 Okay, very good morning to you. It is now the 1st of December, so the run into Christmas truly does begin now and to get it up to Speed we're gonna talk about this guy here Jay Powell who obviously spoke yesterday and somewhat shocked the market because of a U-turn He made on some previous Prepared text that had come out on CNBC where he was really talking up the downside risks around Omicron the new Variant and yet he came out yesterday and really started to talk about hot inflation and therefore The need to drop the view of transitory inflation as a description and thus then start to accelerate the tapering process So a very hawkish turn from the what otherwise is normally a pretty consistent Fed share and as I said that court markets off guard a little bit yesterday So we'll have a look at how markets have recovered So far because much of that move has now been taken back and I'll explain perhaps why we're also doing Omicron update We'll also look at crude or infantry's last night. He has some Chinese data and Erdogan The Turkish president continues to defend his policies as well So that's what's on the agenda, but looking at the charts this morning So to refresh your memory, I'll just look at a couple of these charts So here's Euro dollar for example reflecting the moment of which those hawkish power comments came out it Created immediate dollar strength and actually if I was to put up the T-note chart here Alongside it you can see dollar and yield spiking higher on the back of the hawkish comments And thus then Euro dollar popped lower and T-notes did the same as you can see here though in terms of Euro dollar We've probably retraced three quarters off that sell-off T-notes not quite as much, but you can see we have found a bit of a flaw on that initial spike And they're trading still down six ticks overnight, but I've been grinding up in the overnight session Oil reflecting really T-notes in regards to that type of price movement Little bit of a pop in price through a technical point of inflection You can see here if I just put on a rectangle you can see what I'm talking about Here so you can see that these lows that we've been trading from Going back to the 24th to retest and 26th Yesterday and then the breakdown that we saw the break of that on testing the age of pack session Just as Europe has stepped into the market the gold market as well in a future space pretty thin at this time of day Just snapped up higher So no one singular headline more of a just price reaction point of view there and we reside at Pivot So up around $11 obviously reversing a large portion of that move that was seen yesterday And then looking at the lights of the equity space. Here's the Nasdaq 100 You can see pretty much a U-type shape where the power comments hit and where we're trading at the moment So almost a full recovery of sorts So let's just get up to speed then and recap first of all what exactly happened and you know, one of the things that we've seen so far this month is that The CBOE volatility index so the VIX has not just biggest monthly surge since February of 2020 And obviously comes amid two things the twist here we've seen from Powell and also the latest variant that's come out that's also unsettled the market somewhat Overall then what did he say? He said at this point The economy is very strong and inflationary pressures are higher and is therefore appropriate in my view to consider wrapping up the taper of asset purchases And he went on and said perhaps a few months sooner and of course is what people have been in terms of Many US banks like Goldman Sachs for example who are talking about acceleration of doubling down on the the amount from 15 to 30 billion From January and looking to then wrap up taper by an earlier timeline of March But you remember wasn't that long ago when they commenced tapering that they were hinting towards the summer So we've seen a bit of a three-month or so shift in that He added I expect that we'll discuss that at our upcoming meeting and remember This is the final week that the Fed are able to communicate to the market before they go into that traditional blackout period When they're not allowed to speak at risk of then any leaks of their decision and so forth So that means really they've already got a couple more days to really define then Any more management of market expectations and given what's happened here. Certainly one would expect now that There's probably going to be quite a lot of emphasis now on December 15th when that announcement comes out from the final FMC meeting of the year about the acceleration of tapering He also as I said stopped said to stop using the word transitory to describe inflation. So finally That that kind of namesake gets dropped at this point Money markets are now showing a 55 basis point of rate tightening More than two standard quarter point increases then are being priced in by the end of next year And the first full rate hike remains priced for July at this point in time Well, you know contradictory to that though one thing that did come out yesterday was US consumer confidence Slid to a nine-month low in November. Obviously had a bit of a pick up in COVID-19 cases and infection rates Accelerating inflation or weighing on Americans views about the economy Also as far as kind of Black Friday Cyber Monday went the final sales for Cyber Monday fell short of estimates As well. So it's not all kind of positive. Certainly the Fed's emphasis Seems to be here on inflation But the tail risks here for Fed for Powell are large I think for one the most obviously being Omicron the new Varian and