 Okay, hello. Welcome back to the channel and our look ahead for this week and boy Have we got a a week in store that's central bank decisions. You've got the ECB the Bank of England the RBA We've got non-farm payrolls. So that also means things like ISM manufacturing non manufacturing ADP weekly jobless We've got plenty more to watch in terms of the Russian Ukraine situation with potential sanctions coming by where the US and the UK and other Western nations and We haven't even spoken about earnings where we've got 109 S&P companies coming out this week And that does include the likes of meta also Amazon as well coming out as well as alphabet or Google To hit the hit the tape before I begin big shout out to Rafa Nadal absolutely incredible comeback and Greatest of all time drop a comment below. Let me know. What do you think Federer Nadal Djokovic? Who is the goat? You've got to say Nadal's taken it here 21 also for any US followers Tom Brady also Also calling it a day after an amazing career So yeah, otherwise back back to business and let's talk about what's happening in markets this week And first off really just capping where we left The kind of Fed rhetoric which was this idea then on the coattails of the Fed meeting that they're not ruling out hiking at every meeting Now that has somewhat diluted then the impact of comments such such as these and one thing to remember as well is that from a Fed tactical point of view This is often what they do when they start to drip feed in new ideas of potential policy direction in the future They'll do that through non voting members of which Raphael Bostic who you can see here is one of those Tends to also lean more center to the hawkish side of the kind of policy spectrum So that's not too untoward, but he said that the Fed could opt to raise this benchmark rate by 50 basis points A more aggressive approach to taming inflation is needed But he did stick to his prediction that three-quarter point increases starting in March is the most likely scenario But 50 basis points obviously the market has been priced As aggressive as that and we've also had banks like the Japanese Firm Nomura who are already putting their name behind the 50 basis point call for that March meeting for rate lift off And so others have followed suit in terms of the the rate hiking number Jan has the ass of Goldman Sachs chief economists have updated their call now predicting the Fed will lift It's near zero benchmark rate by 25 basis points five times this year So they've gone from three to four to five now in pretty quick succession That would take the benchmark rate to one and a quarter to one and a half percent by the end of 2022 of course They also say they expect officials to announce the start of a balance sheet reduction in June So also bring that timeline a little closer given the more hawkish Retric we heard from the Fed in the meeting last week just to give you a flavor on the street Bank of America The most hawkish they're looking for a meeting at a hike at every meeting So seven more eight to be delivered in the year and BMP Paribas are going for six JP Morgan and Deutsche Bank are going for five at this present point in time alongside now with Goldman Sachs So moving off the the Fed side of things But before I do just one quick chart I wanted to show you just in terms of a 50 basis point rate hike When was the last time that they have done that and so from a historical point of view You've got to go all the way back to may of 2000 the last time they went for this Stepstone approach bring the more aggressive fashion remember interest rate cycles tend to take the stairs up and the elevator down in terms of the response then usually to the comm bubble or financial crisis or an unforeseen coronavirus outbreak as what we've had so 50 basis points for me at this point in time for what it's worth. I think that will not happen I think I'll be more incremental than that albeit multiple throughout the year All right other news to get you up to speed on and talked about Goldman So gonna talk about some Chinese data official PMI data came out over the weekend it declined to 50 spot one Expectations were for 50 so basically it was in line non manufacturing gauge fell to 51 point one also just marginally above Expectations one thing that analysts have noted those that Chinese factories often see a production lull a January February Workers head home for Lunar New Year holiday and it is Chinese New Year tomorrow So don't forget that Chinese markets are closed or or weak Activity has also been affected this year by the government's orders this for steel plants specifically to trim output to reduce air pollution ahead of the Winter Olympics in Beijing which began of course just last week on Friday and of course from a government level There's a lot of optics given the the number of eyeballs that will be on that country during that Winter Olympic Games The PMI also released on Sunday Felt a forty nine point one the worst in almost two years the private survey of which that is referring to in contraction Focuses on smaller more export-oriented firms compared with the official manufacturing PMIs which were just hovering above an expansionary territory What's happening on the the Russian Ukraine front? Well This is the kind of latest headlines that you've gone on Reuters U.S. senators apparently are very close to reaching a deal on legislation to sanction Russia Over its actions on Ukraine including some measures that may take effect before any invasion According to two leading senators what they said on Sunday The Senate bill would target the most significant Russian banks and Russian sovereign debt as well as provide more u.s Military assistance to Ukraine There are still areas of disagreement apparently between these senators from two parties Especially over whether to impose sanctions on the Nord Stream to Gas pipeline, which is that highly contentious issue and obviously has big detrimental Impacts to parts of Western Europe namely the likes of Germany and so on Meanwhile on that front if we're looking at what's happening a little bit closer to home We were to talk about Russia Ukraine what the UK are thinking and we have Russian oligarchs with links to Putin Who have UK investments will be hit by tough new sanctions if Moscow invades Ukraine's according to the foreign secretary You can see here Liz trust who will be talking at the House of Commons on Monday So for once she's not talking about Brexit She's now talking about UK and Russia for a change and then the final kind of headline from the weekend before we look At what's in store for the week ahead on the schedule was in Italy and Italian lawmakers of re-elect is the incumbent Matarella as head of the state ending a week-long stalemate over the selection and ensuring the survival then of Mario Draghi's Government really goes to show the kind of status quo I guess of how messy Italian politics has been for quite a period of time They still have this kind of technocrat government holding in place But it's been Mario Draghi and that will continue as far as markets are concerned They typically like continuity and so not looking for too much reaction on the back of this development And then just before