 Okay, very good morning. Welcome to the rundown for Tuesday the 13th of April Just gonna get you up to speed on the clothes on Wall Street, which was relatively flat What's happened overnight ages and trade data to speak of just had the UK GDP numbers out We've got German ZEW coming at 10 o'clock with US CPI at 130 this afternoon Also some some really interesting comments coming out of feds bullard about a potential timeline for when we could see discussions over tapering in the US Federal Reserve and Then an update on US-China relations the COVID program in the UK So quite a few things there to get you up to speed on but starting with the clothes on Wall Street And I've got a chart here of the VIX which has been trading at a 13 month low. I think most intraday speculative trade is getting a little bit frustrated by the lack of movement We've been seeing particularly in US equities of late, but I would say that's largely understandable we have gone through a period of kind of the dust settling on fears about the Kind of inflation expectations rising higher yield movement which we saw causing a degree of market disruption just a few weeks ago the dust has settled on that topic I would say and people have acclimatized to the fact that there will be rising inflation which we're looking for to materialize in the later later on today, but This one thing with the VIX we are training below 20 at the moment is a 13 month low as you can see on the chart here Episodes of a kind of depressed VIX tend to be followed by breakouts of flashes of volatility What that catalyst could be really yet to be seen But obviously I think markets have been quiet for a couple of different reasons We've had the Easter holiday just just recently We've also got from a kind of perspective yesterday was particularly quiet But we go into from now really US CPI this afternoon You got retail sales industrial industrial production coming out later on in the week You've got US earnings also commencing with the big banks starting to report pre-market on Wednesday So there's a few things coming up And so I can understand people's kind of just sitting on their hands waiting for some further information to materialize Particularly with we've had a push-up Quite nicely up to record high territory once again in number of the US indices So a period of consolidation is not unusual. I would say for the time being But a quick look at the charts this morning How are things as they stand? Well equity index futures pretty pretty flat open overall Not really too much to speak of The DAX is training absolutely flat in the futures market Just keeping an eye from that Friday low, which was the range weekly low generally that we had for the second half of last week Coming up to the load that we printed at the open yesterday morning and the retest that we had late in the US session That trend line just holding for the time being but one to watch any breakdown of that be targeting down at that Kind of double bottom that we saw yesterday evening for the DAX at 15 to 26 Upside break of range to keep an eye on today 15 to 74 for any further push on the upside retest of yesterday's high You've got the R1 as well sitting just above Otherwise currently markets pretty quiet the Dixie to firm up a little bit overnight, but it's up only about one-tenth So marginal change if anything in the major pairs cables pretty much flap And and you're a dog down just ten pips been a dollar appreciation overnight though. It's weighed on gold Just very mildly. We saw a breakdown technically of the the move through yesterday's lowest point that was seen at 1727 As you can see here just saw a bit of a run-on prices through that technical breach to come down to test at the S1 before seeing a bit of a bounce so to me Definitely much more technical on that move as what would be characteristic of that extension on the wick on the gold price there directionally for gold continuation to be Whether or not that move can be continued I'd be looking at cues from the the currency market I eat the direction on playing that the dollar To get a bit more understanding of that whether that will continue gold down six bucks at the moment oil pretty much unchanged And then in the 10 year We are down about four and a half ticks and we're really testing the low we had on Friday The U.S. 10 year yield sitting around 1.7 percent at the moment. You did have the double-headed yesterday kicking off this kind of slew of Bond issuance coming out the U.S. In the the days and weeks ahead We did have a three and ten year no auction slightly lower demand yesterday But going out without going through without any major hitches is the main kind of summary You've got the third year bond auction happening at 6 p.m. Later on tonight as well as far as the overnight session is concerned Excuse me, I will shake off this cough at some point and hopefully in the near future but We did have some Chinese data overnight. I wouldn't say this is a great deal of Kind of reaction to this the trade man's headline figure eighty nine point nine eight billion Chinese yuan versus expected 227 billion so the surplus slightly small and expected exports are missed on expectations You're in year 20 spot seven against expectations