 All right, very good morning. It is Monday the 4th of October. Hope everyone is well. Thanks to Piers for covering me last week while I was away. So I hope you enjoyed that and I'll do my best to get Piers more involved at least once per session each week. But yeah, let's go straight to it and talk about the week ahead. Plenty to get you up to speed on. There is a holiday in place. Mainland Chinese markets are closed through Thursday this week for the Golden Week holidays but nonetheless, it's still very busy on the China Evergrande front and there is some news to get you up to speed on that happened overnight. Also, US-China relations are about to become sour once again with a looming meeting in regards to their trade negotiations. There's other updates. Bullish calls on Wall Street for the likes of oil which obviously saw energy firms with the gas price rises that we're seeing globally at the moment outperformed sharply last week. We'll talk about Capitol Hill. Talk a little bit about insider trading as well at the Fed if you haven't heard about that already and then we're gonna look at the week ahead with the week commencing with the OPEC meeting today and bookended by non-farm payrolls on Friday which does mean that we get the various employment indicators as well in US data as we go through this week. But as ever, let's start with the charts and see how things look this morning and things are pretty flat overall. Obviously, me being away is a surefire signal that volatility would pick up in markets and last week it seems that equity certainly came under some pressure. But as I can see on Friday, we did have a bit of a bounce. I was just reading this morning about some of the news that came out that helped trigger that from the new pill that Merck has been talking about to some of the US data that was coming out. Just looking here on a 30 minute candlestick on the S&P 500, I was just taking the kind of overall weekly move actually from last week from Monday high down to the Friday low. And you can see that that fib retracement on the 50% fib worked out nicely on that initial top point that we saw going into wards to close on Wall Street the final hour of trade on Friday before then we kind of pull back a little bit and we're just settling a little lower there going to the European Open as this week gets really underway. On a daily continuation then really Friday's low was quite a strategic key point down around close to 42, 52, 53 which of course was those previous lows that we're seeing back in mid July and also the peak from the previous what was at the time, the all time high back in mid June of this year. Similarly in the NASDAQ pretty similar setup and of course we'll keep an eye on the sensitive tech sector at the moment particularly in the general yield environment that we're seeing at this present point in time and on the daily chart here on the NASDAQ 100 future you can see 14, 471 a key area we're watching not just today but for this week as an area of support any breakdown through there could well see not the next major support level come in towards more closer towards the 200 DMA which is the red line here and also that previous cap to what was the all time high going back to April of this year around the 14,000 type level. Interestingly then if we go from the peak in the NASDAQ that we're seeing around the beginning of September so really pretty much a month to date to where we were on Fridays low that's about a 7.5% pullback and he breached through that aforementioned level that we're keeping an eye on more near term around the 14, 471 level here that would then if we were to push down to those lower levels at the 14,000 mark would be a 10% so technically a full correction at that point. So just to be mindful of otherwise just looking across the asset classes this morning things are pretty quiet. The FX markets broadly flat at the moment not too much moving in the Dixie it did gap a little lower at the reopening but recovered that move. So Euro dollars basically trading unchanged top left cable just pretty much respecting a near term range for the time being down 15. Oil prices obviously seesawed last week but generally elevated and trading at 75.65 this morning down 23 cents just finding some near term resistance at about close proximity to the high that we saw capping some of the price action on Thursday session. All right, well let's get straight into the news because there's plenty to get you up to speed on and I'll try and be as prompt as possible. So shares in China Evergrand Group and its property management unit were suspended from trading overnight. So what's the latest? Well people through the matter have said that a dollar note maturing actually on Sunday so October 3rd issued an initial amount of 260 million dollars by an entity called Jumbo Fortune Enterprises if you hear that name circulating today. It's guaranteed basically that note by Evergrand and as we know Evergrand is kind of this spider's web of lots of different businesses that they're involved in. As the maturities on Sunday the effective date of course then is today. A non-payment of the bond principle would constitute a default as the note has no grace period. So I was reading on Moitaz this morning. Although five business days would be allowed if failure to pay is down to administrative or technical errors according to people familiar with the matter. So there is some ways and means to get around it and so wouldn't be a surprise to see the latter probably materialize. Hopson development holdings limited whose shares were also suspended is as per the headline here in the global times plans to acquire a 51% stake in Evergrand property services group limited according to the Chinese financial news platform as well. So again, couple of different things going on there at the moment. Overall, this news not seemingly overnight really spooking the markets but do bear in mind that China was out and so the main kind of reaction effect to this type of news is probably tempered somewhat by that fact. And just given the sensitivity of how markets were behaving last week, it definitely be quite interesting to keep an eye on things as we go through this European Open this morning because equity index futures, the DAX, I can see is just touching fresh session lows and moved into negative territory. And US equities, of course, we still very much vigilant on some of these lower levels that really near term defined by the lows that were seen on Friday in the futures market. Sticking with the region in US-China relations, it's not looking too healthy there either at the moment. Biden's