 Okay, very good morning. Happy Friday the 19th of February. I hope everyone's had a good week Usual routine going to get up to speed look across the charts and some of the headlines from overnight to hopefully give you a bit of a Framework from a fundamental perspective for the day ahead But overall we had a lower close on Wall Street last night We closed down 0.44% in the S&P around a similar margin the Dow and the Nasdaq So fairly broad but moderate losses seen in the US and that then followed on into the Asia Pacific Session Generally lower in the region But as you can see here in the center charts got the DAX left Nasdaq center S&P future on the right We've had a bit of a kind of u-shaped recovery in some of the short-term price activity So it's one of the first things I wanted to kick off on was this idea that this week I definitely feel like there's been a lot more conversation or focus in the media about you know our equities Jew for a bit of a pullback is the catalyst of that rising yields And that's making you know some people nervous about the ability for this market to sustain its current rally and Know an observation we talked about quite a lot is a kind of short-term dip buying and the aggressiveness of reversals And there's a few things here for one You know the the behavioral pattern of price movement that markets move faster down than they do on generally the grind back higher And yesterday was a case in point. You know, we have the jobless claims albeit Showed a deterioration in the situation in employment in the US jobless claims were above the top end of the estimates and the market came down quite quickly However, you can see here by the close on Wall Street We've taken all of that back and we've seen that on the number of occasions I mean if I just quickly put an ellipse around kind of here was yesterday This was earlier the day before the day before This was then going back to last Thursday Then it was the beginning of last week Now nearly every occasion This market goes down and almost the more violent it goes down the more violent It kind of springs back. I mean you can see here certainly in the last two sessions Definitely, you know, I wouldn't think or say that this strategy is kind of bulletproof But I think for me when you're asking that question about how does the generally the market feel overall on the balance about The the sustainability of the equity move higher I think a lot of the the reaction effect to when markets move down says it all really I think key levels to watch here are important We haven't yet over the month of February really once we broke above and out of this top end on the 5th of February It's been a pretty decent level. You can see we have Snapped through it but failed to close below it on a couple of occasions on the 10th the 11th and also yesterday's session So that's going to be a key one to look out for Over the kind of medium term quite well above there at the moment and as long as that holds I think at the moment this S&P has got a floor under it to help support it But even then, you know, if we start to pull back lower and there is more aggressive corrections And I think still probably the next level here that's most clear You'll get a degree of of dip buying and people will come in if there is an aggressive About turn in this market and you know just looking here in the S&P 3860 you've got those previous but would have been all-time high double top the break and test support on the end the push-up Which is seen as the next level so Yeah, I've not I've not lost the faith just yet Is my current perception as far as the more near-term price action is concerned again, we have been Edging down that the kind of highs are becoming lower at this point So definitely be interested to see how we play out in the US indices later on today, but yeah Back to flat basically and the DAX future in fact slightly positive. We did have in a DAX Slight breakout this morning over a trend line with the last 48 hours price action first thing We've come back down. You can see there to just test back on the trend line here This morning. So maybe you just worth keeping a half an eye on here on the DAX as well any further break on the upside There you've got around that area of those those two price points that were highs in the morning of yesterday's session And that'll be at 13 953 and then the higher move above The high that was seen kind of mid-week and then the R1 just above it Should we continue any upside there in the DAX? otherwise in the currency markets Going to go back to that chart We've looked at number of times this week, which is a dollar index over the long term Which is that trend line which I think continues to be particularly important to watch Particularly this morning where you've got the eurozone flash PMI data points Which could just be enough to given the fact that we're sat right on that trend line And it's been so important for this week really price activity in these major pairs Whether it being resistance at the end of last week beginning of this week or support as it has done over the course of the last Two sessions Now if we were to get a really strong surprise in the eurozone PMIs is that enough then to bump then the euro up Consequently the dollar down through that trend line We start to see some some continuation of the general lower trend We've had over the last 24 hours in the Dixie if that does happen Well, what does that translate into well in terms of cable here? Cable has a really nice level of support at 139 53 looking at the sterling future here That played out really nicely actually in fact in the overnight Asia pack session You can see here the response We've had a decent 40 pit reversal of that back to the kind of range high that we've been printing for this week And of course in close proximity of 140 so any push above the upper boundary of that price action later on today 140 is the the kind of psychological target above there Otherwise in the euro similar kind of setup where We've got a pretty decent line here of near-term support to price If I just move this over so you can see