 Okay, very good morning to you. I hope you've had a great weekend managed to avert the snow But yeah, just wanted to kick things off then with this you might have seen it Some of you I know I've already listened but if you haven't we have now officially over the weekend had approved and launched our new podcast and So in summary, it's a conversation that happens at the end of the week So at 10 a.m. London time I have a chat with basically peers ahead of trading We put out a really informal chat about what our thoughts are on some of the main things of that week So do check it out. It's on all major podcast platforms here It is on on Spotify just need to search for market watch and it's also on Apple as well I know on Apple there is an ability to rate and leave a comment as a review So if you do enjoy it, please do so it'd be amazing to really help the launch of the podcast as it gets up And running so check it out if you're watching this on YouTube I'll put the link below really appreciate your support as we get the new Podcast series underway, but look, let's get straight into things and start talking markets then this morning and Overall when I was putting together the weekend press and things were pretty quiet to be honest There wasn't much in the way of major news But if actually as I talk through the news items in the different sections Most of it is fairly upbeat I would say So Taking a look at the cross asset class mix this morning equity markets still Up at around their all-time high levels So the S&P 500 in terms of the futures in the overnight Asia pack session touching 3900 so here we are the next symbolic kind of marker felt inevitable we'd get there We did talk about this last week and the NASDAQ as well in a similar fashion oil as well following suit So on those long-term Daily higher time frames. We're right up there at that 57 36 Which is around that low point you've printed back at the beginning on the 15th of Janice support And so any breach above here for the week then the next obvious target basically is up at 60 bucks Which is 59 73 and obviously there's going to be some ebb and flow until we get to that point But you can see quite clearly here on the daily chart Just how much more clear as a target that that would be of any further run up in price up to these highs here So at that resistance level at the moment hasn't yet broken through but you can see here Some decent performance straight out of the gate and electronic trade on Globex Elsewhere metals markets a little bit higher both gold and silver The former up around three and a half bucks at the moment in the currency markets the dollar index saw a very minor gap up But still lower generally following the non-farm's weaker print that we had last week And you know that is a really quite meaningful chart technically. We're keeping an eye on this is that trendline from May The retest in November and the break we had last week, which was really important actually for Consequent movement that we were seeing where gold silver some of the other precious metals markets were trading quite heavy on the back of the Persistent kind of dollar strength We have come back obviously the weakening of payrolls We were kind of quite dollar bid going into that given all the precursors were looking very positive But if anything payrolls was a bit of a dampener and the dollar pulled back and we've kind of leveled off since then So we're still above that trendline for now And that's going to be a key level Whether or not that holds route the coming sessions as to what then might consequently happen on the major pairs in euro dollar and cable And so on so at the moment obviously those markets saw a really powerful recovery In the second half of Friday session and now we're kind of sitting there waiting for the next potential move So definitely I'll be keeping an eye on that dollar Level as we go through the week So let's get straight into it Let's talk about some of the news headlines and what's going on and gonna kick things off. We're talking about COVID-19 because There's been some positive news actually and this is what lends its hand quite neatly to this idea of something that Piers and I actually spoke about on the one the podcast on Friday, which was this kind of Goldilocks scenario and The slightly softer payroll number comparative to some of the other employment data We were seeing last week actually lends its hands to support that Goldilocks scenario Which is the economy generally is finding a little bit of momentum in the US Things are seeing some signs of improvement But not enough that the Fed or the Treasury are going to change what they're doing So you've got an improving economic picture in the backdrop of forthcoming stimulus and also a loose monetary policy Irrespective of the fact that inflation expectations continue to rise at the moment So that in itself a perfect storm if you like for just keeping equities on the on the front foot even at these very Elevated levels for the time being so this is the COVID situation Situations it stands at the moment US states on Sunday reported fewer than 100,000 cases for the first time in more than three months Citing the COVID tracking project as you can see here However, there is a slight caveat. You must be aware of here as with all things to do with data Particularly COVID tracking is the weekend the way that they Aggregate those figures and basically Sunday's data is missing updates from several states Some of which regularly do not report over the weekend and some others having technical difficulties. So The point here though is that COVID cases in the US are decreasing So irrespective of the symbolic value of it being below 100,000 for the first time in a couple of months Prior day it was teetering at around those levels. So the point still remains We're seeing a continuation of a decline in new cases in the US Hospitalizations themselves were the lowest on Sunday since November of 19 19th 2020 Moving elsewhere another country that definitely was in focus because of the fact that then it's as a result led to further Restrictions which is obviously impeding things like mobility and consequently the economic activity situation is in Germany in mainland Europe and Germany added 8632 new COVID-19 cases at the weekend on Sunday That is actually the lowest in four days. They are number held below the key level of one for a fifth day And that lends then it's hand to the prospects of decreasing COVID cases going forward in Germany The economy minister though did comment at the weekend Dampened hopes for a quick end to social restrictions saying it could take another six to eight weeks until shops and restaurants Will be allowed to open which doesn't come as a surprise that that seems to be the kind of timeframe You'd be working with need to see consistency in the decline before you could