 Okay, very good morning all it is Friday 16th of July. I hope you're doing well I hope you've had a good week and just before I begin the normal briefing Don't forget to check out the market watch podcast from us I'll be chatting with the head of trading peers current a bit later on this morning Well, we'll be reviewing some of the major market events of the week and it's been a pretty busy week overall So looking forward to see what his latest assessment is and just a general outlook now going forward So you can check that out on Apple podcast Spotify all the other major podcast platforms So otherwise, let's get straight into it and I'll start off with with the sentiment kind of mix as we always do And it's pretty quiet this morning going through the news this morning There's not a great deal going on but some updates on the BOJ relations between the US and China UK COVID and New Zealand, I should say not Australia New Zealand inflation overnight Which actually breached the RBNZ's inflation target for the first time in 10 years So we can talk about that and then what we also have US retail sales coming out a bit later on as well today But as far as the charts are set up this morning. Yeah, it's been it's been an interesting week If you think about the week as a whole we've had The inflation data out of the US we've had Jerome Powell speak all in all, you know stepping back from the cold face for a moment Yields generally remain lower Following on from the move that we will see we saw initiated last week equity markets are off their Record high levels as you can see here where we had that double top that was seen a few days ago But we are on a daily chart still a ride up there at kind of record high territory from a technical point of view you can see here there's an area of Support yesterday that will now turn resistance in terms of the intraday movements You can see here in the S&P that would come in at around this 43 53 and a half level So it's just been an inflection point since the middle of last week for the US Indices to trade around because the NASDAQ's in a pretty similar shape in that fashion As you will see here So going back on the chart if I make it a bit bigger so you can see And I'll raise it over my camera quite a key level here in the NASDAQ at 14 794 and a half Going back to really last two weeks of price action Resist resistance turns support and pretty decent and now that's restricted some of the upside price action that we saw into the afternoon in US trade and evening and then in the overnight Asia pack session that has held as well So just forming a bit of a short-term range there between around 14 794 and a half and 737 on the downside for the time being so a bit more kind of bearish in the initial assessment just giving some of the clients off the high but in Kind of more top-level view equities on the week still relatively up Considering some of the kind of general risk events that we had which was inflation still being high But the market belief of it still being transitory and then power Not stirring the pot at all and sticking to the script in terms of the view on inflation and the timing on tapering As such then gold has continued to remain fairly elevated on the week Again, I'm just keeping an eye really around this horizontal level of around 18 1820 really although this trend line hasn't been tested three times It would coincide with a test up at around that trend line with that's horizontal support area So I think that's quite key area to watch that also close proximity to yesterday's low in the futures market And you've got the s1 just before that so kind of looking at that range at the moment of 1820 to 35 in the gold future Then elsewhere the dollar index is pretty flat this morning marginal uptick In terms of what euro and sterling are doing pretty quiet overall I'm going to talk about the UK and COVID a little bit But overall assessment is about the worsening of the code situation on a case rate basis That's having a very small trickle-down effect into hospitalizations Is that the market's very much prepped for that? The expectation is things will get materially worse on that front And so it's not having too much of a distinct impact at this point in time And so for the moment cable just respecting a broader range that's been in play throughout the week really And then in crude markets In oil we are trading at an area that warrants a bit of what? bit of monitoring this morning at around this 71 31 level and that also if I pinched the chart starts to bring in some of The lower bound of the price activity we saw towards the middle of last week And that was the overnight Asia Pac low so 71 31 just being tested at the moment and Having a look on the daily chart, you would say that perhaps oil is susceptible to a little bit more downside and the rationale being there that We've got the low that we saw last Thursday and then really this more area of Support I'd be eyeing at around the $70 handle 70 and this coming around 70 25 to the downside So for me, I think oil remains a little bit susceptible There's not really any new updates to bring you in regards to yo e you a e and Saudi As they try to kind of posture and leverage for for a deal making on that supply-packed agreement Certainly no movement on Iran. That's gone completely cold turkey and probably because the fact that the administration has been doing the rounds elsewhere Biden's been meeting Merkel most recently in the last day or so so Iran definitely nothing new there in terms of supply side So we just continue to track oil and it's just fading a little bit from the fatty elevated price levels It was that and don't forget in the context as well. COVID And the Delta variant is pretty rife for globally at the moment So irrespective of the reopening on Monday for the UK the rest of the world Is confronting that issue generally with a lockdown strategy, which is the opposite of course of what the UK are looking to do from Monday So in terms of the news flow I'll get through this pretty quick the BOJ knows no surprises rates unchanged your curve control Target unchanged at point zero or minus zero point one percent on short-term interest rates all very much expected They upgraded inflation on higher fuel costs and they downgraded growth Expecting the economy to expand three point eight percent in the current fiscal year ending March 2022 down from four percent when they last issued that forecast in April so no surprises there at all and no real reaction in the Japanese yen New Zealand though was quite interesting their Headline CPI year-on-year for Q2 came in at three point three