the areas I'm looking at here going back to the Kind of eighth ninth of the month The support area on the 12th again on the 17th before the break down the backup for the kind of pullback on the classic Before then the move back lower. And so yeah 120 89 Good level of support getting the overnight Asia pack session based on those previous reference points And as I was just saying this upside level here, which you can see has has some Previous area of significance as well for price would be key to keep an eye on 120 104 So they would be a key things I'm looking out for again, just to be clear the PMIs are strong Which would be probably a decent type reaction in euro appreciation if the German French figures are that way Because I would say on the balance the consensus estimates are for a slight deterioration from the prior month Given the fact that really Vaccination rollout in Europe has been relatively slow number of those big economies are still in fairly strict lockdowns at the moment So one would think that the market's probably erring on those numbers on the side of pessimism So a positive surprise probably has a high impact value and if that does then materialize It would be quite interested to see if we do get any kind of break above those levels and then maybe a push back up You've got the R1 sat here at 21 kind of 19 just above there would start to bring in some of that range play as well from Last week and the week before up here So yeah, definitely quite interested to watch the currencies this morning otherwise elsewhere Oil prices definitely quite key. Let's let's let's literally drill down into that a little bit more and and talk about that in more detail so the the story of this week has of course been what's been going on in the US where Record low temperatures have basically resulted in a huge unprecedented loss of oil output in the US Tantamount to 40% for zero and that has then seen a dramatic rise in a lot of the energy space that gas oil prices and So irrespective of what Saudi are saying about reestablishing let's say million barrels per day of crude Really that pales in significance in the near term because the more Existential impact on supply and demand is coming from a huge monumental size loss of output short-term That's being witnessed in America. So we had a big ramp up obviously going into What was towards the end of last? Week and then we've kind of remained bid as well over the course of the last two days And then yesterday we we sold off quite aggressively now a couple of things I can update you on on this This is some of the headlines them The Texas oil patch is slowly restarting wells after the deep freeze So marathon oil Devon energy Verdant oil have begun using restored power from local grids or generators to restart output across the Eagle Ford Shale Basin that was halted by the frigid weather according to people familiar with the matter now a couple of things here then Oil traders and executives has said they hoped that most production lost will return within days And the reason for that is as temperatures rise and power becomes available They have warned that a small percentage may still be shut down longer due to repairs but that does then lead to the question of of weather and You know some of the discussions that Tim and I were having with the community on Amfly live yesterday We're about okay. What's the best ways and means of tracking this type of thing and the National Weather Service? I would say If you if you're not in the ability to pay money to have privileged access to a lot of the more granular level deep detail The National Weather Service do a pretty good job At putting out fairly frequent updates and giving you forecast projections over different time frames like 4, 8, 12 Going out to 2, 3, 5 days out temperature patterns. And you know, this is it here. So their latest update They're slow warming can be expected across the southern US going forward So temperatures are beginning to moderate in the south And so this is what's acted as a bit of a bearish factor for crude oil prices in the last several hours And that's seen the price go from north of 62 in the front month futures down towards, you know sub 59 in a price point now couple of other things then we mentioned just briefly there that Marathon Devon verdant oil they're looking to restart output across the Eagle Ford shale basin now I guess a good thing to become more familiar with then is to kind of lay of the land as far as the lower 48 states shale plays and If you're looking down here Eagle Ford is here and you can see most of this then Concentrated in the area around Texas. So Eagle Ford you've got the Permian basin, which is the largest You've got the Anadarko basin sat just above there as well. So, you know when you're mapping US oil production in and weather temperatures It's kind of similar to when you're looking in the Persian Gulf and the Straits of Hamoos in terms of let's say Geographic sensitivity. So here the geography would dictate where the the kind of deposits in the basins for shale which you need to track and so Whether or not here on the National Weather Service there continues to be very cold Wintery mix in the Mid-Atlantic northeast area. That's probably not so important because actually when you look at it It's reason why the Texas oil patch has been particular focal point. So hopefully that Makes a makes more more sense In terms of estimates a couple of things that a few banks have said Goldman Sachs kind of ratifies this this thinking saying that the deep freeze in Texas will only have a small and transitory impact on the global oil market estimating an average decline of 700,000 brows per day in February production of the lower 48 onshore crude States due to a pickup then and rebound expectations on warmer weather Expected to materialize by this weekend Citigroup estimate that as much as 1 million brows a day of Permian basin oil Output could remain offline though over the next 10 days So all in all, you know, how how would you look at oil this morning? Well? If you X out this this kind of energy Reaction will then really