 Okay, very good morning to you. Hope you're doing well Thursday 22nd of April and Gonna start off then with the close on Wall Street where we finished up across the major three indices around zero point nine percent So snapping that two-day losing streak and this morning then going into the European open Just gone through 7 a.m. Now as I'm recording this the DAX future. It's just printing session highs up 87 NASDAQ as well just having a test on the overnight Kind of late US close Asia Pacific high region in the NASDAQ to keep an eye on here in the futures As markets continue to settle after that nervous start to the week So kind of like what we were suggesting in the briefing this time yesterday that just a little bit of calmness Coming into what was I thought a little bit of overplayed in terms of negativity for the set off Given the context of just how high that we were in the equity markets and this idea I guess of you know having had this pretty strong run-up in the last couple of weeks for US equities pricing in almost Perfection if you like and then what's happened here is the global COVID situation Generally has got worse in terms of number of cases on a global level. It's just that a lot of that is very focused on the emerging Developing country kind of area and so India particularly in the spotlight Japan We have seen though in developed world country also getting worse But generally areas of course of greater magnitude for financial markets like the US And say the UK to a certain extent have been more relatively controlled But the COVID thing certainly just has been a focal point But again, I don't think it comes as a great surprise Those trends have been emerging for some time. So yesterday really just putting in a bit of a recovery Overall actually the the small cap Russell 2000 outperformed about two to one against the three usual Kind of major US indices like the S&P that down and that's that 100 Overnight in the Asia pack session then Similar kind of story taking the positive hand over from from the Americans Japan outperformed Hong Kong Australia just eking out modest gains India a laggard 314 thousand 835 new cases in India for COVID-19 in one 24-hour period is a record and Subsequently, they're their equity market continues to be weighed by that ongoing worsening situation for the time being a lot to be said as well actually on that point about this kind of two-speed recovery between the lights of the US and then These emerging market countries and and and the rule kind of necessity globally if you want to see the full strength of recovery in the second half of this year because of the demand that comes from these large Populous areas that are emerging markets and Well, no for the moment the market seen to be managing the fallout of the COVID situation because of the Nature of where the issue is arising at the moment One thing is it does impede a little bit the recovery narrative to the most extreme extent Given the nature of the fact that the demand is going to be Kind of suppressed on that that two-speed recovery as I mentioned the one thing I actually think for equities and I was talking to to Sam one of the traders here yesterday was that You know, perhaps this is what equities really need Which is there was a lot of apprehension of course over recent months about the kind of the more Solid outlook that we were really factoring in for markets going forward and ultimately that does tend to then lead to the Discussion about tapering and so on we've had that now emerged from the bank of Canada yesterday Being the first major bank to take that step But perhaps the the kind of risk then on the global level of COVID is enough to keep central banks Kind of true to their word of just holding the line for the moment And I know Canada have taken that that kind of first step I do find it hard to see the lights of the Fed and the ECB following to be quite honest And does that provide those more optimal conditions then where it kind of You've got you've got a more constructive narrative growth story going forward, but still supportive Monetary policy environment coupled with as I'm going to talk about Still a lot of stimulus coming from the fiscal side as I'll discuss in Italy and marry a dragon's latest plans as well to inject over 200 billion in a recovery package For a radical restructuring it's the Italian economy so So to just think about on a balance going forward because you know overall I still think that we go higher here in equities generally going forward Yields as well continue to remain generally lower Excuse me, so we're up around five and a half ticks Going into the moot this morning and that coming in step with generally Modest gains seen in in the equity market at the moment and gold Found finding a bit of a test here and an interesting technical level So actually worth keeping an eye on because we've just had a slight slip below it That was holding during the late Asia pack hours and early during the kind of early Or late European afternoon going to early part of the back end of the US session And that pivot on the daily Technicles as well as the high on the 19th was holding up. It's just seen it being pressured here more recently, so We're keeping an eye then for the next level of of interest down at 1788 It's about seven in the in the futures market and this coming of course after quite a nice Uptrend over the last two days. We've had in gold Having added, you know good dirty bucks to price Probably having found a target near that 1800 but a profit-taking coming in given the degree of run-up that that price has had FX markets pretty quiet as you can see here You're a dollar left and cable pretty locked in in fairly sideways price action at the moment And of course, we've got the ECB coming up later, which we which is going to be the main topic to discuss right now So what are we to expect from the ECB today? Well in summary, I'd say overall It might well be a relatively Tame event from a market reaction point of view Here is the kind of general Context of this meeting The ECB is trapped in a situation which stubbornly high coronavirus infections are forcing tougher restrictions across the 19 nation region Dampening output and leaving the economy training well behind the US that the same time progress on vaccinations and joint fiscal aid Is fueling optimism that a vigorous rebound is close I guess again people may be a bit apprehensive given what Canada did yesterday