 Hello, hope you are well and was on holiday last week. So as ever pretty brutal week I hear in global markets. So hopefully the things will settle down a little bit now. I'm back in the hot seat So hopefully everyone survived and as well But of course we're gonna talk about the U-turn we've heard from the UK government who basically have done a complete about turn On the 45p tax rate. So I'll talk about that in the moment We'll also look at the pound on the charts, but we're also gonna talk about a few other things in particular in the stock space We've got a bit of an update on the pretty sweet situation Their shares are down another 9% today after what is looking like some speculation The next systemic risk potentially to the financial system I think that's a little bit overplayed But we'll discuss why and then we're also gonna look at Tesla Their deliveries for Q3 were lower than expected and their shares are down quite significantly in pre-market trade to get the week underway You've also got an OPEC meeting happening and WTI crude has managed to top back above 83 bucks of barrel this morning in anticipation of perhaps some of the biggest production cuts We could see since the onset of the pandemic later on this week on Wednesday Not only that economic data non-farm payrolls obviously inbound on Friday Which means we get all of the major US data manufacturing service PMI numbers on Monday Wednesday ADP national employment also on Wednesday all to come this week So let's get stuck in and talk about the U-turn on 45p tax rate from the UK Chancellor which came out this morning the move to scrap That 45p rate for people earning more than a hundred and fifty thousand pounds per year became clear after dozens of MPs Would refuse to back the move in the commons, which has forced them the hand of the Chancellor to come out this morning He's done basically the rounds. He has refused to resign. He's also refused to outright Say that this was a mistake. He's instead said it was a distraction against then the very Kind of pro aspects of the the growth Potential coming out of the overall tax cuts that have been presented by the government just last week The market has somewhat validated the move to some respect I mean earlier this morning. We did see a little bit of a pop up in sterling currency You can see here I'm looking at the British pound against the US dollar on a 30-minute candlestick and you can see this big fat green Candle here first thing in the morning when the statement came out Actually pushed us back above where we were trading Towards the the highs of the end of last week. We have faded that a little bit Discussed why in a moment but in the rates market We've also had some further validation in the change of policy from the government the markets now Pairing back a little bit expectations for the severity of the rate hike They're anticipating from the Bank of England in November now pricing less than 125 basis points Versus the 140 basis points on Friday and as much as 200 basis points on September 26th A few days after the UK mini budget wreaked havoc in the financial markets But one thing here just looking at the pound is where we are at the moment We've managed to trade back close proximity to 113 handle in overnight trade And that's pretty much an entire full reversal of the shakeout that we had when sterling hit record low levels against the US Dollar down at the 103 mark and obviously then following on from the intervention from the Bank of England And the steps that they've taken as well to steady the ship, but yeah one a mighty ride We've been on but actually we're at scratch pretty much despite all the fanfare that we've seen around this now a couple of things for one Obviously what's happened here with the reversal on the U-turn on 45p tax rate? I think that's entirely political We saw last week then The divergence in polling the most that it's been in a labor lead over a Tory government since going back to the late 90s When Tony Blair was first coming in under new labor So I think change needed to happen particularly in the context of a cost of living crisis People aren't able to pay their energy bills They're not able to then facilitate their mortgage payments given a lot of market resets that we're seeing with higher rates expected And so on and so forth. So it was such a badly Timed move on that specific element for sure So this is entirely political and I say that because I don't actually think it makes a great deal of difference from an economic Perspective and the reason for that is the 45p tax is a very small proportion of the overall tax cuts announced in the prior week And even smaller when the energy subsidiaries or subsidies, excuse me, and we're also taken into account So from a macro perspective I don't think what's happened this morning makes a great deal of difference And so while the pound has had an initial positive response, I think it's negative on two fronts the first front I think is the fact that It doesn't make a difference to the extent of the fiscal loosening the required net government bond issuance Or the UK's external financing needs So on that side of things and this being just more the optics on managing the political side of the equation I don't think economically this makes any difference at all So the direction of travel still is a negative one for the reasons that developed in market prices last week The second is credibility Um, I think that the fact that they've made such a Fast U-turn or what was a signature policy move in the mini budget or the not so mini budget that they announced I think is very damaging for credibility and particularly for The judgment of the new chancellor, but also for the prime minister for letting that take place in the In its first instance. I just think overall net net it's a negative on those two fronts so Going to move on though from that and let's talk about a few other things