 Okay, very good morning to you. It is Thursday the 4th of February. Hope you're doing well in this briefing I'm going to take a look at this We've got the Bank of England interest rate meeting and press conference coming up later on today What to expect from that how the market might react and we're going to have a look at some Fed commentary We've got an update just generally on some key levels technically to have a look at across different products that have been in focus across the different asset classes and And yeah a few US data points and other catch-ups including the lights of some of the movement in Italian assets following the Appointment of dragging to try and form a government in Italy as well as looking at some of the metal space like silver and gold as well So let's get straight into it And start looking at the charts. What is going on at the moment? Well Dixie continues to remain firm this morning And in fact it's broken above what was a bit of a cap to price activity in the last two sessions So definitely worth keeping an eye on there, which is a theme generally of prevailing dollar strength now I've had quite a few questions, you know why the dollar strengthening and to be honest I don't really have a definitive answer. I'm just preferred to be just tracking it. It is leading These dollar based currency pairs at the moment more dollar strength than any other Narrative coming out of the other currencies and I'm just kind of following what I'm seeing at the moment and a technical break Here up again in the dollar. Dixie is trading up about a quarter of 1% this morning We have had things like the US House voted to pass the budget plan which fast tracks President Biden's stimulus plan so using elements of the reconciliation process, but to be honest that's been Something that's being known for a while I don't think that's a key catalyst on its own for the reason of dollar strength But as I said nonetheless, it does bring into play then some interesting Currency movements in the major pairs and just looking at euro dollar here We're having a retest down at the low you can see from from yesterday So this on the longer higher time frame is quite a key area this 120 as we know Has played a real key role in the euro and capping price gains originally It was that kind of I guess marker that the ECB had put down Back in kind of Q3 of last year to say look we're starting to get a little bit concerned about the strength of the euro That hasn't really come to the fore until recently having moved up kind of towards 124 and obviously we had some of that recent commentary just a week or two ago from sources and ECB's not talking about the idea that they could do more to loosen rates and so on But really it's more dollar strength is pushing this down and I'm just quite interested to see how we react We're within obviously touching distance now of that key level of which I think it's going to be very important here for the euro Consequently cable as well training a little heavy this morning so in a cable having been largely cushioned to a certain degree here from some of the action just given the General improvements that we've seen in vaccinations being administered in a fairly on track fashion from the UK government the price has started to break down a little bit and As we've just moved down below then the Kind of price movement that we had seen from the beginning of the week so going back to the second Then we've just had a nice kind of cap to price and a test So here just looking at this load that we printed on Second and we've come up just briefly tested that this morning before then a bit of a move down And that does coincide with the s1 today So quite a nice area of resistance looking on a 90 minute chart here to provide a bit of upside Resistance to any recovery in this price and now on the downside key levels now watching here in cable We're just testing down towards these loads that we printed back on the 19th of January Has failed at the moment on then the initial test here Which does coincide a support around the 136 handling the futures So that's something again to keep an eye on any breakdown there You've got the s2 just below and then you can see technically There's not too much in the way of near clear support until we get much further down Towards the loads you printed back on the 18th at 35 28 So if we do get that dollar Continuation with the euro breach, let's say from yesterday's low, and if it takes out through 120 This could provide Headwinds for cable to continue this downward trend. We've seen materialized in the recent few hours So again, it's not so much I'd say that it's tied to news in this move It's more just trends that we're seeing at the moment that I'd be following Obviously you've got the bank of England later and we'll talk about that in a moment And that could provide some degree of catalyst But we're not expecting any policy change or anything like that It's more about the commentary on negative rates that people will be focusing on but we'll get to that in a moment otherwise other charts in in focus oil markets despite the relatively bearish DOE release Really couldn't hold prices down And I really think that says a lot about the general bullish sentiment for oil at the moment and you know Yesterday afternoon, we just continue to move higher. This was some of the volatility on initial dip. We saw Given that the DOE's weren't as deep a draw as we saw on the prior night's API's But then we recovered very quickly. We actually put in the high Of the session and that is again a 12 month high up at around What would have been a price point at 56 33? You can see I'm just keeping an eye here on a short-term trend line on these highs that we've had both yesterday The Asia pack session and so far this morning But as I've been looking at tracking on the higher timeframe daily chart, we have reached that target You know, this is what we were talking about right at the beginning of the week If we could break out above a test on that 20th a fair pie then the next levels of resistance We didn't see up until the kind of really 55 95 56 handle and just above which is exactly where we're at at the moment So again quite an interesting area for oil because if we do start to break on up above this area Then really I don't see a great deal of resistance until next target up at around 57 36 Which would be another 25 cents or so above the current price Otherwise