now, but everyone I think knows and China have made the point now That they're serious about this. So, you know, let's see The other thing we've had overnight is Ali Baba They did report yesterday and notably their revenues missed estimates for the first time in over two years Actually revenue number came in at 31 spot eight against thirty two point four three billion US dollars And then from a data perspective, we did also have some encouraging data overnight in China where the occasion services PMI came in at fifty four point nine analysts really anticipating a fifty spot six reading So that's way and above expectations So another positive element perhaps but the July readings were buoyed by a successful containment of COVID-19 cases in southern China although remember what's happening in China at the moment They're implementing new restrictions across several provinces, which means then the latest round of outbreaks that have been seen late July Going into August is likely going to hurt that August PMI reading So I don't think this is necessarily room to get too excited because it's probably going to pull back given those aforementioned reasons the other thing that's been watched is this which is I think her name is Michelle Bowman if I'm right. Yeah, Michelle Bowman and this is a voting member on the federal open market committee and I thought these were quite interesting and it kind of in fits with what I was saying in the briefing this time yesterday Which was I was talking about Waller and Waller had come out talking about look if we get two good jobs reports We could do tapering as soon as October And this was very much in fitting with the hawkish comments seen on Friday from Bullard but then Feds Bowman's come out and said it'll take Time for people to re-enter the labor force and employment is still far below Where it was despite recent gains more work needs to be done to get the US economy back on a strong footing now Bowman tends to hit just a bit of a reminder on the hawk dove scale. So, you know Bullish Bullard is right out there as an outlier on the hawkish end of the spectrum and and Waller has obviously been readjusted to follow suit now sitting on that hand side, but Bowman typically sits center very much aligned in in the center group here And so these comments are not that surprising But I do think it goes some way again to explain the tactical approach from the Fed in order to keep the markets Honest and we're having a bit of a recalculation at the moment about the impact of COVID-19 and the overall state of the global economy Given the difficulties in containment of the Delta variant and so the market I don't think wants to get up I think the Fed doesn't want the market to get too complacent the Fed aren't ultimately going to take action at some point So again, it's the same as what we heard before outlying hawks saying hawkish things But the center remains pretty fixed on a predefined course at this point in time The other thing then is the something called the Bank of England shadow MPC now for any Students watching this if you've never heard of this basically the times have always had what they call this shadow MPC Which is basically a collection of potentially former MPC BOE officials Head economists at a major financial institution, perhaps It could even be a journalist the Times Economic Editor might be on the board It could be a person from industry from different types of companies Essentially, it's collection of well-experienced people within or operate within the UK market And they are themselves then mimicking a board in a similar fashion then to making a judgment call on policy And they released their outcome the day before we have a Bank of England meeting now back in the day I'd say when I started my career back in 2006 The shadow MPC used to be very meaningful It certainly did used to move the market. I've not seen the shadow MPC move the market For a long time and at the moment I think that's still the case predominantly because there's quite a large disconnect here been seeing a pattern over recent Shadow MPC calls where they're nearly always erring on the side of being way more hawkish than the MPC are So that definitely context needs to be applied The Bank of England they said should scrap the final 50 billion Pounds of its plan QE and deliver a clear signal that it's worried about rising inflation So again, very much on a hawkish side It comes in the context of course with the BOE meeting tomorrow We're a member down because how Dean is left So there's only eight of them and the split then potentially is going to be six two Because Dave Ramstein the deputy governor Michael Saunders an external member have kind of hinted that they may call for an Immediate end to QE because of inflation concerns. So for me what the shadow MPC have said doesn't really make a difference I wouldn't see it as really being too much of a Fundamental element to really shift the pound today six to split come would come as very little surprise Given those comments those two guys have made in recent weeks We've already looked at the API's so I'm just going to briefly talk about the oil Market from a different perspective. So let me just flip over to my charts here So you can see oil again on the 30 minute and how we're trading at the moment and Aside from the oil infantry data Yesterday saw reports of at least four ships and tankers up the coast of UAE Losing steering with the Panama flagged assault princess reported to have been hijacked Now the times have noted British sources of working on the assumption of Malian military Or proxies have boarded the vessel, but that has since been denied by Iran The US military is expected to reposition at least one vessel in the vicinity of that to keep it closer ion activity in the region So yeah, not really moving oil. I'd say right now But definitely worth keeping an eye on as we go further forward in time through the session and the rest of this week All right quick look at calendar for today to wrap things up So we do have the various PMIs coming out of Europe this morning and the UK, but these are all final July readings So really the emphasis today is on the US session ADP national employment Of course seen as a heavy weighted precursor for the labor report on Friday That's expected to come in at 695,000 on the headline print and then we'll look out for the ISM US service number Expected to be fairly unaltered from the prior reading if not a small improvement But as ever we'll keep an eye on the employment component which did dip into contraction last time at 49.3 as again Another value input as to our assumptions then as to how the the jobs payrolls report will come out We've got the DOE oil for trees as normal at 3 30 flits Clarita a voter speaking at 3 p.m. London time and then some of the markets looking out for as well Just given that the depth and breadth of issuance from the US government at the moment The quarterly refunding announcement is happening at 12 30 later on today, but that is it I'll leave it there any questions at all. Feel free to drop me a comment. Otherwise. Have a good day. Thanks very much