of twenty eight point six imports So higher twenty seven point seven against Seventeen point six percent as you can see here import grows to highest in four years a couple of things that analysts were commenting overnight when I've read about this Chinese trade data is they were kind of questioning the ability to For China to continue to kind of remain so robust on the export side going forward in the weeks months ahead as The vaccination rollout continues and other countries start to get back on their feet and matter of fact activity there starts to pick up and kind of taking away then from the kind of China boom that we've seen after they were quite early in the reopening post the initial phase of covert But all in all I wouldn't read too much into the Chinese trade data. Don't think it's necessarily a particularly big deal this morning On the China front something to be aware of is Treasury Secretary Janet Yellen will decline to name China a currency manipulator in her first Semi-annual foreign exchange report according to people from a limited matter on Bloomberg It hasn't been finalized yet the reports due to come out on Thursday The reason why I'm just pointing this out bring it to your attention is because obviously there's an ongoing degree of friction at The moment as the Biden administration starts to find its feet at the initial negotiations with China Having had that meeting in Alaska. Yeah, just a few weeks ago. And so this could have been a potential Platform to escalate that confrontation, but it doesn't look like that's going to happen at this point So I'd say this is kind of a potential increase in risk over tensions on that relationship just Being averted at this point with what's what's said to have happened here The other thing I wanted to talk about a little bit more detail was this it's really interesting comments out of a federal reserve member Called James Bullard. Now Bullard is very leaning on the dovish side of the kind of monetary spectrum Importantly Bullard as well as a non-voting member and a little bit context as well about the individual himself Bullard does tend to be Fetivocal about his thoughts on the economy and future monetary policy and he has been known as well to flip-flop a Little bit between his views. So he kind of moves around the Dove Hawk kind of spectrum a little bit So now that I've given it its relevant caveats. What exactly did he said? Did he say well? He said that getting 75% of Americans vaccinated would be a signal that the COVID-19 crisis was ending And so therefore a necessary condition for the central bank to then start considering the conversations around Bomb-buying tapering So that is probably the first kind of numerical Time to a milestone that we've heard from a federal reserve official tied to vaccinations So the question is then well, where are we with vaccinations at the moment? And can we extrapolate out then at what sort of timing could we expect this taper talk to start emerging? Given that he's tabled a 75% figure for the initiation of that and First things first, this is a look at the share of people who have received at least one dose of COVID-19 vaccine And if we start to focus in here, you can see the UK out in front Coming up to around the 50% mark But the United States also a real front runner on the developed world side of things and I was looking at these numbers last night 36% of Americans have been given a first vaccine dose 22% of the moment are fully vaccinated according to the Bloomberg vaccine tracker and this data here Would kind of match up with that Now one of the things I was looking at then was I was looking at generally what's the supply situation in America and When could we then start to expect a Rough timeline of what it might look like when the US might be at a point where they hit 75% Here what we're looking at is a time frame Going from January March May to July and we're looking at the three major Manufacturers that are supply of vaccines in the US As you can see the one which has is the smallest by far up this present point is Johnson and Johnson But as we go forward over time going through into May into June the J&J manufacturing starts to pick up pace and further Larger quantities of supply start to be to start to hit the market major milestones here given the strategy of America has been Mainly led by Pfizer and Moderna's vaccines At the end of May both those two companies have promised around 200 million extra shots to come J&J's kind of Milestone marker is by the end of June a delivery of a hundred million so you can see here that the available Kind of vaccine starts to really ramp up going forward Which should further accelerate what has been on average around three point two one four million shots Being delivered in America and it's been moving up to pretty much consistent record territory at the moment and moving faster Applying the math then it would take approximately around three months To cover around 75% of the population so to see this number at 36 to go to 75 We're talking middle May middle June middle of July to get there. So this Gives us a rough reference point then if Boulard were to be believed of when we could then start to be hearing about The the overall kind of