 Okay, very good morning. It is Tuesday the 16th of November and quite a few things for me to get you up to speed on talking about The overnight performance of the Asia pack indices the MSCI Asia pack Index was up for the fourth consecutive day We had of course the virtual meeting between President Xi and US President Joe Biden last night So I'll get you up to speed in terms of what they discussed, but overall a generally Positive development the meeting happening for longer than was anticipated in terms of their discussions We're also going to talk about US politics the infrastructure bill passed in the US What's the next hurdles there with the bill back better bill still to be? Tackled and then we're going to talk about the Fed nomination There's some comments out of a Senate banking committee member that are worth noting also an informed source about what the odds are of a power Renomination and then we're going to talk a little bit about UK Covid the performance of booster shots Also going to look at Tesla Elon Musk dumping some more shares yesterday or becoming quite normal fare now Although Tesla shares moving into technically a bear market territory giving yesterday's move and then we're going to look at what to expect From the day ahead. We've got US retail sales We've also got some earnings reports coming out of large brick-and-mortar retailers like Walmart and Home Depot as well today So that's what's on the agenda first things first though a bit of a flavor for the Overall asset class mix and we've got a bit of a divergence here in their major currency pairs here is euro dollar which euro dollar Tells a bit of a macro divergence story from a top-level macro perspective Here's euro dollar on a daily Continuation chart to give you a bit of an idea here just squeezing this in so from what you can see here from where My video feed is going right. This is 2017 18 2019 2020 2021 So this is looking at much higher time frame chart and as you can see here the 115 area as per these ellipses was quite a key inflection point for price both as resistance in 2019 2020 and also on the acceleration of the breakdown in price here That we've had more recently and we've we've kind of run lower quite quickly here down to that next key technical level We're just below 114 at the moment So we've got euro weakness and at the same time in European equities and now starting to see further out performance This is looking at the DAX future now on the daily looking at the multiple month price reaction And after the low that we saw in October which actually was a respect of the range Which you can see here going back if I just put an ellipse around these price points here from the high that we had Back in March the low in May We came back to test that in October before this latest move higher that we've had and and here we are back up at these Record higher levels and one of the things here to be aware of is that you know what we're seeing from a very top level global Perspective is the Federal Reserve certainly getting tapering underway Talk now about the timing of when the next rate hike is going to come When is it going to be 2022 2023 so on and so forth But at the same time the Bank of England looks pretty much set that they're going to be hiking rates as well when it gets Even this year at the end of the end of the December meeting and all the meanwhile the ECB are tackling what is a quite difficult and challenging situation with COVID at the moment. I mean we looked at it yesterday, but let me just See if I can bring that up again And here we are here is the the kind of COVID Performance at the moment if I zoom this in in to give you the last three months This is what COVID looks like as new Confirmed daily cases per one million people and as you can see here Germany France all seeing quite aggressive tick up ticks, you know, if we're looking at Austria be off the charts To the upside the Netherlands also quite challenging situation at the moment as well So what we're seeing is the the ECB are a long way from any type of real policy action And there's quite a large distance lagging the likes of the Federal Reserve and the Bank of England And hence the reason why you're getting a bit of a divergent play where that's an environment where a lower rate Here is going to be more supportive for equities weaker for the dollar in comparison to the strengthening dollar Reckoning euro that is to the strengthening dollar, which we've had of late obviously having moved to a 50 plus week high last week So that's the general flavor for the euro sterling as I said our performance So euro dollars down 10 pips Cable is actually up about 30 pips and you can see here a bit of a breakout from the relative Consolidation that we're seeing from yesterday afternoon's trade and the reason for that is that a lot of eyes have been on the unemployment data that was that came out this morning and the reason for that is it kicks off a trifecta of UK data of significance for this week jobs CPI and retail sales CPI tomorrow and retail sales on Friday and the reason why the jobs number was so key is because a Lot of the rationale behind why the Bank of England did not pull the trigger on a right hike on the November 4th Meeting as much to the dismay of markets was because of the fact that they wanted to be equipped With the impact of what the end of furlough might have meant for the job situation and in actuality the ILO Unemployment rate for September has come out this morning at 4.3% and that's actually below the expected 4.4 And the average weekly earnings for September was actually stronger than expected So lower unemployment rate and a higher wages both bullish signals for sterling And it's just managed to break out of that that consolidation from yesterday in that range And also the R1 and the futures market for a quick run up towards the R the R2 here So one would