because they're they themselves are facing quite a Tricky COVID situation, which is leading to subsequent restrictions over large parts of the country and irrespective of that They chose to take that step to commence tapering. I don't think that the ECB will follow So I think that any apprehension is unwarranted and not needed at this point as far as the ECB is concerned Few other things to be aware of then what is the kind of timeline that we can be expecting from the ECB? Well, here's what the Bloomberg survey economists that was conducted earlier this month would suggest in terms of timings So July the ECB will reduce the pace of pandemic purchases So still a long way to go here Until we get that and also as well I think June generally for the likes of the ECB in the federal reserve is a really big Meeting at least at this point In time that we can see because by the time we get to several more weeks down the line We're obviously going to have progressed in really two major places the speed of vaccinations And also then what is the global COVID situation and domestic COVID situation and subsequent restrictions then As a result of that going forward Then we can have a little bit of a more clearer update to when both those central banks will be issuing their latest projections And at that point then we can see just are we in a better place? Generally, if we've seen increased vaccinations decreasing restrictions Do they need to then start talking about this reduction then of the amount of stimulus in the system? and obviously the target being these emergency measures they've that the ECB have employed like the pandemic emergency purchase program, so July then it would be interesting. I don't think you need to wait for the June meeting to know that Obviously tracking those aforementioned areas will be key to ascertaining the timing of these things as will obviously subsequent ECB speeches that will be coming over the coming weeks because There are already some of the more hawkish contingent of the ECB Talking about this this very thing already Um, I don't think that that's the consensus of the governing council at this point Beyond that then the fourth quarter the ECB will give three months notice on the pandemic program First quarter the ECB will end net purchases under the pandemic program So again to be clear they already have an asset purchase program underlying their kind of normal QE Proceedings the PEP is on top of that And so again start reducing these purchases in July Three months notice then issued in Q4 about then the subsequent ending of it as we go into the beginning of next year Now this is what what economists are predicting There's obviously a lot of uncertainties when we start looking this further forward Like the potential spread then that this situation does get worse in a lot of these emerging economies from a covid perspective and that that then Has some tangible kind of change to the virus it mutates and therefore we start to see Vaccines then when we're going into a point of requiring booster shots Which are then perhaps rendered ineffective to a certain degree against a new variant and so weather patterns would be very changing the weather conditions we know generally covid tends to Spread and be more transmissible in colder conditions. And so therefore You know, this is the timeline. We're tentatively looking at it might not actually play out in this way But this is what we need to go off and how markets are generally priced at this point So, yeah, hopefully that gives a bit more perspective again the the kind of crib sheet, of course the ing put out I did share this with the Amphi live community yesterday. I'll reshare it again later on today but this is looking at the scenario analysis and Again, just to explain this graphic So from left to right you have the the the two major economic ways of which the governing council look at the economy to Judge their decision-making process So the outlook for inflation and growth and then you've got the tools and instruments that they use Which is the interest rate the qe program and the pep and then any commentary on the exchange rate Which I don't think we're going to get anywhere near comments on the exchange rate at this point So here then the the kind of base case and I must say I agree with ing here that The language which is always if you're new to training is the language and how they describe These areas and these tools that is indicative then of any potential Movement that could be seen in the likes of the euro European equities European eons and so on And so it's the nuances that then they're hinting towards that go from up more dovish Inclination from what they're saying to below more hawkish the base case though the most likely outcome and I think Probably will happen today By by a fairly high conviction rate will be for growth Somewhat higher inflate or for inflation somewhat higher inflation this year on the back of one-off factors So the kind of year and base effects from how We were going through this dramatic drop in demand this time last year The energy price rises and so on and so forth. So inflation is going to go up But they see as a temporary pop before then kind of normalizing For the growth outlook recent data confirmed the base case of a gradual recovery So an upgrade of this if they were going to be more hawkish Would be a tilt more towards the second half of them commenting would be stronger than they're currently anticipating I don't think that they could be in a position to really use that type of language at a point when vaccinations are picking up which is positive in europe um, and coven generally has been um Decelerating for had been a worse situation just a few weeks ago, but restrictions are still in place Things are still fairly uncertain. I don't think they've got the the confidence yet to make that that leap of faith About talking that that convincingly about the future On the actual tools no change the pep size to increase if necessary. So re Reiterating that same language that they've said before the alternatives here would be on a dovish side So if dovish then would weaken the euro probably boost european equities Uh and see bond prices rise would be if they said no change but intention to increase the pep um size communicated Going more dovish these would be increasing the pep envelope to keep higher pace of purchase in the second half of 2021 Again for the balanced reasoning of what's