top trade official, it's a lady called Catherine Tai, she will announce that China has not complied with phase one trade deal according to sources at the weekend on CNBC. You know, you might be forgiven for forgetting that actually there is a trade deal happening at the moment and it's still in phase one at this point in time. Sources have added that the USTR is evaluating potential actions then for that non-compliance from China, one of which includes the possible for additional tariffs. So it seems like we're pretty much back to square one again in that sense. The trade representative will outline Biden's administration's US-China trade strategy where she delivers marks later on today to the Center for Strategic Studies at 3 p.m. London time today. So do be on the lookout for that. The more aggressive, the rhetoric certainly talk about additional tariffs and things of that nature could well be just another weighted factor to just impede sentiment and could well just in the context of some of the matters that were moving markets in a negative way last week further fuel that kind of view. However, the idea of coming down to possible additional tariffs, I'd say it's probably a little bit too early for that at the moment. And a lot of this, of course, is just that kind of verbal rhetoric in order to bring China back to the table and get conversations back underway after what we saw was a relative deterioration of some of that relationship over the last few weeks despite the call that happened between Biden and Xi. Otherwise, flipping over to oil, just wanted to talk about two banks really. And as everyone knows, people are getting ever more bullish on oil. But two banks, and I wanted to quickly go over their rationale. I know there's a lot of students that I've been talking to even on my week off who have interviews at the moment as they go through the kind of internships for next year and grad positions and so on. And it's always good to know the rationale behind a bank's call. So when Bank of America's the headline here says oil's gonna hit 100, why precisely did they have that kind of bullish outlook? So I'm gonna start with JP Morgan first. They said that warning that worsening natural gas crisis in Asia and EU will spur so many power generators to switch to petroleum-based fuels that crude will hit $84 a barrel by year end. And that is roughly around a 7% or 7.7%, in fact, increase on their prior call that they had. Gas is so expensive in some places that switching could add, as it gives context, more than 900,000 barrels to daily demand for crude. Hence the reason why then a bit more of a bullish outlook for price. They did, however, say that their significant downside risks do remain. Chinese refiners appear to be reducing production rates or preparing to idle some equipment to perform repairs and maintenance and both would curb demand. But in response, they doubt OPEC Plus will make any change to existing output targets and their meeting of course today. Meanwhile, Bank of America has put a headline here. They're feeling even more bullish. They've said the global energy crunch could help propel oil prices over a hundred bucks a barrel for the first time since 2014. They said in summary, the boost to crude be driven by three factors. Number one, the global energy crunch could help in response to gas to oil switching as a result of high gas prices. Two, a jump in crude consumption over a cold winter. And three, higher aviation demand as the US reopens its borders as well. So I think the summary of those threes is quite a good rationale if you're ever stuck in that interview question about why oil might go up higher. Otherwise, moving elsewhere on the geopolitics but political side of things coming out of Capitol Hill, still not a great deal of movement so far that the latest is according to the FT that senior Democrats are willing to lower their three and a half trillion dollar cost of spending measures in Biden's kind of signature bill following days of infighting. And basically party leaders have given members enough or another month to come to an agreement over a package which progressives insist must be passed at the same time as they've always been pushing for as the 1.2 trillion infrastructure by partisan bill. Meanwhile, whips are also trying to forge a cross-party consensus to lift the US debt ceiling before the potential then for a default later this month, October the 18th, I think is the date in the diary of when this really become serious. But as I was understand when I was away on the back end of last week we started to see some really meaningful movement in short dated bills markets in the US as people start to price in the potential shutting of government and government shutdown over the lack of progress on this. Overall consensus probably still remains irrespective of some of that pricing movement we had on Friday that ultimately these politicians will come together and make some kind of deal to lift the debt ceiling they inevitably always do. And so I pretty much subscribe to that view but until we get to that point obviously uncertainty probably will just start to ratchet up a little bit as we go forward over the course of the next two weeks or so. The other thing that I thought was just unbelievable I think this did come out on Friday but in case you missed it the Vice Chair Richard Clarida. So this is the Vice Chair of the Fed Clarida is about as aligned with Jerome Powell as you're gonna get in terms of seniority and also his view generally on monetary policy and it works come to light that he traded between one and five million US dollars out of a bond fund into stock funds one day before Powell issued a statement indicating potential policy action due to the worsening COVID-19 situation at the time and obviously that was what really fueled then the equity rise at that period of time. So it just so happens then that he was switching out of those positions the day before that announcement came which is very suspect as you can imagine. So definitely expecting more on this. I wasn't here last week but depending on how much airplay this got I mean, Clarida's got to go I would say which does make things quite interesting then as to then you've got a bit of a hole to fill he is the Vice Chair who takes that position so on and so forth. So something which we'd be expecting to hear a little bit more as we go on throughout the week but quite an unbelievable headline. From a single stock perspective just really wanted to run through three quick stories to be aware of from the weekend. Tesla for one delivered a better than expected 241,300 