and going to have a look at oil prices And this is having a look at the jump up in market prices and electronic trade overnight And in fact markets have actually extended on this initial move that was seen at the recommencement of trade and we're trading above Oh briefly 83 bucks with just below there at the moment in wti front month futures and it comes on Indications that opec plus alliance is considering slashing production by more than one million barrels a day when it meets later this week on On wednesday now the reason why that is particularly significant is because that move would break out of their normal sequence And in fact be one of the biggest production cuts that we would have seen since the onset of the pandemic And the rationale there is because as we've seen a lot of destabilization at the moment in the global market Which has been at the core of it heightened recession fears on the back of Very aggressive tightening and policy to get hold of inflation That domino effect then has led to a somewhat demand destruction in the short term prices have continued to move lower Down into this kind of into the the high 70s region And so they're looking to take action and so getting ahead of further price declines and also ensuring that they keep some degree of influence over market prices And they the oil and energy producing nations will want to be staying ahead of the demand curve as well People like russia. Obviously income is important. They are said to be Backers of this deal and the Saudis as well are also said to be on board So it's just about the magnitude the size of the cut that we're looking out for in the market It's already pre positioning for that outcome this morning other things to speak of Credit suise has been a big talking point. Of course last week the new chief Who came in I think it was in july it has only been there for a couple of months jumped over the street from UBS into credit suise to try and fix What has been a pretty horrendous time for the swiss institution Has given less than 100 days to deliver a turnaround strategy It comes as the cost of ensuring the firm's bonds against default climbed about 15 percent last week And that level has not been seen since 2009 When as the shares have now touched new record lows So basically the cost of ensuring against a potential default has continued to increase Now a lot of this has come because on friday the ceo's so a chap called eric kerner Reassured staff that the bank has strong capital and liquidity position And they basically shouldn't look too much on the actual volatility in the company stock price He sent that out to employees and said that would be sending them regular updates until the firm announces a new strategic plan Which isn't going to come until the 27th of october said the end of the month So for sure you're probably going to see lots more volatility In that bank share price between now and then as well as fluctuation in their five-year credit default swaps now What's drawn particular attention and their shares have traded down as much as really nine percent in credit suise shares again this morning Has come because there's lots of parallels between some of the phrasing particularly About strong capital base and liquidity position that the ceo said In his internal memo as to what the leeman's chief was saying just before we saw the demise of that financial institution And so there's been lots of rumour mongering about could this be the next Kind of leeman's moment. Is this a systemic risk to the financial system? I kind of bit. I'm very reluctant to go that far at this point in time Uh, I think that they'll be looking to follow the template and probably I would say overall A similar path what we saw at Deutsche Bank several years ago Who were in a fairly similar spot and there were lots of people talking about these systemic type risks to the system It was looking very precarious and the idea of them being too big to fail on the table they ultimately after severe restructuring and Much effort money and time have now managed to turn that tide and credit suise will be looking to do The same so we continue to watch this space more probably volatility As I mentioned in anything to do with that firm anticipated over the next coming weeks Then you've got tesla They came out over the weekend announced lower than expected ev deliveries in the third quarter chiefly blaming Chalenges over shattering its record record deliveries. They in fact delivered 343,830 vehicles. The very problem was the market was looking for around 360,000 So in pre-market you can see here for tesla their shares are trading down about four and a half percent looking to open up at around The 253 marker at this point in time As I mentioned for the week ahead plenty of us data to get your teeth into All setting the scene then for us non-farm payrolls, which we'll get on friday Expectations for us jobs growth are for it to have slowed again to 250,000 from around 315,000 prior analysts forecasting around the 175 to 350k marker Either side of that. I don't really see it really shifting the needle a great deal for fed expectations for future rate rises The unemployment rate is predicted to be unchanged at 3.7 percent according to economists It does mean though. We get manufacturing PMI from the ism this morning. We'll get the Related services figure later on in the week. We've also got us factory orders tuesday adp national employment on wednesday And weekly jobless claims as well as per usual on thursday Other few other things just to mention You've got east few minutes on thursday and both the rba and the rbnz So australia new zealand central banks have their rate decisions this week And both are expected to hike interest rates once again, but that is it So thanks very much for watching don't forget to like and subscribe to the channel if you're not already done So and I will see you next time. Take care