what's the state of the US economy at that point in time? there'll be obviously lots of other variables to consider and they'll be in play and Will the Fed then need to start altering their language now I guess that puts even more pressure on the June meeting Which is the next with the summary of economic projections from the Fed They'll be particularly interesting because by that point we could probably extrapolate out a trajectory of how the vaccination path is looking from the US as to whether or not We're on track at that point plus as well. What is the current underlying macroeconomic situation from the data that we're seeing? So as we were saying and the at the actual March meeting at the Fed the June one is becoming ever Increasingly more important. Now, you know, even though with the VIX I'm sure we'll see a breakout on the upside before then and certainly by June. They even know things Economically might be really strong at that point in the US Actually from a policy perspective It creates quite a headache for the Fed to manage then a shift in communication And could that be the disruptive next big market event that unfolds in the middle of the summer? It will be interesting to see on the COVID side As you saw the UK is really a front runner in terms of the number of people who have been vaccinated with the first jab Coming up here around the 47.3 percent marker at the moment The news generally has been that the the UK has passed a significant milestone according to the Prime Minister yesterday They basically they've conducted now and Vaccinated everyone in the nine highest risk groups, which means they can now push ahead towards their goal of vaccinating all other adults By the end of July and so starting to target some of the Demographic that's generally of a lower age sub sub 50 On the calendar for today, what have we got so just to wrap things up? We've already had the UK GDP come out But as you probably saw in my morning notes And subsequently in the movement pound very limited reaction the GDP estimate month to month point four percent gets expected point six so a positive move back higher from what was a negative print we saw at the beginning of the month, but Not surprising at all just given the fact that the previous numbers were very depressed Given the fact that we just went to a state of new national lockdown and also the new post-Brexit relationship between the UK and the EU so bit of a pickup Point four gets point six. It's really not that meaningful at all as far as sterling is concerned Otherwise going further forward we do get the latest German ZEW Coming out that is expected on the headline to show an improvement to 79 from 76 point six I Don't necessarily think that that's going to be particularly marketing pack for for the reasons being that perhaps analysts are a little bit more optimistic The COVID situation still Somewhat to be monitored very vigilantly in Germany given the recent uptick in cases But given the rollover restrictions that we've had it's almost like now We're seeing the light at the end of the tunnel So there's room for very mild optimism going forward, but nothing I think that the markets are going to get excited about from a reactionary point of view And then the main focus probably from a Canada perspective today is the US CPI report as you can see here the Year-on-year expected at 2.5 percent against 1.7 the core expected 1.3 so a little bit more moderate improvement from 1.3 percent last time out Just to remind you the analysts at the mirror made a good comment yesterday They said that not to get too frothy over this release A year ago base effects will start leading US core CPI higher So if you think about it where we were back in 2020 in April We just had an almighty hit to the global economy as the whole globe went into lockdown And so demand dropped off a cliff. So if you're looking at the year ago base effects and Energy was crashing in April It's the absolute opposite of where we are at the moment where energy and fuel prices generally have been elevated So that's what this disparity will be between now starting to see quite rapid Rises in inflation numbers, but perfectly explainable for these reasons Which should help markets rationalize and contain subsequent market kind of reaction to the numbers when they come out And if they are on the high side The other thing is then not only is these upticks in face like to be expected But likely to be managed again appropriately by drawing power when he speaks he's speaking tomorrow He's probably gonna just tow the line as he has done going forward Otherwise calendar But they buy crude oil in trees after market It's usual couple of speakers probably daily Barking and Bostick are the main ones because they're all voting members They're gonna be speaking all at 5 p.m. London time And as I mentioned earlier, you've got 24 billion the 30 a bond auction coming out in states It's a metallic supplier this morning for those interested in the fixed income market. All right, that is it from me Any questions at all feel free to drop me a comment if you're watching this delayed on YouTube Don't forget to like and subscribe and for the guys out by live. I'll see you in the discord room Have a good day ahead