 Okay, very good morning. Happy Friday to you. It is the 15th of January. So I'm gonna keep the briefing relatively brief and on point and just focus really on three things that being Biden What exactly is the details? How's the market react to his latest stimulus plan and Timeline going forward and then to drone power had some comments yesterday Obviously a lot of focus this week on things like taper talk So what's the latest there and then also a little bit of mounting pressure on Boris Johnson at the moment on his lockdown strategy from some internal conservative members, which we can discuss as well So just going straight in and looking at the charts then In terms of the overall reaction because I did have a number of discussions with some of the Internal traders yesterday about is it worse staying up overnight to trade You know something like a the Biden event and yeah, there was a number of ways I said to them that I would approach that type of situation and for one Is what type of trader are you? meaning that you know if You are something more conservative more kind of pragmatic with your general trading style i.e. being more perhaps technical leds Preferring more range more cleaner directional rather than news catalyst type movement Then often, you know just kind of building up for a big event like that and trying to trade the actual moment of release can often be quite difficult And so when you do have these big events, you know something to keep in mind is there's always A further digestion of the move and kind of secondary possibly third forced Kind of phases to the move and so The other thing of course is just kind of management of oneself and thinking You know if i'm going to stay up through the early hours and you know It's always hard to pinpoint exactly how long that's going to take and so you know You could be vested into a trade through all through the early hours So you've got to think about you know you kind of forward planning then you know Friday would be a bit of a write-off if you were going to trade through the night because You know you're asking a lot of yourself then to just come back in friday for things like retail sales this afternoon The us for example and then expect yourself to be able to trade that effectively Given just general physical mental fatigue. So there's a number of things to weigh up You know and then ultimately when it comes to the news event in itself I tend to ask myself things like well How actually market moving is this going to be and you know A thing I was trying to stretch to some of the more junior traders was this idea of You know a week like this where there's a really big singular event like a biden proposal It tends to kind of saturate a lot of the market focus and consequent kind of general activity in markets as we've seen Relatively quiet movement across assets in the last two days in the build up to it There's this idea of kind of FOMO that you know, this is the event. I've got to trade it and that's not Definitely not always the case because you know, there's always another big event You know, there's always another big biden speech and so on and so forth. So, you know, it's really important I think to to always realize that But look, let's get straight into things and look at some of these asset class movements So as you can see, we've had a bit of a drift off in the us index futures albeit Fairly moderate and I would say that word is probably a good description of the overall cross asset class move There really hasn't been a great deal of movement So it'd be really interesting to see how today plays out particularly when the us come back in and they've had a bit of time to kind of Sleep on exactly the proposal that came out from biden dollar a little bit firmer Overnight it's just picking up a little bit of pace as we come into the UK European Open So consequently euro dollar just seeing a word downside pressure here And we did break the weekly low yesterday Euro did trade a little heavy On the daily chart. It's quite an interesting area actually. And so it's definitely worth keeping an eye Directionally downside for euro dollar if the dollar in itself continues to just pick up some traction on this latest Fiscal plan from biden Given the fact that technically that was a good area of previous resistance turn support And so fail break bounce back yesterday, but if we can maintain a move below there I'll be looking down towards the 21 handle in the futures and then down to 120 60 Which would be that initial low that we had back on the ninth of deck Cable likewise Still weighed in a similar fashion by the dollar Maybe a little less so for right now down 15 comparative 35 in the euro But the overall same kind of theme Is a repeat of what we were just discussing otherwise oil markets Really not a great deal of movement. We're we're down about 40 cents tea notes Pretty unreactive really to what was going on post biden If anything the actual treasury market actually moved up And it's just basically trading a relative range. I would say of The last two days, which is defined by that 17 on a low 27 I got the r1 providing a short term degree of resistance here But I'll just be looking at that range play for the time being. I think all things remaining the same So look, let's get into the news. Let's talk about biden. What do you say? What's going on? So You transition my screen. So here it is president elect joe biden will ask congress for 1.9 trillion pandemic aid bill Package then that does risk obviously in the next step a republican opposition Over some of the big ticket spending on democratic policies including things like state aid local governments Important to understand here that there's kind of two elements to biden's proposal This is more kind of coveted relief type pandemic aid And then a secondary one which he's going to outlay details in a month's time Is more to do with the broader economic recovery? And that's where he'll talk about things like internal infrastructure climate change things of that nature Some measures in this proposal. This is something I was discussing quite a lot yesterday in amplifier live Was about the including aid to states and money for health care Is likely to need 60 votes in the senate now as you all know given the runoff that we had in georgia The senate is currently 50 50 in a complete split But the way it works of course is that the vice president of malaharis then has the deciding vote and hence The control in the democrats and the blue wave scenario But it's obviously particularly tight and particularly with some of these measures requiring 60 votes This was that idea where I was talking about yesterday A blue ripple rather than a blue wave And and the idea being here then what's interesting now is really how much can they get get through I think with any political proposal on its first instance It is exactly that it's like the opening bid then to go into congressional discussion The interesting