 So, US regulators have eased some of the most onerous regulations that have been put in place post the financial crisis last night and that saw financials close on their highs and a rally into late trade on Wall Street. However, the latest Fed stress test came out and the Fed have capped bank dividends and have banned buybacks through September of this year. Also, we've had record cases of coronavirus in the US and Texas, one of the key hotspots, has now halted their reopening plans for the time being. I'm Anthony Chung, I'm the head of market announcers at Amphify Trading and this is your market briefing for Friday the 26th of June. Don't forget to follow me on Twitter, here is my handle. I will be publishing my regular, kind of look ahead for the week, my macro menu on a Sunday and it comes out first here on my Twitter account. So feel free to follow me and again feel free to message and ask me any questions as well about anything that I like and share. Happy to engage with you guys. But look, let's get straight into what's going on this morning and it's a relatively quiet open, all things being equal. The dollar index is actually square at the moment, flat and that's reflected in the major pairs. Equity markets are pretty sideways in the overnight Asia-Pacific session. Not a great deal going on. If anything, Asia just taking the baton from the higher close on Wall Street that we had, but I wouldn't anticipate that really to follow through too much into the European open. I'll go into those headlines about the US financials in a second. But T-notes, again, flat oil is pretty flat as well after a decent recovery that was seen off some of the low points. And yesterday, as you can see down here in the bottom right, oil just running into kind of a degree of near term resistance in the overnight session from kind of cluster of the test from the previous point of support that was seen on the 22nd. That also was the high on the 16th. You've seen the market responded to it before we had that drop down around the kind of US open yesterday, but we've recovered since. So, yeah, just trading a sub-39 handle. So just taking back a little bit of the aggressiveness of that rally that really came through the US session yesterday, which was in excess of $2. So not that surprising, I think, to see some profit taking, particularly given quite a key level of resistance here on the upside in the short term. Equity markets, I think quite an interesting kind of narrative here that I just wanted to share is that it feels like it's been quite a busy week in regard to headline news, actually. However, if you actually look at the S&P here, I'm looking on the 30-minute candlestick to encapsulate the entire week's price activity. We've obviously had some big episodes. You had a price movement. You had the one two days ago mid-week when the market's got awfully nervous about the acceleration of cases on the Sun Belt in America and how that was going to then halt the plans to reopen the economy. That was this phase here. You also had the Navarro Weekend Rock China. Oh, no, I wasn't meant to say that. And then Trump following up, I love China kind of scenario. So that was that episode of volatility. But here's where we opened on the market on Sunday night, going back a few days ago. And so if you actually look at the higher and lower bound of the range that we've traded this week, and obviously quite a key technical area of resistance going back to last Friday's session up to what we've had that test twice in mid-week. And then to the bottom end of the range, which we were trading down just yesterday morning in the European session. And if you look where we are at the moment in respect to that range, we are bang in the middle. So despite kind of semi-panic about the situation on COVID and all the other headlines in between regarding US and China, regarding some of the bank news that we had yesterday in America, if you actually just take a step back for a second, we're actually in the middle of the range for the week, which I think is quite telling, all things being equal. And if we zoom into the more near-term price action of what we've had developing so far, this is when some of that banking news was coming out on the regulatory front, not the stress test, they came off the market. We shot up, we broke through technically what was kind of a range that was containing the price action through much of yesterday's session. So the acceleration through that has now formed this new kind of range here. And again, when I get round to the calendar to show you guys, I don't really see a great deal of set events from an economic perspective that can really shape market direction. I think we're still gonna be looking out for those COVID updates that we'll be looking for London time later this afternoon to really see how sentiment plays out to see off the end of this week. So, yeah, we're kind of in this range at the moment, but depending on those updates, then any break lower, I mean, here's quite a key area. Let me just update this for one second just so I don't get the pop-up come up. So here will be quite a key area on the downside because then it could lead to any further rundown if that were to happen. And if that were the case, probably be looking to target down and around these areas of the low that we're seeing yesterday afternoon, if that were the case. So if