just happening from what i've described I don't think that they will go down a very dovish option I think that's very low probability on the flip side being hawkish The governing council assessment of declining future need to ease policy further And again, I think that's just too That's just we're not at that point yet for them to have that kind of confidence to be that sure So overall, I think it's pretty bedded in this base case be aware of the alternatives And strategically plan then for the likely market reaction That might come of that But I would say be mindful of the fact that you're probably going to get this And given the fact that I don't think I'm unique in having this view or ing having this view I think it's pretty much shared across how the market is positioned at price for today And hence the reason why Unless we get a real shock and surprise It might be that the jude that this meeting Is a bit of a bridge And the ecb and legard will be looking to Try and get through this meeting without making any communication blunders Now, I know legard gets criticized quite a lot for her communication techniques But I think she'll try and keep it relatively on point relatively concise and short and sharp At least that's the advice I'd try and give her Answer the questions in as quick and short a time as possible and get off the stage Because you don't want to make a mistake and this meeting should be just a bridge them to more important meetings When we get to june and the eurozone should have to seen a much larger degree of reopening and at that point The ecb can make a better judgment on the best subsequent course of action for monetary policy all right Very brief update then I did mention Mario Draghi the former ecb president and I talked about fiscal So next week according to the ft last night was reporting that he's going to unveil 221 billion euro recovery package to restructure the italian economy. It's called the the draghi recovery plan Which should be approved by the italian cabinet by the end of this week It involves 30 billion euros of italian budgetary resources and 191.5 billion of loans and grants from Something called the next generation eu scheme according to people from the matter The next generation eu project requires member states to submit their plans By a target date of the end of april hence the reason why this is materialized right now Where this money is coming from this kind of pencil 191.5 billion This next generation eu scheme is where much of this money that draghi is trying to get is coming from Is from that recovery fund at the 750 billion that we've had agreed obviously over the course of the last year or so from europe so he's really Putting in the request at this point But it's these sorts of things this fiscal commitment and perhaps then the covet global situation which keeps then central bankers a little bit apprehensive x i'm going to say for now canada Then i think that's a supportive environment for keeping any of that runaway yield on a on the tightening of financial conditions debate on an ice And means that the the the market can kind of simmer away in a genuinely calm upward fashion That it has done when it comes to the equity market over the medium term The other thing was just on vaccines So just a quick mention jjj published their single shot covet 19 vaccine phase 3 data came out Fairly late last night. They stated it remains confident in the positive Benefit risk profile of the vaccine with 85 effective against severe critical disease as well as meeting its primary endpoints Separately, we also have this which was the serum institute of india They'll be able to raise its monthly output of astro zenica's covet 19 vaccine to 100 million doses by July from 60 to 70 million at the moment However, that is later than the previous timeline that they had said before of the end of may according to their chief executive Okay, quick look at the calendar of what's coming out today And so the european morning is very quiet nothing major coming out So really you have to wait for the the first part of the ecb, which is a statement Which is going to be at 1245 Probably if anything, that's the the more more dull part of what otherwise this is going to be an overall very quiet meeting Uh, that's expected And then the press conference will follow at 130 as usual and that's where there could be a little bit more interest Where she's got a little bit more Flexibility to to talk and obviously counteracting the general questions in the q&a format You've got the weekly jobless numbers coming out of the u.s. It could be interesting. Um, we had a 576,000 print last week that was substantially below market expectations of 700,000 in fact It was the lowest level since the negative effects of the coronavirus have really been felt since march 2020 so the question mark is, you know, can that be A consistent pattern or not the consensus estimate is for about back up to around 17,000 however that in itself is still actually relatively low Comparative to the recent weeks over the last couple of months for jobless claims You've also got existing home sales. I'm not expecting a great deal of change there from previous That's coming out at three eurozone consumer confidence flash funding for a port three as well Those are these data points as a cluster. I don't really see too much in the way of any associated risks or Potential catalyst to shift sentiment on the intraday perspective from any of these to be quite honest It really does depend on where we're at technically on some of these charts If we're at quite a key Technical point, perhaps about lies enough to bump us either way But I don't think there are any game changes on any of these three measures Supply wise if you're looking at fixed income, there's a there's a hefty amount coming on the market from Spain and France this morning and then from a u.s. Earnings perspective Yeah, kind of a three to look out for AT&T intel as the u.s. Airliners american airlines as well coming out Later on today that is it. I'm going to leave you to it and let you get on with the session You can reach me into the the amplifier live community If you have any questions at all I'll be in there throughout the day and I'll be covering the ECB live Of course with the team Otherwise, if you're watching some youtube don't forget to like and subscribe any questions. Just drop a comment. Happy to help All right. Have a good day guys. Good luck for the ECB