talking data, we do have earning season as I mentioned So just to name some of the big names as we go through the US throughout the week pre-market on Tuesday Exxon mobile UPS aftermarket lights of alphabet or Google AMD Starbucks And then on Wednesday Aftermarket meta cool coms lights of Spotify as well and on Thursday. You've got Nokia Pre-market Merc didn't say Nokia still reporting earnings on on their own. Yep. They are still alive Even in 2022 and you've got Amazon probably the big one So kind of three big giants that you're looking for Tuesday alphabet meta on Wednesday Amazon coming out on Thursday and then Yeah, don't forget before I talk about the year ahead Gong Hei Fat Choi for any Cantonese listeners. It is the year of the tiger That does mean that Chinese markets They will be closed for the entirety of the week and also Hong Kong shut for the best part of it as well So do bear that in mind in terms of the overnight session But in terms of the calendar really kicks off in earnest quite quickly the beginning of the week We do get the flash GDP numbers from the eurozone and this follows up then on Wednesday When we get the CPI numbers and then we get the speed meeting happening on Thursday So a busy week in the eurozone Eurozone flash GDP will be closely watched to give a sense on how big the impact of the fourth wave the coronavirus being has had on the eurozone economy and then the Flash CPI is also during Wednesday ahead of the speed meeting as mentioned and expected to show a modest decline in January Although gas prices are likely to elevate inflation pressures Analysts at ING note that German VAT effects will jump out of the numbers or drop out of the numbers and oil price base Effects will also play more favorable to see then a top-level decline in that figure Moving further on though going into Tuesday morning our time. So Tuesday in Australia, we do have the latest from the RBA where all but 117 analysts polled by Bloomberg expect the central bank there will end quantitative easing the bank is also releasing updated estimates on Friday that are likely to see an upgrade to the outlook for employment and inflation and of course don't forget due to the calendar When they run into non-farm payrolls on the first Friday of the month That does mean that we get also jobs data in the US but ISM manufacturing comes out on Tuesday Expected to pair a little to fifty seven point five from around Fifty eight point eight the prior time and while the street expects the service headline on Thursday to pair back also to fifty eight point seven down from a very hot sixty two point three and Then just looking at some other things. We do have of course OPEC So they'll be holding their regular monthly meeting Not really looking for any surprises here The group expected to continue its plans to ease supply Curbs by four hundred thousand pounds per day in March So they have this meeting to determine what they're going to do for the month ahead Delegates have downplayed the significance of the price moves. We've had of late Remember as far as WTI crude is concerned at the close at the end of last week in the electronic trade We finished at just short $89 so we are training very high at the moment, of course multi-year highs that we've printed of course in the other products in the energy space Although they've downplayed that that is a function of increasing Geopolitical risk premium as opposed to strengthening demand Fundamentals is what they're likely to put the spin on it as to then just continue to push ahead with their predetermined plan at this point in time One of the arguably most interesting Events of the week is going to be the Bank of England they surprised the markets and Hiked rates already at the end of last year and they're widely expected to raise rates for a second consecutive month at their meeting on Thursday Not so much the rate hike in itself. That's very much priced into markets It's going to be the conversation that they have about what happens there after on the process of winding down the banks 875 billion pounds of holdings of government debt purchased via its quantitative easing program Eyes also an attention will be firmly fixed on do they push back against the fairly aggressive and hawkish market pricing of five rate Hikes to be executed for this year likelihood is probably not They'll probably just keep that on the table for now and then can also push back about Against that later on down the line one would expect is the most likely outcome there as far as the ECB is concerned Much less interesting I would say then certainly the Bank of England will be both of these events coming out the same day on Thursday As far as the ECB is concerned, they're not going to change policy. That's very much expected Even despite facing a surge of inflation that's being seen at the moment Nomura they say they're economists They expect no change to policy or guidance and they think that the ECB will be in a position to begin a slow normalization of policy rates from June 2023 so you can see the big divergence we have at the moment when we're talking about the potential for another seven rate Hikes in the US and perhaps the policy rates not moving in Europe until the summer of next year never mind this year And then back to the calendar just to wrap up then of course we get the ADP national employment figure Wednesday expected at 150 you got weekly jobless claims on Thursday and that then Sets us up for non-farm payrolls on Friday The headline reading there according to surveys at Bloomberg is that the US is set to add 175,000 jobs in January compared to the 199 it added in December the unemployment rate is forecast to hold steady at 3.9% meanwhile average hourly earnings though are expected to creep up again from 4.7 to 5.2% Some analysts have cautioned that even though the headlines expended at 175 There's a risk that we could actually see jobs contraction i.e. a negative headline print and likely that's due to the highly transmissible Omicron and It hitting the leisure and hospitality sectors specifically like what we've seen in the previous waves over the two years gone by That's also likely to have also had a degree of impact in healthcare and other service related industries Of course, which are the ones that get most impacted by certain restrictions that might be in place on a state level However, even if we get a negative headline, is that really going to change the direction of what the Fed are thinking? I would say highly unlikely on two points one the inflation situation and then two the fact that if you actually look at current US COVID case rates, they have been declining and quite rapidly at this point So going further forward, there's probably enough confidence to continue down the path that they've Insinuated so far from Fed officials of the meeting last week. So that is it pretty rapid pace I know so feel free to jump on Twitter full Briefing notes are available there. I always post them every morning head of the European session Otherwise, I'm gonna let you get on with things. Please remember to like and Subscribe to the channel if you've not already done so and I'll see you for the next video that comes out later this week All right. Take care