take that type of action and then finally France France if you remember was seeing Very elevated numbers that was putting the country at risk only two weeks ago if going into its third national lockdown They decided not to follow that kind of path in order not to place too much more Pressure on their hospital system infrastructure But France reported a fall in new COVID-19 infections on Sunday and that marked the fourth success Successive day of declines. So overall these are quite key areas in particularly lights in Germany and France Which has been getting materially worse for quite a period of time Everywhere is declining in COVID cases as we know then as the knock on effect We tend to then see over a period of weeks as long as those trends continue decrease in pressure on on the hospitals And also then the consequent death rates. So some positive signs there and That does come as there was some attention drawn to an FT article that came out I think this was on late on Saturday when I saw this But let me give you the overview AstraZeneca's vaccine has shown Limited efficacy against mild disease caused by the variant first identified in South Africa According to early data in a small-phase trial Results have not yet been peer reviewed. The official results are due to come out later today Know that none none of the more than 2000 mainly healthy young patients in the study died or were hospitalized though and the sample size in itself is From a scientific point of view considered to be relatively small and just over 2,000 people. So a couple of things here We have seen from other drug data We saw that more recently from the likes of Johnson Johnson, for example that the efficacy rate does Have a slightly fluctuating Performance depending on what it is whether it's the base kind of COVID-19 or it's a variant like the UK South Africa Brazil and so on And there have been a variety of generally different rates lower than for some of the variants So the fact that this doesn't have any impact is a kind of a step further if you like in a negative way However, the one of the important things here is that it doesn't lead to basically more Hospitalizations or deaths and that's a really important point when I had a conversation with one of the guys last week That we were trying to stress is it with all of these drugs even though efficacy rates might fluctuate from say 65 70 up to 90% the idea here is in terms of the rollout programs that the the death and Hospitalizations are not actually impacted by these vaccines of which the former is actually 100% proven across all vaccines once you've had it so Yeah, I wouldn't read too much into this I don't think it's a big headwind or a negative And as we know a lot of these pharmaceutical companies are already trying to adapt The the kind of vaccine makeup in order to have more higher effectiveness against some of these other strains Because that is something they're gonna have to do going forward as the virus continues to mutate over the long term So yeah something to be aware of not something I'd be particularly spooked by At the market open today Looking elsewhere then talking of stimulus There's a couple of things the US Senate voted of course 51 versus 50 To pass the budget measures to adopt and fast-track Biden's stimulus plan which starts the reconciliation process So in terms of timing how Speaker Pelosi hopes the House can send the COVID relief package to the Senate within the next two weeks So that seems to progress at this point And then over the weekend the newly appointed Treasury Secretary Janet Yellen has said the US can return to full employment actually by next year If it enacts a robust enough coronavirus stimulus package That without adequate support could take until at least 2025 for the labor market to fully recover So this isn't new really from Yellen. It's another kind of call to arms Politically timed with the passage of the US Senate vote that went through as well to fast-track the Biden stimulus and just repeats what she said before But it just goes some way to show that you know supporting this economic underlying momentum is further forthcoming stimulus So hence the reason why then you are seeing a little bit of this at the moment, which is people's General view of inflationary conditions is continuing to tick higher And that's what's kept the US 10 year moving lower at the moment as US yields Continue to rise and the US 10 year inflation break evens hitting their widest level since 2014 so Again, I don't personally see too much of an issue with this happening Because of the fact that I don't really see much in a way of a sustained Move in inflation and I'll talk about that a little bit more In a moment because we've got US CPI coming out this week and one of the factors That's going to really elevate that CPI reading this week in the US is the fact that oil prices have moves Higher very quickly and that energy underlying components going to really inflate what that inflationary condition looks like But again, that's not a sustained thing and that's just a reflection of given a relatively low base of which we're coming from include oil prices And so this idea of inflation. I think still being Somewhat of the understanding that it's gonna Definitely go higher in the period ahead, but then will fade or at least Become more controlled as time goes on As The kind of as a as I'll talk about there's a couple of stats and things to be aware of so I'm not too Concerned by this. I'm definitely not in the camp of thinking that we should be panicked by inflation I'm definitely in the camp of that. I see it as a temporary thing and given the flexibility Ultimately that the Fed have now an inflation average inflation targeting allows then you these types of figures to run hot for a period of time and for a fairly lengthy period of time before they would ever consider taking any course of action, so Something to watch but not something I think to sweat about at this point in time The other thing on a stimulus side from the UK worth noting then as we get closer towards the beginning of March about months time We hear those budget from Rishi Sunak the Chancellor for Sunday times was reporting at the weekend Sunak is to extend furlough and business support measures when the budget comes out later So again another another real positive. I guess in terms of the UK, which is somewhat being cushioned by the success of the vaccination rollout program But if the government continues to provide this roll over a stimulus That's only going to help support the economic kind of narrative at the moment in the UK And then elsewhere just taking a quick look over at Europe before we look at the calendar for this week Christine the guard spoke and she Warned stimulus must be removed only gradually she went on to say that our commitment to the euro has no limits We will