you were seeing, and again, I'm not trying to force an opinion here. I'm just trying to find areas of say potential where the market might respond to in a bearish and bullish scenario if we break out of this short-term consolidation pattern we've been in since the late US trading hours. So this would be the key areas I'd be looking at in regard to the S&P 52 and a quarter, 34 and a quarter on the downside. And then obviously the bigger prevailing target would be down at the 3,000 handle, which was the weekly low, but quite honestly, I think you'd need quite a negative development to occur, something new, whether that be a much larger spike of some sort in one of the key states in America would probably be the most telling thing. I don't think we're in for another US-China trade kind of comment that could move things because that's kind of run its course at least in the short-term, I think. So the opposite, of course, would be targeting up and around the range high and you can see here that has had some relevance in the near-term session. I think this was on Wednesday's session when you had a good opportunity. That was that trade, I know a number of the guys got short and ran that all the way down, which was fantastic, but that's again, gonna be quite a key near-term upside area. Any break above there does open up what could be a little bit of clean air up to the 3,100 mark and 36 and three quarters, which would start to bring in some of the price action from midweek could be the other direction or play. So I guess in a situation like now, as I said at the very start of the briefing, we're kind of pretty neutral overall. Asset prices across the board are basically flat and I think that's a fair assumption from the generally the news flow in play. And so I'd rather just let the market play out. There's not a great deal coming out in the Canada, the UK and Europe. So I think better perhaps to wait more for the US North American session to kick off and then just take it from there would be my kind of best advice at this point. But let's get into some of the headlines. This is the heat map of the close that we had on Wall Street last night. Now, as you can see, there's quite a distinct patch of green down here in the bottom left hand corner. So a couple of things I wanted to update you on. And this was that little spike that we saw in the S&P 500 in particular and financials then were leading those gains. And what's happened here is this. So regulators have scrapped a requirement that lenders hold margin when trading derivatives with their affiliates. Volcker 2.0 allows banks to take stakes in venture capital funds that were previously banned in an effort to provide greater flexibility in sponsoring funds that provide loans to companies. So you can understand why they are doing that. It's another way to facilitate the response to the pandemic situation. But again, this is, it's another one of those where changes add to Wall Street wins during the Trump administration. Soon as Trump came into the presidency, he was always trying to push for the loosening of regulations, the idea being then that rather than this kind of onerous regulation that was put onto financials, post a financial crisis era, which was largely yes and sensible in order to safeguard against this type of situation we've got developing now, but also as a moral kind of political point given the overstretch kind of leveraged situation that banks were getting exposed to in the forms of subprime and kinds of much more complex financial derivatives in that sense. And so Trump's always been of the mind that, look, if you can get the banks firing, then you can get liquidity up, you can get then easier access to credit and then that could be a way of spurring economic growth when your idea is you want to make America great, you want economy booming. And so this is the kind of latest evolution, almost of that, and they're not tying Trump specifically to this. I think the fed step or the regulator steps to do this in part is to allow, as I just said, greater flexibility in sponsoring funds that loans to companies. So it's another one of those kind of another mechanism if you like to help facilitate enterprises operating in a very stressed economic situation as we're in at the moment. So this definitely was a relief in that sense, but then it was somewhat tapered at the aftermarket trading hours because the latest stress test came out. Now the stress test didn't create a massive movement and certainly it wasn't, I wouldn't say it reversed the move that we saw on the loosening of some of the regs last night, but it was enough to cap some of the upside, I would say. And so let me give you a bit of color here. So this is part of the annual stress test that the fed will conduct as part of its regular kind of market stability kind of checks if you like in preparation for any adverse economic scenarios. And what happened here was Federal Reserve told the biggest US banks that they can't increase their dividends or resume buybacks through at least the third quarter of this year. So the eight biggest banks had already voluntary suspended buybacks and that accounts for about 70% of US bank shareholder distributions until July. So actually it's not massive news, I would say, although it does make quite a sensational headline because a lot of the biggest banks have already done this as a kind