elsewhere equity markets are pretty flat overall this morning then as that future is sent to you here You can see his marginal outperformance. That's because it underperformed at the cash close on Wall Street last night Albeit marginally down four tenths against around one tenth to percent gain in the S&P and the Dow yesterday's kind of Slight let's say I kind of classified as a slight pause for a breath given this kind of Very decent recovery and equity markets We've seen since the beginning of the week totally Reversing any of those losses that were seen middle of last week on the whole kind of short squeeze mentality That did reverberate at the time Last Wednesday into a bit of downside. So all of that's been taken back and I think still feel Relatively comfortable with the consolidation that's happening at the moment. I think it's appropriate and just kind of waiting now Marking out recent technical ranges to see for the next move Inequities, but don't really have a lot of fundamental rationale to think that we're gonna snap lower not unless anything unexpected New breaks so probably looking for some colors of consolidation at the moment in the indices T notes Been grinding a little lower. Obviously we had some really strong numbers yesterday and some data points in regard to the ISM figure and obviously we've got some more data coming out today jobless and factory orders so Yeah, the old's moving a little higher of late in the US Not that I think that that translates into any definable action from the Fed because there's been quite a lot of Fed rhetoric Which I'll cover briefly in a moment But the 10 year down for the time being albeit marginally, but continuation of very grind low or move lower We've seen materialized over the last couple of days And we're trading down two ticks this morning otherwise metals markets Just want a quick comment on gold gold has been Feeling a bit of the weight of the persistence persistency of the dollar move at the moment and one of the ranges We've been tracking for a while is again looking at a 90 minute chart here This kind of range that gold's been in and yesterday I was kind of stressing to the guys that look need to keep an eye on the bottom end of this range because if it breaks The market could trade quite heavy. So it's exactly what we've seen materialized in the in the overnight session So for me, it's yes, the dollar strength is not helping this But the technical breach and I've having had multiple tests here In the last couple of sessions on around the lower end of that range Just giving way and adding a bit of downside weight. So gold trades down 13 bucks this morning On the back of that And then silver obviously was a massive talking point at beginning of the week That's kind of faded as the week's gone on and just kind of tracking the price here now on a kind of relative range so you've got the previous What you can see here the low that we had on the initial Test down toward the gap fill that we saw back at beginning of the week to snap through retest retest And you've got the r1 today at that same level. So I think you've got a really nice area of strong Resistance now on the upside for silver And the interim the kind of mid Point stop before we'd get up there. You've got the pivot level You can see the market's respected that in the overnight session And that does coincide roughly with around some of the late us trading hours Highs as well on the downside again a nice double Bottom here to keep an eye on should prices start to continue to trend lower as what we saw materialized during The overnight session that'd be at 26 35. So just looking at that range at the moment for for silver prices All right, let's get into some of the news. What is going on other things to be aware of? and Just a quick word then on italian markets The footsie nib actually put in the local index In equities the best performance in three weeks yesterday gains. I think we're just over two percent We saw that big gap up in btps. Obviously yesterday. This all coming on the confirmation that draggy's being Kind of collared to come in and try to form a government still A lot of work to be done there and definitely not a definitive done deal by any stretch of the imagination But I was just looking technically at btp futures You've got this area double top from the 28th and the first of february And that marked then the kind of low end of the initial test at the range that we had From yesterday's session had a brief flirt through that level at the initial open this morning That's definitely an area that i'd be watching is around that 54 mark in btp futures If we did move below there Then that does open up the prospects of a continued drift down Back in toward that range we were seeing before the dragging confirmation came through I kind of feel like That will eventually happen We will move back below this kind of key level Given the fact that I think the markets got a little bit overly excited about this whole draggy situation You know reality sits in it's not as straightforward when you start looking at the Kind of the power struggle at the moment and adjusting for political positioning And what draggy needs to do in order to make the numbers work In order to get a government over the line So that being said the longer that takes the more I think the yields will continue to move slowly back up in Italy just putting a bit of downside pressure on btps Just having a look then some fed commentary I thought is worth touching upon because It definitely when we start seeing some solid data points come out of the us Like we have done to a certain degree this week People starts get a little bit apprehensive again about things like inflation and you know the fed are they going to have any Discussions on tapering in the near future and so on so it's always good to get a bit of a A status check if you like on where the fed's heads are at And you can do that by obviously monitoring their speeches Now there was two speakers that came out notably yesterday feds bullard He said rising us stock prices do not raise financial stability concerns And there is no hurry for the central bank to slow its massive bond buying program So definitely policy is not going anywhere anytime soon according to bullard But I must note bullard is a non voting member A voting member so perhaps a little bit more influential was fed zevins He said that monetary policy will need to remain super