act for as long as the pandemic is causing a crisis situation in the euro area DCB is due to publish What basically their new quarterly forecast next month and several members of its governing council told the FT at the weekend that they believed that Growth of three point nine percent this year looked realistic Even if the short-term recovery was delayed However, one council member said there's a big downside risks was the vaccination delays new more infection Infection strains of the virus could force governments to restrict curbs in place for longer I don't think that comes as much of a surprise there But ultimately Christine the guard kind of using a coining her own whatever it takes kind of phrase And this fundamentally could be another thing that if as long as dollar index can stay above that trend line Keep the screen back a little bit firmer from some of its recent games Then this should be a counteracting or this should be a forced away on the euro to some extent with the ECB are just willing to do You know as she said not remove anything too quickly do it very gradually That would play its hand to a more downward directional playing in euro dollar So technically I'll be interested to see how it plays out this week having seen some of that recovery Late on Friday session, but in what ultimately has been a lower trending euro of late Talking of Europe gonna talk a little bit about Italy Draghi will start a second round of talks starting today with different political parties It's expected to meet trade unions and business lobbies as well And let's just have a quick look at BTPs this morning. Yeah BTPs are Still trading up again We've had another well, let me just quickly show you on the chart Just so you get a sense of how positive the market has viewed the return of Super Mario So here we were before he got confirmed You had the big gap up in price from this time last week And now we're right up here at this point trading up retesting around the high that we saw Towards the back end of last week Which is just short of its respective R1 at the moment So yields in Italy continue to decline that domestic situation Looking to come to some kind of Progress on the political instability in action from the breakup of the deconti Coalition and what we have here then is that assuming all talks go well Draghi could announce his cabinet picks this week before facing confidence votes in both houses of Parliament Let's give you an idea. There was a poll done by the Republic on Sunday and It showed that more than half of Italians would like Draghi to remain in power until 2023 which is when the actual next Schedule general election is to take place in Italy And I would say if that were to materialize and here's to be in place for the next two years The market would probably see that as very favorable And that would probably then help suppress Italian yields and keep things relatively calm and any risk factors associated with snap elections and so on Quick look at the calendar then what have we got today's session is pretty quiet Just going to quickly note that you do have Bank of England's Bailey giving evidence of the Treasury Select Committee whenever Bailey speaks at the TSC. It's always a dull event. It's more Central Bankers reporting to a select group a committee from the government in terms of the Treasury Department It's really about conveying the decisions that they've already taken so very rare as anything new come out of this But just be aware Bailey does speak again later on gives the mansion house speech on Wednesday Sometimes the mansion house speech has been used as a bit of a platform to say new kind of ideas on Economic picture or policy. However, given the close proximity of the BLE was just last week I don't anticipate much coming out of that the hot topic of kind of negative rates was very much kind of Not mentioned particularly explicitly and hence more we had that sterling rally over the last Thursday Otherwise going back to the calendar. So Monday Tuesday things are fairly quiet. I've got German trade balance coming out Tuesday morning Then going into Wednesday is really kind of one of the main day-to-day is because you get the US CPI figure Expected to be lifted primarily by a 10% increase that we've had Let me just quickly scroll up to here. So this is Wednesday here US CPI Yeah, expect to be lifted primarily by a 10% increase in gasoline prices Despite the outlet for rising inflation ahead ING have noted at the weekend in their latest note that assuming a bottlenecks in production and freight Arectified the ongoing sizable pool of available labor should limit wage pressure I mean CPI settles back down to two and two and a half percent for much of next year So as I said that in combination with average inflation targeting I think we'll keep investors calm over this this Development that we're seeing in the likes of the bomb market where inflation break-evens are moving higher I think this is definitely a reflection of reality and also with the force coming more stimulus however for those aforementioned reasons as a ING were mentioning is why I don't think that it's anything to get too spooked by at least for the time being otherwise Fed chair Powell to speak at the economic club in New York again Sometimes is quite an interesting event happens on a yearly basis worth keeping an eye on that's going to be Much later into the into the days. So I think yeah, the GMT times here So 7 p.m. And then Thursday very quiet initial jobless and then Friday equally so not too much coming out In all honesty from a set data perspective this week On the earning side of things there are 77 S&P 500 companies reporting three of the Dow However, most of the index movers have reported now So this is kind of everyone else if you like from a more mid caps sort of size couple of names Twitter Cisco GM Coke Pepsi Disney so there's a few to to be aware of but overall it's not gonna be something that's going to really shape and define Kind of global sentiment at this point but earning season overall has been another Kind of silver lining element that's helped this equity bid back to all-time highs because irrespective of the the stimulus The policy the economic momentum that we're seeing some of the data points The other thing has some of the some of the earnings have been excellent Particularly the likes of the mega cap tech. So hence the reason why we're trading it where we're trading at the moment And that's that's pretty much it. So that is the wrap for This the briefing this morning any questions at all feel free to drop me a comment again Please do check out the podcast really would like to get as many people plugged into this because it's a really informal Chat a little bit different from perhaps what we normally put out. So hopefully you enjoy it and yeah, have a good week ahead Thanks very much guys