cars in worldwide in Q3. Expectations were for around 223,000 and that is a record for the electric car maker and this of course comes after I was reading Eddie's market maker notes last week. You've had quite a few infamous investors dumping Tesla holdings but the car company coming out of the weekend and delivering better than expected worldwide car sale numbers for Q3. The other headlines that I thought I would share was Tesco. They will announce a share buyback program this week according to the Sunday Times they're due to unveil their results for the first half later on this week. And also for Morrison's US private equity group Clayton W.N. Rice has triumphed in the four month long takeover of W.N. Morrison with a bid of 9.97 billion sterling works out of the round 287 pence of share including debt for the UK's fourth largest supermarket. All right, let's talk about the week ahead. What have we got on the agenda? I'm really going to cut to the chase and focus on the US and as per the usual build up we'll get the likes of ADP on Wednesday headline expected at 500,000. That does mean that we're looking out for things like jobless on Thursday were expected at 350,000. We've also got today from the US factory orders coming out this afternoon and then book ending the week of course is non-farm payrolls. And so non-farm payrolls, few things to be aware of here. Employers are probably expected to have stepped back or stepped up, I should say they're hiring in September after lack of extra jobs growth a month earlier. Remember the previous number on the headline came in at 235,000. So another low ball figure. We are expecting that to pop back up. Bloomberg consensus is around half a million. And really what's the idea behind this and why is it going to be important? Well, it's the only new jobs report that we're going to get until we go into what is the penciled commencement really more formally of tapering in a November Fed meeting. So this is really a decisive data point to really seal the deal on that taper announcement more than anything. And I'd say anything around that consensus figure of around 500K is pretty much going to do the job in that fashion. And so a few other things that we're looking out for in the run up to this as I said is a few other US data points coming out of which a few things like the unemployment rate could be quite interesting from the payrolls report as well analysts at ING have said it may prove somewhat sticky. The consensus estimate for the unemployment rate in the US is for it to fall to 5.1 from 5.2% but still remain largely elevated. ING noted the ending of pandemic related extended and uprated unemployment benefits will be forcing an increasing number of people to start looking for work. And that means a supply of workers is rising and there should in theory be a greater pool of workers for employers to choose from. However, with many of these new potential workers not having worked for more than a year the fight to find start for the right skill sets at a time when there are 11 million job vacancies in the US is likely to keep wage rates pushing higher. So just to make sense of some of the breakdown of that payroll report, the kind of three main constituents of it the headline changing on fun payrolls the unemployment rate and the average hourly earnings. US ISM services index is due on Tuesday. So you can see that number here. Of course we'll keep an eye on that employment constituent overall the headline should benefit from the decline in COVID cases, more people engaging of course in the service sector as restrictions loosened and behaviorally people start to return back to some degree of normality. Otherwise looking elsewhere on the calendars a few other things to be aware of outside of the US the ECB policy makers insist a surge in prices of which we have seen most recently to a 13 year high in September will be temporary and what people investors will be looking at this week is the ECB minutes of their September decision which is going to be released on Thursday. That will allow investors to gauge the strength of that conviction of transitory inflation. On the same day the ECB and Cleveland Fed and the US officials will address a joint conference studying inflation specifically and could given how much of a hot topic that is it's definitely worth tuning into. That's again on Thursday. As far as today is concerned something that doesn't appear on this kind of macro calendar. You do have the OPEC meeting. So the Joint Ministerial Monitoring Committee the JMMC are meeting at two o'clock. That's going to be followed by OPEC plus meeting at three PM this afternoon subject to any delays. So as always with OPEC keep an eye out for any types of rumors and leaks and things like that that start to materialize. Markets expect OPEC plus to stick to its plan of hiking monthly output by 400,000 brows per day with delegates recently suggesting that the meeting is likely to be a smooth affair. So of all the OPEC meetings we've had over recent months probably a lesser exciting one to that extent. Meanwhile again off the Western markets going over to the Asia Pat region the Reserve Bank of Australia meet tonight. So I'll be updating you in the briefing this time tomorrow. They're set to leave its main policy leavers unchanged even as surging home prices drive calls for lending curbs. In contrast the RBNZ in New Zealand is likely to raise interest rates to address its own frothy property market. And then finally in Japan one thing I wanted to mention is that Japan's long-serving finance minister Tara Asso is likely to be replaced early this week as the incoming Prime Minister. So as you can see here who was the former foreign minister of course Fumio Koshida forms his new cabinet. Analysts also see Koshida announcing a fresh stimulus package to help support Japan's recovery. And as per reports overnight in a surprise move the incoming PM who formally takes office today is set to dissolve parliament next week and call an election for October 31st according to broadcasters overnight as well. But overall Yen movement fairly benign in reaction to any of that information overnight. So that is pretty much it for the week. If you'd like to get a full rundown of everything I've covered you can access that on my Twitter handle below. Otherwise any questions feel free to leave a comment. If you're watching this and you're not subscribed to the channel please remember to do so. Love to have you as part of the community. And yeah good to be back and I'll be here same time tomorrow. All right guys have a good day and a good week ahead. Take care.