easy to boost too low inflation Even as prices are expected to temporarily spike this spring Again, I thought that was quite timely given the fact that the service sector activity survey yesterday in ism Might have gone some way to reignite fears about this whole inflation overheating But again evans clarifying that this is would be temporary at this point in time And and being a call for super easy policy to remain in place. So That in itself, I think is an important general top level Reinforcement for why equities I don't think Would see anything other than small little profit taking periods when equities have risen consistently over a period of time So any pullbacks then generally I think you'll see people buy into them And then we grind back up and you know all-time highs back on the cards for sure Given the nature of what evans is really saying, which I think is definitely a shared stance Of the the main kind of federal reserve view at the moment All right quick quick word about the bank of england then what's going on here I'll give you a kind of summary. I'll go over everything in great detail on the amplifier live stream later But we're not expecting any policy change. So rates at 0.1% the asset purchase facility 895 billion there's no need for them to make any moves on their major policy tools at this disjuncture The mpc definitely, you know, if you think about it, if you were part of the bank of england, you know How can you really at this point make? A decision to move policy when you're awaiting the government's fiscal plan to come out at the beginning of March, which is their budget You know as we've seen through what's going on in capitol hill in washington and elsewhere This is a coordinated almost Effort in order to support an economy through fiscal and monetary means so At the moment the fiscal kind of leads it if you like they they work on their own steam and for The mpc they have to just react to what gets gets announced gets done to factor that in so They've got to sit on their hands for the time being because of really that reason the other thing is then They're going to release their quarterly money monetary policy report. So this is what comes out every alternate meeting And it allows us in markets to have a bit of a greater insight as to the forward guidance that the bank has in this Present point in time the last time they issued this was back in november And obviously the world was a bit of a different place back in november I'd say if anything COVID numbers got materially worse than expected and subsequently that's led to longer and more onerous Lockdowns than expected back then and so You know things like a an upgrade or an update to gdp forecast Which will probably materially see a weakening of what q1 growth estimates look like Is going to take place, but how much of a surprise would that be? I'd say very little at all So not really looking for too much there in the way of surprises to really act as a catalyst for price movement in sterling Or are the uk-based assets on the forecasts? However, the one area of interest of course is So much persistent talk about negative interest rates as much as I really do not see that as anywhere near Being imminent requirement Given the current status of what's going on in the uk You know one of the major things here is the general success the uk has had in its covet 19 vaccination rollout you know the kind of move to Having a heavy gearing towards the astro drug Which has proven to be a a good strategy Has then yielded results where they're on target now to hit that mid february target of Inoculating enough people in those key at-risk demographics the older age group and so That could mean then that we we might see a decent second half recovery in the uk economy all things remaining equal And with that being said then there's absolutely no need to be moving the needle now In regards to adopting a more dovish stance So I guess the main thing to look out for here is that the bank has been in discussions with Numerous financial institutions about a feasibility discussion on negative rates So the kind of necessary due diligence before Adopting it would be to explore The implementation and the ramification if it were to come into place in future So it's part of a strategic planning. Let's say but that in itself can be quite a powerful thing for markets You know at risk there's a credible tool on the table To be able to be used in future. Could that be enough to actually not use it if that makes sense so, yeah, overall for the bank of england the main risk then is going to be the Kind of insight the depth of commentary on negative rates I guess the more The research might show that it could be implemented very easily It could you know anything that would signal it could be a quite a successful thing to adopt Given it's never happened here in the uk That's probably only going to fuel the flame that it's going to happen Even though I think all those previous things I've said still stand the market will just jump on the headlines But ultimately I think beyond that the realization is is now is not the time to be taking rates negative For all those aforementioned reasons. So that's what I look for for the catalyst. But as I said Probably I'm just keen to look at the dollar and further appreciation there And if the euro breaks 120 cable just could get caught in those headwinds and start training a little heavy on the back of the green back strength All right calendar for today What have we got? So pretty quiet morning Construction pmi of the uk is not going to move move sterling Construction point of the least important of the the pmi metrics that we've seen So then you've got bank of england coming out midday Then leading up into non farms tomorrow, we've got challenger layoffs Then you've got weekly jobless claims expected there 830 000 not too dissimilar from the prior week Then you've got Later the revisions to durable goods, but again revisions. So this will be non-market moving and then factory orders Might get some attention expected at 0.7 percent from 1 percent previous. That'll be at 3 p.m. London time Speaker-wise fed focus again Daily a voter at seven cap plan an hour before non-voter speaking on the economic outlook at 6 p.m. London And and that's it for the morning briefing. So any questions at all just feel free to Leave a comment. I'm happy to help otherwise. I wish you guys a good day ahead. Thanks very much