Fed's Jerome Powell LIVE at Jackson Hole

Okay, hello folks. Just going to give it a bit of time for everyone to get up and running and online. Hi, hi everyone, just getting the feed up and running, so just going to give it a minute or two before we begin the the coverage, but hope everyone is doing well. Who have we got online? Let's have a look. Uh, Onkar, Alexander, Priyesh, uh, someone's got a name that I can't really repeat live on air. Francis, Ken, hope you're all doing well. Good to have you with us. Yeah, we'll give it a minute And then we'll do a bit of a briefing of what's going on more broadly. Eddie, team Amplify, good to have you online. Obviously Eddie, you guys will know from some of the videos and podcasts we did last week, stuff like that. So good to have Eddie on, on the call as well. So feel free to fire any questions his way. Timon, hello from Germany. Good to have you online. How are you feeling about the shift in polls? The SPD, was it a few, few weeks to go to the German federal elections? Okay, we'll give it until 10:02 and then we'll have a bit of a run-through of of what's going on in terms of some of these Fed comments. There's been plenty coming out in the last, well, last few minutes in fact from Bullard. But Kaplan, Bullard, Mester, all the hawks have been out in force ahead of Powell. And so we'll have a bit of catch-up on that, and then we'll talk about what are we expecting from Powell. Then we'll flip over to the charts and look about how that might play out in terms of market reaction across the different asset classes. Yeah, George Backhouse, good to have you online as well. George is part of the team. Happy Jackson Hole to you too. Yeah, I'll give it another minute and then we'll we'll get into things. So yeah, just getting everyone up and running online. I have already noticed though that one of my cameras, my secondary camera, when I flip screens to the charts, for some reason isn't pulling. So I'm afraid now that I am live, I cannot rectify that. So you're just going to have to— probably better, it's more beneficial to you, you can see more chart real estate rather than my face, which when we're looking at the charts. So there won't be the usual window of me in the bottom left-hand corner, but you'll be able to see everything, of course. Um, got, got my partner's news squawk as well. They'll cover the news when it comes out in real time, so we'll flick it on, let the analyst squawk out the information when it comes out, and I'll flick on my mic as well so we capture the news as soon as it's released. Okay, yeah, but any questions at all? Obviously a bit different from being in a trading floor environment. I haven't got people all around me, so please be patient. I'll get around to any questions and stuff as I'm trying to tackle things. But Eddie and George are in the room as well, so absolutely feel free to fire any questions to them. They're more than happy to help.

Paul's comments now at the top of the hour. For those who want an in-depth briefing, come look at the news feed we have back to London time posted at our final— where you can also get the link to watch.