say that probably now Economists already have the belief that the Bank of England are going to hike rates in December Just given the current state of play We also had comments out of Bailey yesterday who was saying he's very concerned about inflation So still very much dropping the hints towards a rate hike is pending So the jobs report is probably enough to seal the deal for a deck BoE rate hike Particularly as well that Bailey will probably want to shake off the kind of any notions of him being an unreliable Boyfriend or not delivering on his promises. He won't want that to happen again So I would say for the moment all things remaining equal Obviously we'll wait for the inflation number, but inflation is already kind of net the predetermined kind of Metrics i.e. it's heading higher It was really the jobs market that was lagging that this data now really kind of cements that idea for the market that To the rate hike is somewhat inevitable now for the Bank of England All right, let's move on there and talk about a couple of news stories And I'm gonna start off with what happened overnight So President Joe Biden and the Chinese leader Xi Jinping spoke for the need for cooperation in their first face-to-face summit Virtually of course which went on longer than expected it went on for more than three hours Even though there was no major breakthroughs not that you would be expecting any in these types of talks at the moment This is just about rekindling the as Xi would say the old friend vibes Rather than anything definitive and any type of trade agreements or anything like that so What Xi said was that he was happy obviously to see Biden that both sides face multiple challenges together while they must increase communication and cooperation Jilo had hoped that Biden would return US policy toward China back to rational and a pragmatic path But he did go on to say that he warned China would safeguard its sovereignty security and Development interests and obviously this is talking about the thorny issue of Taiwan of course And so all in all The meeting went went pretty good Nothing kind of concrete coming out of it But opening the the channels again to resume dialogue is a positive step forward from where we were perhaps just a few weeks ago When they were posturing and flexing military muscles and sailing the fleet through Contested waters and so on and so forth. That's not to say that those things will stop anytime soon But all in all a fairly positive outcome as I said the MSCI Asia Pact shares Was up for a full straight session overnight Equity index futures US are pretty flat this morning. We had a completely square finish unchanged across all major three indices yesterday in the US So going into the North American handover It's it's pretty pretty neutral to a Worst case scenario averted I would say on the flip side WTI crew is also about 50 cents and training an 81 hand all this morning Elsewhere the other thing of course that happened last night confirmation Biden has signed into law his $1 trillion infrastructure bill at a ceremony yesterday Biden now has a lot of work to do to restore then given how dragged out These these these talks have been to the passage of these bills obviously highly Contested between the Democrats and Republicans in this divided Congress at the moment So now he's going to hit the road and he's traveling to several crucial swing states to basically sell this infrastructure bill to the American public and of course the rationale there being that he's got half an eye on the midterms which will be happening kind of this time next year with both Control of both chambers of Congress is going to be up for grabs of course and we've seen some Republican gains in the likes of Virginia and so on and so forth and the falling approval rating of Biden So hopefully he can use this passage to kind of galvanize galvanize a little bit of the momentum back in his his favor Democrats are increasingly rarity of the electoral chances obviously after that as I said disappointing statewide elections So other than Virginia, New Jersey's being the other one that happened earlier this month Meanwhile back in Washington. Don't forget that you know, it's far from the job is done for Biden Lawmakers in his own party will this week continue their wrangling over the president's second and much larger proposal of that 1.75 trillion which is the bill back better bill that package opposed by Republicans has been held up by months of Disagreement of course between progressives and moderates even within the own Democratic Party To give you a bit of flavor of where those talks are at the moment a handful of moderate Democrats in the House are withholding Support for the bill into an independent cost assessment is conducted by the CBO the congressional budget office They said on Monday did they expect to publish those estimates by the end of the working week I this week And so it's hard to see any real movement on that at this point in time particularly with Biden hidden the roadshow to kind of push out the The passage of this infrastructure bill. So that's where we're at at the moment Before I move on to the other stories, if you're not already signed up to it, don't forget you can Just simply put in your email here to get hold of my daily Market newsletter I put out at the end of every European trading day. So around 5 30 This will hit your inbox completely free It's where I kind of digest or break down deconstruct one of the major topics day by day That have happened in markets and so Yeah, feel free to to shoot to shoot your email in there I'll drop the link in the video as well if you want to get that email in your inbox Otherwise moving on just having a look then elsewhere some fed comments to be aware of This is feds barking and the reason why I'm mentioning barking is he is a voter At least for now in the fmc and he said it may take