percent above the expected two point eight But check this out inflation has gone from one point five percent up to three point three percent And so yeah pretty meaningful part move upward But we have been seeing this globally a byproduct of the general price pressures that we've seen from bottlenecks creating certain Price pressures on used cars again same case in New Zealand fuel prices energy has been a key component of lifting Price pressures and home house construction was also contributing factor for the Kiwi figure a rate hike now is As the headline suggests 90% chance of the RBNZ rate increase in August So their timelines pretty narrow if you remember Actually the Kiwi dollar broke out just a few days ago. And so the actual move overnight the Kiwi was very quick fire Spike higher on the back of the the inflation number But it hasn't really sustained much of that move because the Kiwi was already higher Markets were already pricing in increasing rate hikes after they said that end their Kiwi bond buying program So they're already leaning in that direction So it doesn't come as too much to surprise the fact that people are now Increasing their odds of pricing in of when they're going to remove rates, but they certainly would be a real Frontrunner in terms of that normalizing of policy And then from the US China point of view the tip for TAC kind of goes on the US is preparing to impose sanctions today on a Number of Chinese officials over Beijing has cracked down on democracy in Hong Kong. So again the markets really Desensitized to this at the moment So unless you were to hear something of extreme elevation in this in this kind of confrontation And typically more more practically if they start looking at Things around tech stocks in particular just given the magnitude of how big some of these companies are then it can get interesting But at this type of level this news flow isn't really having an impact on global markets at this point and then for the UK Just having a look at the UK we reported just under 50,000 coronavirus infections That's the largest number in exactly six months. So over the course of the last week It's gone from around 32,000 to 48 and a half thousand or so The death rate, thankfully though is still very low And I was just looking at hospitalization. So this is the actual case rate So case rates are accelerating at a much more rapid pace than we saw in the autumn of last year But fewer people are being admitted to hospital And so this is the comparisons even though the trajectory here is much steeper in the spread of the more Transmissible Delta variant the actual result of hospitalizations Remains considerably lower and hence then the strategy about pushing forward with the reopening on on Monday UK ministers are said to be money putting France on the travel Red list alert you remember there's that green amber red list because it was originally going to be a hundred and fifty nations that UK citizens could then holiday destination to but I would say that that number is probably gonna continue to shift down from green to amber and ultimately into red over the coming weeks most likely because Mainland Europe still as well confronting the increasing case rate across much of the the mainland eurozone at the moment. So That doesn't come as much surprise at all. And as I said the pounds not really moving too much I think really I'd expect that to be the case but continue to track it and let's just see how quickly we do rise up to 75 K 100 K cases It does that happen much quicker than we anticipated and if so where is the kind of endpoint on that figure? The modeling would suggest that hospitalizations will still be smaller Ultimately than what we had in the second wave and hopefully that is the case in reality but unless Anything different from that. I guess is what's going to be more Potentially impactful for sterling in a negative way if that were to develop, but that's not the base case scenario at this point in time Far as looking at the calendar for today Overall more of a US centric session with retail sales on the docket the HI CP final numbers for June come out this morning as I said though final readings not expecting any rash into that for retail sales They're Roughly going to be Unchanged in June versus the 1.3 percent decline as you can see here We have the headline that we saw back in May a few things to note Auto sales will likely be the culprit of a lackluster report Analysts at Credit Suisse though do note a couple of factors to be aware of They cited high frequency data and they said that restaurant spending will have continued to pick up in June But goods consumption is likely to have declined because of the fading impact of the stimulus checks So it's kind of you've got the further reopening happening more people going into restaurants to dine as normality kind of returns More broadly across America, but at the same time the stimulus check impact is fading Which will obviously pump the numbers on two previous occasions back in the January and March figures and today We're going to be getting the June reading One potential upside surprise that could help elevate the numbers could come from non-store retailers And the reason for that is because you had Amazon Prime Day which was actually in June instead of the usual July events. I actually brought that forward And so worse keeping that in mind That is non-store retailers if that numbers particularly elevated then you could extrapolate that out of any longevity of that being a Second more consistent retails spending pattern. And so therefore it could nullify any upside figure if that was particularly prevalent Otherwise then you've got University of Michigan sentiment coming out at three o'clock It's expected to be relatively unshaged I wouldn't be looking at that for too much excitement to be honest and Feds Williams Speaking off-topic on culture in a post-pandemic marketplace at 2 p.m. This afternoon and no real major big earnings coming out today So that's pretty much it fairly quiet and on the calendar overall retail sales probably your highlight from overnight Not a great deal to really initiate any shift in sentiment So I'd just be keeping an eye on the technical setups on the charts at the moment And keeping an eye on those aforementioned levels. I just went through so other than that Again have a fantastic weekend. I think the heat wave is finally arriving in the UK after a pretty miserable run so enjoy the sunshine kickback put on the podcast and If you like it rate it review it leave a comment. It'll be much appreciated. So alright guys. Take care. Have a great weekend