thing now is what how much does that actually pass through? What does the end result look like compared to the overall proposal because That in itself is particularly important for markets because Markets inherently are forward-looking They like to latch on to top-level figures The detail kind of comes later when you're talking about intraday reaction at least and so the 1.9 trillion Came as no surprise. I mean, what a world we live in where You say 1.9 trillion and the market goes It's okay It's nothing that big is it? And welcome to 2021 But yeah, if you look at the S&P 500 here, I think it's really telling of Kind of a a light By the rumor sell the fact type movement. I mean, this is looking on a 60 minute candlestick I've just marked it up here with the georgia senate race And this was that reaction that we saw when the confirmation Remember it wasn't expected Although the polls were slightly tipping in the dem's favor You know the confirmation of the blue wave was something that definitely was not a focal point going into the initial elections in november So we've had a really meaningful equity response Since that market's pricing in obviously large-scale now potential stimulus coming in In the u.s. And so the market is already up a fairly decent amount And if I was just to look at the percentages from where we were from that kind of initiation of the rally that we saw then at the stocks open after the confirmation of the The dem win in georgia and you know, we rallied up to an all-time high about three and a half percent So now he comes out and says what he said last night You know, if anything we've actually moved lower. So from when he spoke to where we are now, we're basically down You know a percent or so and and so Last night for any new traders just to understand Um, it's not like you come in and go wow two trillion dollars got to be buying stocks You know You should have been buying stocks about 10 days ago and that was what was driving that price movement then So this is the way that markets react. And so there was nothing really Surprising or shocking a lot of it was drip fed obviously in we were talking about the two trillion figure yesterday. So Yeah, a couple things to just be aware of Going back to the actual news jobless benefits stimulus payments and possibly a minimum wage hike Could go through a simple majority under a special budget tool Um But I think it's important to remember as I said about you know, what what said now what goes through in the future I mean there's some talk I was reading as some of us press About the democratic party using a process called reconciliation, which basically means you can bypass Then the need for republican support to push through certain proposals However, my understanding of that is reading a few different bank commentary pieces That given he wants to bring forward an economic recovery plan And later i.e next month He's probably more likely to keep that aside because that's going to be more long lasting integral to his presidency and administration post COVID-19 So rather than use that kind of Trump card Not to mention his name, but rather than use that get out of jail free card if you like then of Trying to have a way to bypass the publicans in the senate Don't use it for COVID-19 get that over the line Use it for more of your bellwether kind of key proposals that will define your your campaign So I definitely see that as as not happening with this and happening later on down the line Looking forward biden is going to be talking later today on the idea of His coronavirus containment plans Definitely, this is quite key for what the Recovery is going to look like in time Had some conversations again with a few people yesterday talking about you know, is he going to lock down the country? Absolutely, I do not see that happening You know the u.s. Is is run In a very different way to say England here in the uk for example where the national government Makes a decision and that's it. It gets implemented across the board Whereas in the u.s. Obviously, it's a lot more fragmented onto the state level. So I'd see it as incredibly It would be a it would be a self-harming move because on an individual state level these circumstances Attaining to COVID-19 are quite different. And so it probably doesn't require a blanket coverage Kind of national lockdown irrespective of what biden said obviously A few months ago in the the political kind of televised debates. So that's that the other thing. We've got of course is power I've talked about this all week really and I've I've tried to Stay on the side of Trying to get people to just kind of rein in this expectation of inflation I think it's unwarranted for a number of different reasons. I've talked about over the last few briefings And Jerome Powell has come out and as the headline suggests he's batted down Taper talk and absolutely I think that is the case and you know, it really comes down to this idea that you know, my experience tells me that whenever there's You know kind of a one little what I call a bread crumb of information So here it could be the idea that stimulus, you know in a binary fashion It's going to accelerate demand and create inflation further than what's going to happen already under a successful rollout of a vaccine that's going to see the u.s. economy explode and therefore inflation is going to run rampant so Just the idea of that starts to bring out then several dominoes falling and people start thinking And and triggered I must say by Fed officials Barking and bostic right beginning of the week talking about look If all things play out and we see a decent recovery in the second half, we're going to have to start having discussions on tapering It's like for me Yeah, if you go back to that monday briefing I was saying look hold your horses here guys We're nowhere near that discussion. I don't think so And the Fed I think have made a coordinated effort throughout the week I think we must have seen at least 15 if not more speeches from different members throughout the entire week and Nearly all of them have then started to push back against this notion of taper on fear of course of Markets getting particularly apprehensive of what a tightening of policy could do. What otherwise is a still fairly early phase of Rolling out the vaccine, which of course then the economy rebounding is almost entirely dependent upon So power did exactly that We need to be careful about talking about tapering warning against an early exit So everything that you would expect I would say so I don't think it was wholly surprising The other thing to talk about and the final thing I'll I'll go into is is Boris Johnson. This came out yesterday, but Just wanted to give a bit of context really. It's not it's not a market mover It's not something in the pound that I'd be applying to any intraday type strategy it's just something to be aware of And conservative member Steve Baker. So those who follow uk politics