several months at least for the federal reserve to understand if high Inflation and labor shortages are offshoots of a pandemic that will eventually ease or reflect more durable changes in the economy So giving a bit of a timeline there and and and I'd say a fairly measured comment Which isn't unsurprising barking fairly centralist in his policy views But gives a degree of kind of support then to the overall mantra of what the Fed has been under the power Stewardship which is fairly just towing the line and and just seeing how the economy evolves and not being too phased by market movements And it's fairly in keeping with that The other thing that came out was of course We're still awaiting whether or not power himself is going to be reappointed as the Fed chair And the latest here has come out of a senate banking chairman Sherrod brown who said he was told by the white house officials to expect quote an imminent announcement about president Joe Biden's pick for the federal reserve charlie gasparino from fox business news and Some of you might not be aware of who he is. He's a fairly well recognized journalist He's very well informed during the financial crisis So he's got a bit of a rep and his source is generally a fairly high quality And he noted that wall street odds of a power reappointment are at just 50 50 So it's still a bit of a toss up. Obviously if it's not power then it's brainard But as we've been talking about before brainard, if anything is even even more One step to the left of being dovish if you like So if she was to get in you might see a potential or some equity bid dollar weakness yield lower type move, but i'd say that um, the actual division between the two isn't really that far Different and actually Powell has seen his odds to decline over time So it wouldn't be the most shocking event ever if he didn't get reappointed My bet for what it's worth is still that powell It gets the nod In time and if that is the case then yeah, you wouldn't really expect any immediate reaction just more continuity which will be of some Relief to markets overall and would likely further cement then the directional trend of generally Equities and and so on that we've had of late All right elsewhere We've had some comments that um boris johnson. He spoke yesterday He said he left the door open to another coronavirus lockdown this winter Warning that people must get their coveted 19 vaccinations and booster doses to avoid fresh restrictions Now one of the things that we're seeing at the moment is this Which is yesterday? You would have seen that all over 40s in the uk will be offered a third vaccine after advice from government scientists And one of the things here is that new data in england show that boosters do not really top up immunity They elevate protect protection well and above the peak of what a two dosage regime would mean if you're taking the covet vaccine And actually as you can see here, then these numbers start to become you know really high Three doses cuts the risk of infection by over 93 percent according to a uk health secretary agency Not only this though that it's kind of A strategy where we're trying to squeeze both ends of the age spectrum demographically so whilst we're now Given a third booster shot To the vulnerable on the elderly and we start to work that down now to be inclusive of the all over 40s We also are bringing up the bottom end by it came out yesterday That the joint committee in vaccination immunization have said that 16 17 year olds initially offered a single dose Should now receive a second dose And at the moment, obviously this is all Supply permitting But this would obviously be quite positive science going into the winter And what i'd say is that boris johnson is saying these types of things I mean bloomberg have really made a bit of a mountain out of a molehill here Chris witty the chief medical officer has said that the nhs is very close to that kind of point of which Starts to become problematic because of the seasonal changes in the flu meaning that more pressure naturally happens During this time of year on the nhs and so any after that outbreak of more covid patients is going to be problematic And sure in theory that would make sense if we then start to see a renewed wave But equally scientists have said, you know, if you go back to remember that covid chart Although we've had a bit of an uptick after that decline since late october Death rates overall hospitalization still remain fairly level in terms of the uk And some would say that actually this peak that we're starting to see now in germany france austria and others The pattern has been that that's a lagged covid case rate pattern from what we had already seen through early october And this has generally been the kind of status quo that we've had since the beginning of the onset of the pandemic back in early 2020 And so what's happening in europe right now? Some would suggest doesn't necessarily mean that then that's going to impact england. It's almost the other way around England had this outbreak earlier and now it's hitting mainland europe kind of like when we had the kent alpha variation Obviously it said to have originated from the uk and ken It really saw an aggressive outbreak here given the higher degree of transmissibility And then it moved to mainland europe which caused some issues. So We shall see so for me. This is more political management coming out the pm And I think it's a sensible move to do but at the moment it's looking good on the booster situation All things left aside the undeveloped world It's still very much struggling to even receive first level Vaccine vaccines, but that's a discussion for a different session All right elsewhere Morgan Stanley just our point point out case, you know euro any of you are interviewing at ms at the moment Doing assessment centers things like that their head equity u.s