at this point in time. I did find yesterday his comments quite quite a surprise because with the lack of real Deflinable scientific information. It's all very much anecdotal evidence about you know, the strength of the Vaccines to hold up against this new variant the types of symptoms that we can expect because there really hasn't been enough people Infected to really make a lot of those judgments and they'll be coming in due course so with the Fed going into a blackout period and then going into the period where We get more information over those coming two weeks ahead of the FMC announcement on Omicron then it's going to be super interesting to see whether Powell was is right to go is what he's he said yesterday or whether or not he Fails to live up to that hawkish now expectation It's going to build into market prices going forward if the COVID developments were to materially worsen Obviously yesterday one of the things that we had was you know, if you look at this chart of the last quarter Monday Or Friday, I should say we had a big sell-off to bounce on Monday the sell-off on Tuesday You know is where we're all in today, but Definitely, it's that's what's really livened up and seen the VIX post its biggest multi-surge since February of 2020 You remember Feb 2020 that was when all the major selling commenced on the transition really from an epidemic to pandemic status When we saw that market low at the end of March in 2020 So yeah for sure and things are pretty pretty jumpy at the moment The ship has steadied as I said much of the power move has been reversed I think actually when you think about yesterday's market reaction I think a lot of it was a function of what market expectations were particularly then framed by those Releasive prepared texts that came out the day before which were could have been interpreted as very dovish talking up the risks Emerging from the new variant and the fact that he did what he did then was so contrast to that It caused quite a knee-jerk reaction, but in the end when you actually listen to his speech yesterday in its entirety he does acknowledge the risks around COVID and so At this point in time Markets have recovered Again, we remain vigilant for updates particularly around the virus at this point in time to really determine now The impact or the the reaction effect of global governments in regards to restrictions That's going to potentially then depending on how severe impede economic activity And as such then will likely dictate a lot of the rationale whether or not Central banks need to take that into account for their policy decisions going forward And so a lot is really hinging on these updates as we go further in time Okay, we're going to talk about the virus now But before I do don't forget and I'll drop a couple of links on the video if you haven't already done it and you are a Student college or university doesn't matter where you are or what you study We are running one of our open public finance accelerator simulations later on today So we need to do is jump on the website go to Amphimee.com and finance accelerator session You'll see a page like this It's a two-hour live simulation with the team And it will basically rotate you through Different roles as a sales trader market maker and asset manager for you to get a real Flavor of what it's like in reality to perform one of those roles at a large financial institution It's absolutely free. So feel free to sign up and take part This is some cool videos and content to consume straight away And you can just book in there as well if you want to join The other thing you get access to then is is the content hub, which looks a little bit like this And this is where we put up our own kind of exclusive market analysis Conversations I have with leaders in industry career sessions And we've also this week initiated our new amplify me discord channel Which would be accessible via the hub so you can check that out on Amphimee.com Right. Well, let's talk about this virus then and what's going on This is one of the articles that came out last night and it was talking about no evidence existing vaccines will not provide some protection Against the Omicron variant according to the University of Oxford Now AstraZeneca, which co-developed that vaccine with the university said At the end of last week for context that it was testing the shots and already conducting research in countries such as Botswana Where the variant has been identified Now the comment in itself from the University of Oxford saying there's no evidence that defeats vaccines so far Again, it's probably a very factual statement But that's because it includes for me so far and the testing hasn't really been concluded yet So there's a lot of these sort of comments coming out, whether it's to the moderna chief Whether it's politicians, whether it's academic studies and so on and so forth I would say it's very difficult to draw any firm conclusions as yet And I know that's a tricky proposition if you're a day trader But I think overall from a directional basis. We've just got to wait another week or so until we get a bit more clarity about the severity of The case rates rising but layered in on the back of that is really how severe Is the overall symptoms that you get on the back of this and also then the effectiveness of vaccines given the number of mutations That this latest variant has so those questions are still yet to be answered really in my mind And so I would say over time markets might become lesser responsive to these types of headlines As people have kind of got over that now Over the course of the