will obviously Recognize his name. He is a fairly vocal Player in the whole Brexit saga He wrote a letter to his Tory colleagues In what he titled could be a quote disaster If the pandemic restrictions last until the spring Now, why is this such a talking point? Well, remember the government's Kind of self-imposed deadline that they've put on the current status of lockdown nationally is 15th of February And then they're looked to reevaluate and what is dependent then on the loosening of restrictions is a certain quote of being hit or Vaccine being administered to certain key demographics now There's a big question or not whether that's going to be achieved first and then secondly with new strains of virus UK government this week's been trying to take preventative measures against Brazil, South Africa, other areas as well In addition to this UK variant which has seen the recent acceleration in cases Um, there's been a little bit more positive news actually yesterday about the case rates. However Hospitalizations are still At a point of where the NHS is about to burst at the seams and that is incredibly problematic and so At this point in time then these MPs know this someone like Steve Baker, you know, this is politics I'm afraid as much as this is a humanitarian crisis. This is what politicians are in it for It's power grab And you know good time to to hit the prime minister Right now if you want to just make a bit of a point and so that's what I see with this Not much beyond that if I'm quite honest at this point in time Um, they obviously talk as being if the government doesn't hit its self-imposed Objectives with the rolling out the vaccine then the lockdown a lot of conversation has moved until march Germany some other mainland european countries And I think a pencil in area on the calendar that would make a lot of sense is easter Which is obviously right beginning of april But obviously the longer we get locked down the more that some people will be critical of that that it's impeding Then the economic recovery people's jobs and livelihoods and so on So again the balance obviously that the government has between dealing with the health crisis and dealing with management of an economy And that the kind of longer-term impacts of people's livelihoods and not having employment and so on few things here to be aware of Steve barker was previously A pro brexit. He was leader of a group of pro brexit MPs. He did actually tweet though He still is in full support of boris, but for me You know the seed has been sown I mean, he's definitely is clear what his intentions are here despite him still saying what he said about backing boris So boris is not going to be happy about this. I'm sure Um from a numbers point of view few things to be aware of um He is one of the 55 Tories who voted against johnson's pandemic plan for a tougher system of tiered restrictions organized by regions in december so if you remember we went from kind of a Multi-tier system that's increased. We've now got five levels or thresholds And he's been against that so it's not this isn't completely out of the blue. I would say On paper it would take only another 40 MPs from the Tory party to vote against the government to inflict a defeat on johnson If all the opposition parties also decided to block the prime minister's plan So again, this is what makes it quite unlikely Because people like kia starma has been very leader of the opposition party quite clear that he would want to You know lock down. It's about you know prior to inspect acting fast to get on top of the virus And he's been critical of the government in in doing so. So I can't see him Going against and wanting loosening of restrictions. So I think it's highly unlikely that barker again There's got any real validation of what he's calling for. It's more a political Um kind of little cut to boris while he's while he's on the ropes almost so Similarly a 55 conservative submitted letters of no confidence in the premier It would trigger a vote on whether he could continue as the party leader. I mean It feels like we're back at tereza may Brexit scenario But to give you again A bit of color on that in last week's vote on the third lockdown only 14 Tories opposed his measures. So Again, it's far too early to really get into any idea about you know, kind of Confidence on his leadership. I think any headlines suggesting that are misplaced at this particular point in time It will intensify though should their government Go beyond then the middle of february deadline and we don't need to wait until the middle of february We'll probably already know by the end of this month Whether or not that's going to get rolled over or not because we'll be able to see quite clearly On the vaccination rates and the current developments on covet 19 Okay, that's all i'm going to say on that All right, so for the rest of the day a few things to look out for You've already had uk gdp come out. No reaction in the pound There's just so much other bigger more important things happening But I must say that the figure did come out a month-a-month basis at minus 2.3 Minus 2.6 versus expected minus 5.7. So it was actually better than expected car manufacturing supported by foreign demand house building infrastructure grew And as such are all above actually pre-pandemic levels, but obviously our Economy is driven heavily by services and that acted as the main drag to that figure overall So moving on as I said, it hasn't really impacted the pound That's more influenced at the moment by other factors in particular as well Not only all the uk stuff we've just discussed But the dollar movement is key today digestion of biden's proposal Going further forward in terms of the the day Into the us afternoon really is the focus. You've got new york fed manufacturing and the us retail sales report then industrial production Coming out and the university of michigan preliminary number for january. So quite a busy docket actually us session Should be interesting. So you've got quite a few economic data points to watch out for You've got the us then Reaction really to what they think about biden yesterday with the focus being on I guess is it enough and what can he pass? And if there's any disappointment in that belief then, you know, do we start see a bit of a pullback in the equity space? um and so forth Then the other thing is us earnings We've had a couple of smaller cap companies report already But kind of unofficially kicks off today Because we've got jp morgan 16 miles fargo or reporting pre-market My colleague eddie Did a good chat with the guys yesterday We've just recorded a shorter version of that and we've made it available on our youtube channel and I'll share it in the discord room As well the full the full conversation With all the metrics you need to look out for but that is it going to leave it at that let you guys get on with the day So have a good session ahead. Have a lovely weekend and stay safe