of a way to safeguard themselves from the uncertainty that we've had developing since obviously the onset of the virus in March. Couple of things here in terms of some household names for those that are interested, Goldman Sachs and Morgan Stanley, they did fair actually the worst among US banks in the regular portion of the stress test. However, that doesn't mean that, right, we're going to short Goldman's and MS at the open situation. The reason for this is that both firms were expected to do worse because their businesses are more reliant on capital markets. Someone who's the opposite in terms of the underlying kind of products and structure of the bank and what areas they're active in is Wells Fargo. They do not have a sizeable trading operation benefiting from market volatility. Under the new rule, a bank's dividend cannot exceed average quarterly earnings for the previous four quarters. For someone like Wells Fargo, their profits were down roughly 90% in the first quarter. So, yeah, Wells dividend at risk from new formula based on recent income and certainly their recent income has been terrible as far as the first quarter is concerned and that puts their dividend at risk. Whereas Goldman's and Morgan Stanley fair the worst theoretically in a downturn because of this over reliance on capital markets. So, yeah, the stress test, I don't think are really a big deal personally. The one thing that stress tests have shown over the last couple of years, they've kind of served their point. Banking institutions as much as risks that they continue to take, they're in such a much better place than where they were. I mean, when I was monitoring markets back in 2008, 2009, I mean, I used to just sit here literally blind, not knowing anything about banks' exposure, not a great deal of visibility in terms of true facts and figures on their underlying kind of exposure, their capital levels, but now it's way different. And even in these kind of super, super adverse economic shock scenarios that these models runs for in the stress test, most of these banks hold up to it. So I think it kind of serves its purpose that again, it soothes, if anything, investors' concerns about an ability that we don't have a financial crisis. So it was like the pandemic is a slightly different type of crisis to what we had back in 2008 in that respect. As long as the banks keep running and liquidity is there and there can be enough then to offset future downturns and on that front, I saw this graphic and it's been updated by the FT and I thought this was particularly interesting. And this is combining a lot of the different facilities of which some have been used back in the financial crisis. They would be the bolded ones like the TAOF program, the MNLF and so on and so forth. Some of these more recent ones that we've heard of, of course, that have only just sort of got off the ground is things like the Main Street Facility Lending Program, so things like the MSLF, for example. So with these ones, the interesting thing here from a statistics point of view is according to the FT, just 103 billion of defensive firepower has been deployed through these various emergency facilities since they unveiled them in March. And that's up from 100 billion a week earlier. So very marginal increments, but this is just 4% of the maximum capacity of up to at least 2.6 trillion that the Fed have pledged, it would make available cumulatively with all the programs that it has. Now, for me, when I was kind of analyzing back through the European Sovereign Crisis, I remember quite distinctly that kind of 2011, 2012 era when people were fretting about the potential disintegration of the Eurozone and Grexit and all these sorts of things because of the bailouts that were happening for Ireland, Portugal and Greece and so on. Now, one of the things that happened there was when the ECB at the time unveiled a variety of different kind of programs, similar type fashion to what we're seeing here with the Fed and just the nature of them putting these facilities in place, some of them which were never even tapped or used was enough then for the markets to buy into that famous phrase of whatever it takes and then from then on confidence returned and the markets actually took care of themselves because again, it's instilling confidence that's key. There's kind of the practical element of yes, providing facilities like this for the mechanism of providing credit to companies, for example, for an economy to function. But if you can get one step ahead of that, that's the ultimate use then of forward guidance from a central bank and ECB definitely deployed that well back in that era because at the end of the day, they would rather not have to tap in large size these programs because it just adds them to the complication of unwinding this in the future and the current situation of debt. So yeah, it's quite interesting. I find at the moment as much as we're monitoring COVID and that is what the market is sensitive to intraday right now and probably for the foreseeable future given the situation in a number of US states. What's quite interesting here is the Fed have got lots of firepower sitting there on the sidelines yet to be deployed. When I say a lot, I mean, a good $2.5 trillion worth and the US is talking about more stimulus, for example. So again, if you're more of a bullish point of view over