if you look at where we were training before some of this recent elevator price action materialized We were training around a 59 Handle and that's pretty much where we trade at the moment. So a lot of that Weather impact I do think is transitory I don't think it's long-lasting and these facilities will come back online And if there is any need for repairs or there's a period a city say of 10 days for some facilities to come back online The point being is they will come back online. We don't need to wait 10 days. The market will already price that in So I wouldn't be here thinking right. They're short. This market oil prices are going to collapse further and start Unwinding that that was the trade yesterday as Tim and I were kind of covering live At the time remember when it comes to weather tracking markets are very forward-looking And so hence the reason why we came quite aggressively off the highs yesterday Okay One other thing to mention on the geopolitical front, which I guess has some connotation for oil is about Iran The Biden administration is said to be willing to meet with Iran to discuss a diplomatic way forward Now this would be meaningful because of course Donald Trump pulled out of that accord back in 2018 much to the dismay of not just his aggressive administrative approach to Iran and But also the relationships on the issue with the likes of mainland Europe. So particularly France Germany and others So this goes some way of restoring Some of those severed links Something to just be aware of obviously this is very early days, but we'll see how that plays out But again, remember it was Obama who managed to broker that deal of which of course Biden was part of that of that particular team When they struck that accord the nuclear agreement in 2015 All right quick look at the Calendar for the day ahead Hey, you've already had the UK retail sales report come out the Month of month minus 8.8 percent versus expected minus 2.6 percent. This was for January data Now importantly, you can see look the pound hasn't really reacted and it's in it if anyone is new to markets This is why You've got to apply context to the news that you see you can see very momentary little blip couple of pips in Sterling and then reversed at the moment the key thing here is I think these these FX pairs could be really interesting If we get some slightly upside numbers as I said those PMIs that bump the dollar back down through that level I think we could see some decent upside and I'll be looking for that 140 test If not beyond in cable under those circumstances Now the reason why I'm saying about context with the sterling retail sales numbers is look we're in a national lockdown at the moment You know things are improving vaccinations are going good so far But you know, I don't think anyone had an optimistic view about the state of retail sales in January So it's just really not a surprise at all And that does go some way as well as understanding how the market generally is probably positioned for these Upcoming numbers in the flash European manufacturing service PMIs is that these generally Probably will reflect more broader expectations of pessimism and so hence our upside surprise might be quite interesting On that note, it's worth just saying that whilst I've been talking the euro in fact has now seen that breakthrough So you can see a little bit of follow-through here quite a nice pop on the breakthrough You know, let's just see how it performs. But Before looking to enter on the pullback there to get back long Definitely want to wait for the PMI data for confirmation because that data does have the ability to move the market quite substantially And it could go against your position very quickly. So you'd want to see the data there Otherwise just rounding off the calendar and other things that we've got we'll get the US equivalent Obviously for the PMI data at 245 so no major 130 is coming out of the States You then got Bank of England's Flager Barkin and Rosengren and the one I think I want to draw your attention to is Barkin I was just having a look back on my notes and back on the 11th of January If you remember it was at the beginning of that week It was the Barkin Bostick double team that started talking about the idea of having a discussion about tapering and that was what planted the seed then kind of Fueled a bit of negativity in markets about wow the Fed under this reflation review We're going to start talking about tightening and the markets didn't like it and ever since then literally the next day every Fed speaker and as per ratified in the minutes This week have come out pushed it back against that idea and they've kind of reinstalled this accommodative dovish stance so given that Barkin was The original or the originator of some of that thinking he has spoken a lot since the Richmond Fed president However, I'd just be interested to maybe keep an eye on that is part taking in a panel discussion at 1 p.m. London time Today it does have here on the calendar the Humphrey Hawkins testimony text release I'm I'll look to ratify that because I thought that was next week Obviously if it is this week it could be another Thing to look out for but largely a iteration probably of what pals been saying of late So no not anticipating any even if it is this today or next week Any definitive change in Fed comms just yet. All right, that is it a couple of things I'll be recording the latest market watch podcast with peers In an hour or so times to look out for that check it out over the weekend if you have time Don't forget to leave a rating and a review If you're listening to things like Apple podcast for example be much appreciated And then I've got a special treat for any of our YouTube community. There's gonna be a video. I'm releasing on Saturday So make sure you subscribe to the channel Hit the bell icon and you'll be notified as soon as that video goes live a midday on Saturday All right guys have a good session ahead. Have a great weekend and I will catch you in a discord room If you're not in there already, then I'll see you on Monday on YouTube. Thanks very much