last couple of sessions Pfizer as a timeline Will know in the next two to three weeks on how well the vaccine holds up. That's from their company executive So that gives you an idea of a timeline And then as far as the u.s. Is concerned at the moment One of the latest things here has been the u.s plans strict to covet testing and will require Tests for all travelers in the u.s. While the administration officials are also discussing Additional measures including a seven-day quarantine and retesting several days after the arrival Amid these new concerns Um, I read last night the situation might have changed by now But there's still no reported confirmed omicron cases in the u.s But as what I mentioned on monday a lot of the largest sequencing companies that identify then These latest variants they were closed for thanksgiving So I don't think we should necessarily jump the gun here and think that the u.s is going to get Um away with not having some infections I would say it's pretty much guaranteed that they will at this point in time Given the size that we've seen with the spread so far Um, then the other country was china They've detected 91 domestically transmitted covet 19 cases with confirmed symptoms Now 91 sounds incredibly low But we're talking about a country with a zero policy kind of approach to covet and actually 91 confirmed domestic cases in china is the highest in over a month And so we continue to monitor that obviously it's very important for The supply chain disruption Um potential we're not near that at the moment Given the scale of things, but certainly monitoring the chinese situation is quite imperative on that front particularly with the inflation centric kind of mindset of markets at the moment Important to note though that in mainland china all of those cases that have been detected thus far apparently Have not been caused by the omicron variant All right a few other news stories away from that Crude or infantry's last night. I think this is far insignificant at the moment in context of The virus focus what's been happening in the spr the looming delayed opec meeting about well They won't may stick to plan of adding 400k for the month ahead So, yeah, I don't think these are particularly important, but so you're aware The crude drawdown headline seven hundred and forty seven thousand was slightly smaller than the market expectations at 1.6 We did have some chinese data overnight This was the kei shin Manufacturing pmi and it was slightly converse to what we saw with the The official figure yesterday And it came in at 49.9 below the expected 50.5. So this was actually slightly softer than expected So factory activity fell back into contraction in november subdued demand shrinking employment Elevated prices all said to be the rationale behind was weighing on manufacturers in china at this moment in time And then finally to finish things off a little bit of turkey as it's december And yeah, the president erdoğan said he expects 10 percent economic growth this year And they will boost investments employment production and growth achieved by lowering interest rates And again, this is that that very unique approach or view that he has in managing policy He reiterated interest rates are the cause And inflation is the result of some of the economic difficulties They're facing at the moment and stated there was quote no return for turkish new economic policies. So Yeah, the the turkish lira got pounded yesterday at one point obviously triggered by the acceleration jump on the hawkish power comment Into these negative fundamentals for the lira at this point in time But as the markets kind of Recovered somewhat this morning that has come off the boil a little bit, but yeah, we continue to see record lows in the turkish lira, and they're not abating anytime soon by the looks of it In terms of the canada for today This morning, we do have the various Manufacturing PMIs, but these are final readings for the eurozone uk for november So not likely to yield too much in the way of market interest We've then got really a us focus obviously non-farm perils is coming out on friday You've got us adp national employment that comes out at 1 15 this afternoon expecting an excessive 500k once again And then you've got the us ism manufacturing PMI as well coming out at 3 p.m Which should confirm the strength in the economy, but whilst also highlighting with the price is paid component The ongoing price pressures being experienced at the moment And you've got the oil and petries and the Dewey as usual following from the apis last night. That'll be at 3 30 You've got bank of england's governor bailey Who's being fairly vocal of course on on their rate strategy of late? But he's speaking on a kind of unrelated topic of insurance regulation This afternoon, but nonetheless that's 2 p.m. And then feds powell will testify for the house today having done the senate yesterday So we typically get a recycled speech somewhat from yesterday So much less of interest unless he feels the need to come out and kind of redefine and guide the market a little bit if he Was to see that the the reaction effective yesterday was a bit overdone or overinterpreted But given the markets have already steadied. I think there's very little need for that to happen In all honesty. So that's it. I can let you guys get on with the day Feel free to to drop me a message if there's any questions at all on the video comment section Otherwise, yeah, please do like and subscribe To the channel super appreciative If you could help spread the amplify word and I'll see you same time tomorrow. Take care