the medium term, think a lot of people, I've seen lots of YouTubers kind of putting out videos talking about the market's gonna crash at the end of July, going into the summer when a lot of the more kind of direct fiscal programs the government have been supporting employees and furlough schemes and things are gonna run out. That's when the market's gonna crash. It's like, even if it does see a downtick, there's lots of bullets here sitting there in the chamber, ready to go. And this is the difference is that these programs already exist. It's not like they have to be created. And so the Fed, the one thing as much people do criticize them on occasions, I think the one thing that I've seen in my career, the Fed have always been very aggressive to get everything out there very quickly. The first to cut rates aggressively, the first to do emergency rate cuts into meeting, the first then back in the financial crisis to go into QE, the first to roll out lots of these kind of what would be unconventional type policies but quite creative in that sense. And yeah, as much as you can say, well, surely this is problematic in the long run or in the short term, necessity rules and you've got to get the economy functioning when it's in a period of facing a historical moment like we are right now in the global pandemic. So yeah, hopefully that makes sense but does make me feel relatively neutral. I think where market prices are at the moment, I can't see then following this logic through how we're gonna have this monster sell-off in equities at this point. And I'm sure my colleague Sam North will be happy to hear me say that. All right, let's move on, quick COVID update. I did mention the Sun Belt region in America and I know not everyone, a lot of our audience because we're based in London is not American so you might be thinking what states are at the Sun Belt. The Sun Belt essentially is the southern part of the United States going all the way from west to east coast. So going from California to north, south Carolina, Florida is most extreme. So the Sun Belt being obviously southern side in that respect. On the actual trajectories that we're seeing at the moment, the US saw a record number of new coronavirus yesterday. As you can see here, a lot of the focus is on these Sun Belt areas. And interestingly, one of the key areas that people have been watching is Texas. So Texas has in fact paused its reopening but this is really important because Texas from an economic point of view is very important for the whole nationwide US economy as a whole. And the slowing down of that process of reopening is important. And this is what we need to track in these other areas as well. Similar and overlaying this is that Houston's intensive care wards are also apparently set to be reaching near capacity. And if you remember, if you're in the UK and we're going all the way back to kind of late March, April, that was when there was that real fear about controlling the shape, if you like, of the curve in order that the NHS could only manage at a certain level. And that's why we wanted to squash the sombreros as Boris had initially put it, which was to have the same cumulative number of cases but make it slower. Was it contain and delay was the strategy at the beginning in order to not put an onerous pressure on some of these hospitalizations when it gets to full capacity, which is only going to make the situation worse. So yeah, Texas definitely at the moment is quite interesting. And this chart I find also is interesting because if we look at the UK, for example, the UK government has outlined this kind of independence day, Fourth of July is when we're going to open. It's the next kind of phased of reopening in the UK where we've had quite the opposite in the US. You've had very depressed rates. But if there was a guideline of to what the future may hold, I mean, the US states were kind of the last. I mean, one of the reasons, I mean, obviously the population is one thing and the movement of people, given that it's an affluent nation in that respect. Sure, there's lots of variables, but the idea here is the US were quite late to the party to lock down their economy, but they were very quick to reopen, obviously under the pressure of Trump wanting to get the economy reopened again. And so the phase one reopening of the economy, if you can believe it, actually began the first of May, it's almost two months ago. And it was pretty controlled and that then led to the officials and the decision to be made to begin phase two. And then phase three was when further restrictions eased. And that was June 12th for restaurants and 19th for amusement parks. So if you think about it, that's kind of like the July 4th moment that we're coming into for the UK. So at that point, cases were pretty flatlining, but you can see quite quickly after the reopening of restaurants, it's almost like the closer we get back to normality, the more psychologically, I think people start just going back into their old pattern of behavior and also obviously restaurants, even though you can take certain social distancing measures, there's obviously more interactions and more outdoor activity, more gathering in spaces where you're potentially going to come into more contact with other people. And that's where through June, these levels of confirmed cases have just exploded up to the point now where