strategist wilson Has basically come out and you know this absolutely fair play to the to this guy I think there's a picture of him here Mike wilson and he basically is quite a bear on wall street and he said earlier in the year That equities were going to sell off aggressively his 2021 target. He issued at the beginning of this year He said we were going to fall to 3,900 and we didn't get anywhere near there The market just kept going up now his target for the next 12 months is a pullback down to 4,400 And he said that while profits are projected to extend their expansion He wants that growth slow down and withdraw fed stimulus more likely pressure valuations for the rationale while we'll come off the why we will come off this peak But the point being here and what I liked about this guy is that look he said he was wrong If only Andrew Bailey could put his hands up and say, you know what I got it wrong My communication could be better and will be improved going forward and all would be forgiven. I mean, what's quite Just frustrating to watch from the bank of england governor is he's insistent that he keeps blaming traders in the markets Uh, and I think he's slightly forgetting here is that as much as that's true You can't be at the beck and call of traders and markets at the end of the day Your greatest weapon as a central bank is your forward guidance and loss of trust and credibility Is devastating to your ability to manage an economy and he's doing a pretty good job at the moment of Making sure that it's very difficult to really Take anything that he says with any type of credibility at this moment and that that Reestablishing of trust is going to take some time But you know just like wilson did you know what got it wrong? This is what I see going forward and this is why I see that view And you know credit to him, but yeah Just to keep in mind and the ms much more on the bearish side Of the forecast spectrum. The other thing was tesla Shares at the moment did break a thousand bucks, but they they managed to close just above that yesterday But basically what's happened is elon musk offloaded another 934 000 shares on monday So just under a billion dollars worth according to regulatory fighting Filings that got unveiled that adds to the six point nine billion He already dumped last week to meet his 10 threshold. Here's a bit of a visual graphic for you This is the kind of the amount that he sold in millions And the days of which he sold them. So it was november 9th last week when he really Dumped the biggest the biggest load if you'd like But one of the things here is even though tesla's share price has fallen, you know 20% or so since he's Started this process. He's still got a heck of a long way to go Potentially which is going to be super interesting to see where tesla shares really end up Musk would need to sell some 17 million Shares more than double the 7.3 million He's already offloaded in recent days if he's to commit to that poll that he did about The 10 percent amount that he was talking about selling so Yeah, watch out for tesla and obviously we talk about tesla and its volatility that it sees but obviously that does have a direct Translation because of its market cap into the major indices like the nasdaq for example, so definitely keep an eye on that going forward All right all the s&p I should say Having a look then at the calendar for today a couple things we're looking out for We've already had the jobs data as mentioned the morning fairly quiet And actually the main focal point of today is going to be on us retail sales You also get industrial production cap utilization later with the nh hb housing market index Going to start with retail sales though. It's on track to increase The month-to-month readings is better at 1.1 percent from previous 0.7 Many americans getting their Christmas shopping done early There's also lots of risks around you know supply constraints meaning of out of stock Situation the closer we get to a holiday So people generally the behavior likely to be this year that people in front load those purchases Even earlier we've got things like black friday and so on coming up as well Not far off to consider in next month's retail sales report coupled with apparent robust demand for halloween items The early holiday rush has probably given sales a bit of an autumn boost albeit fairly moderate As I mentioned we are also on the flip side going to get Delights of walmart and home depot announced their quarterly results today as far as home Walmart is concerned analysts on both adjusted earnings per share and revenue is expected to rise But basically a slower rate than in recent quarters And the reason therefore is that they were they performed very well during the initial part of the pandemic Concerts a bit of a moderation from those elevated levels Investors will also be watching for walmart's what we call the u.s. Comparable Sales growth x fuel number that metric measures the rate of growth generated by the company's existing stores and clubs in the U.S. Including e-commerce sales and analysts expect comparable sales to rise year on year with growth Accelerating from the pace set in recent quarters, but flat to the year ago quarter. Just as a reference point And then Yeah, that is pretty much it So other than that you've got the api limitries after market as usual from the speaker perspective christine lagarde There's no text expected, but just so you're aware just after 4 p.m. London time Feds bark in speaks again alongside fellow voting, but more hawkish-minded member bostic They're going to speak speaking on racism and the economy at 5 p.m. And then mary daly a voter speaks later on just before the wall street close But that is it going to leave it there let you guys get on with the day and Any questions at all feel free to drop me a comment. Otherwise, I'll see you tomorrow. Thanks very much