the governor Abbott has paused plans to further ease the lockdown and banned elective surgeries and hospitals of the state's biggest cities at the moment to lead us where we are. And that leads me on to then, you know, to UK, I couldn't believe it. I mean, surely this has got to be fake news. That was apparently south end on sea yesterday afternoon. I mean, if that is the case, and this is Britain, I mean, I'm just, I'm disappointed to say the least. I mean, if this is what people are going to be doing, I understand it was the hottest day of the year in the UK yesterday, glorious sunshine. This is just irresponsible, but look, I'm not here to become a father to people. But you know, this for me is what's going to be interesting though. And going back to the facts and the point I'm trying to make here is that it was the third phase of the reopening, which the UK is going into in two weeks time. And it's this type of activity then as well, given that we're in the heat of the summer that is a real risk. Matt Hancock, actually the health secretary said last night that he would warn that he would close beaches after this event to head off any potential new round of coronavirus cases. And obviously, as I was reporting two or three days ago, Boris has kind of gone against the medical advice here in his pursuit to try and get the economy moving again. On that front, Rushi Sunak, this was part of my macro menu right from the beginning of the week where he was talking about potentially cutting the VAT rate. Apparently the latest is here, he's going to wait and see how the public responds to the Independence Day reopening of the hospitality sector in England before deciding whether fiscal stimulus such as a reduction in VAT will be needed to boost consumer confidence. So it's quite interesting, isn't it? It's kind of like a little bit out of the Trump playbook or the Federal Reserve playbook. It's a little bit like Sunak's come out, drip fed a little info into the telegraph or the Sunday times it was last Sunday and said, I might be thinking about a VAT cut. All of a sudden the market goes, oh, that's nice. That's a bit supportive for price. And then actually he never does it. And therefore job done and he never actually has to cut VAT which for every percentage points costs the government seven billion pounds in income. Strategy's good if it works, I guess. So, but if you start going down that route that's quite a precarious path of forward guidance. But look, maybe I'm overthinking it. But yeah, at the moment the point being is the VAT thing is off at least for now. And I think really, as I've said before this week the telling part for the UK economy I think will come mid to late July. And that's when we're gonna be looking at these COVID cases. The interesting thing here on the COVID the last two graphics I'll share with you is really this. I mean, talking about the UK and the US I mean, there is quite a distinct divergence here where you've got the stringency index. So at the moment what this chart is showing you is that countries like, although Spain I remember was quite slow to lock down I think France was particularly quick to lock down and put on quite onerous measures about movement and so on. But you can see now the effective unwinding of this and this is really key for the recovery in the eurozone to get underway. And in terms of these, this is quite a generic index the stringency index is just looking at the ability to I guess zero indicative of where we were pre-pandemic but reversal of say 50% of the entire move if you're looking at lots of Italy or Germany for example and what a difference comparative on a global scale to cases per one million people on a seven day trailing average. I mean, you can see here the euro area the EM Asia comparative to Latin America and the US it's quite unbelievable. So yeah, for the moment it's going to be interesting to see how this plays out of course where is the eventual plateauing and peak of this second wave for these countries? Well, it might not come for a number of more weeks because the halting now as we're seeing in Texas is only just coming into play and it's going to take a little bit of time for that then to naturally peak as what we saw in March, April of this year. The key I guess area to look at here will be in the euro area is as the strigency index continues to decline and people the access to movement and going to work and going to hospitality, restaurants, bars and starts to increase again what does that shape look like then for the euro zone will be quite key. All right, Canada wise wrapping up as I said nothing really coming out in the UK European session so I think relatively quiet morning is in store going into the US session you do have personal income figures PCE, University of Michigan these are final readings on the latter none of that I'm expecting to really be market moving I think we're going to be in for a rerun of everything we've had in the last couple of sessions so when we get to around 3.30 London time all eyes will be on the latest figures coming out of COVID and that I think will be what will be the balance of sentiment for the rest of the session to see off the week. Okay guys, that's it from me going to wish you a good session ahead and a great weekend and as I said, it's my Twitter handle I'll publish the macro menu on a Sunday all the best, take care.