All right, so let's have a bit of a chat then about what's been going on, how markets are moving. Now, one of the final things going into this is we have had quite a bit of Fed commentary just coming into this release. Bullard, Kaplan, and Mester. And if you know your FOMC members, which I know all of you are experts on, then that's that table that you need to know or be aware of at least. And the reason for that is, is because identifying who are the doves and who are the hawks, where do they reside on this scale, and then are they a voter, non-voting member, um, to try and quantify the gravity of, of their what they're saying, what their view is about future policy, to the overall decision-making of the people who have the vote to— or the ability to vote at this point in time. So Bullard, Kaplan, and Mester, who— if you look at Mester, Mester's actually moving more center ground, which might have been true before. I mean, this was updated on the 5th of August, but Mester is typically known as a, as a hawk. So her coming out and saying she's comfortable that the Fed has met substantial further progress with that threshold, comfortable to start talking taper plans in September, I don't find that too surprising, to be honest. Those comments were made within the hour. We then had Fed's Kaplan and Bullard, the two uber-dubs. Kaplan reiterated that he wishes to start asset purchases adjustments as soon as possible. Anthony Bullard is still speaking really at the moment, and he's reiterated that would like to taper now and finish at the end of Q1 2022 and need to have optionality in case inflation does not moderate. And certainly he is on the outer extreme of the most hawkish view out of everyone. In terms of the market reaction to these comments, I mean, it's been fairly tame because the The things that these people are saying are not greatly surprising, to be quite honest. And one thing that you are seeing right now going into this eagerly anticipated speech is quite a large gyration in some of these currency markets. In fact, the dollar just been breaking down and weakening here a little bit going into the Powell speech, in fact quite aggressively. And that's led to a decent bid tone here going through these major pairs at the moment. And so S&P following, uh, NASDAQ pretty choppy. The T-note's been a bit all over the place so far, and I think the rationale behind this really going into the actual text that we're about to get is the idea that liquidity is going to be pretty thin No one's going to want to be sat in a position going into the actual release. And so by fact of that, you start to see quite wild movement going into the actual release. And hence the reason why there's quite a high degree of volatility now. And you'd expect that to be the case as we go into the final 8 minutes before the text hits the, hits the newswires. So the main thing is, despite the hawkish commentary that's been coming out, the dollar's not buying it. In fact, the dollar's moving lower going into the speech. And equities, in terms of the S&P at least at this point, is remaining relatively supported. And we'll look at that from a technical perspective in a second. And the Dow also has been moving higher, the future trading back above its pivot level. So quick, quick run-through then of what we are expecting from, from the main man himself. And I honestly think that this, this meeting, if you if you watch the briefing I delivered this morning, I think it has been a little bit overhyped. I do think people are perhaps looking for an inappropriately large amount of information to come out of this speech, which I don't think necessarily is going to materialize. And the reason for that is I think Powell is too skilled, he's too long in the tooth now. He's gonna just fairly eloquently manage, I think, expectations to the September meeting. Which is happening on the 22nd. In between that, don't forget next week we got nonfarm payrolls. And I think the jobs report is a really key component, of course, filling that pre-pandemic gap, which is still fairly significant at this point, to constitute then the decision-making around all of these things to do with taping, not just the commencement of tapering, but the speed of it, the duration of it. So on and so forth. So I actually think overall everyone seems to think, you know, this is the moment that taper is— the beans are going to be spilled. But I think you could be in for a disappointment. And if that is the case, the type of movement I would expect is the type of movement we're seeing right now, which is the dollar is weakening and that's fueling a bit of a bid in the major pairs. It's propping up gold and the equity index futures Anthony Notes at the moment. So be interested to see going into this how it's going to react. It's going to be pretty noisy over the release, as you'd imagine, because my, um, my understanding is we'll get a batch of comments and then we'll have to pick our way through it. And obviously we'll have the Squawk on, and then I can, I can analyze it in real time. Key areas though to focus on are going to be US economic growth. So instead of being explicit about tapering how does he talk about the Delta variant and the implications that that might have then for his views over tapering? Now you remember Kaplan said, who has been more aggressive in his taper views more generally speaking, that he almost dialed back his enthusiasm because of the Delta variant. Anything towards that would be much more constituting a dovish type of reaction we're more likely to see. The other then is the, the timing and length of tapering. Again, I think this is really for the September meeting, not for now, but those are all very important points, not just the initiation of it. And obviously a September announcement, October commencement is more hawkish. Something more like a November commencement would be slightly more in fitting, I'd say, with market consensus. The other thing is then guidance on the rate hiking cycle. When will that start? I don't really think that's too much of a focal point right now. So just given the timing, let's have a look at the charts. And so as I said, these major pairs have caught a bit of a bid in the currency space. And so Cable just coming up to some of the highs that were, um, capping some of the first half of the week's price action in the pair. We've obviously got an upside target that would be the weekly high that would come in only around 25 pips or so above the current price if we move through the R1, which is also the top of that price, um, kind of inflection point short term between the support area previous Asia-Pac session and yesterday midday. So yeah, definitely keeping an eye there. The dollar definitely is on the back foot going into this for sure. In the equity space, you've got a range that we're respecting at the moment as far as the S&P is concerned, which is identified by these kind of areas here. So 84.25 on the high, 73.75 on the low. Definitely wouldn't want to pre-commit to any kind of fixed view going into this. Much more prefer to just see the information come out and then look to make decisions accordingly. Upside areas, of course, would be targeting around these previous highs that we were seeing, um, reference points early in the week, and the low of course that was seen in the overnight APAC session. And then you got the all-time high not far off as well up here that was printed just a few days ago. As far as gold is concerned, again, very choppy now as we go in. So it's gonna— liquidity is gonna get pretty thin, and you're going to see it flying around a little bit. The main point here is just to be patient, remain calm, you know, don't just jump in and get drawn into the price action. Let's just understand and compute what it is that he's saying. And so yeah, near-term levels that I'd be watching would be kind of as I've marked up here accordingly. So any downside break of the, uh, the candlestick on the 30-minute bar or 60-minute bar to break down targeting then the low that was seen from yesterday afternoon, and then the weekly low printed on Monday APAC session at 1778. On the flip side, um, we've got the R1 acted as resistance early in the futures, 08, and then 12 on the upside to keep an eye on. Okay, got about 90 seconds. Oil, not really that interested in, much more of an indirect product by fact of really dollar fluctuations, so very much more focused. I think best trades materialize in currency, uh, yields. So fixed income, 10-year, bottom right here. Gold, top right. Probably secondary then equities because it can be a bit messy. Um, you generally see more pronounced reactions in the NASDAQ overall, so I'd bear that in mind. And we've got a minute to go now, so I'm going to hand over to the Squawk guys. Let's listen in as it comes out.

10 seconds to the top of the hour. And text here from Powell: his view is that substantial further progress test has been met for inflation. Has been clear progress towards maximum employment. At July meeting, he thought could be appropriate to start taper this year. Since July has been more progress on employment but also further spread of the Delta variant. Will be carefully assessing incoming data and evolving risks. Timing and pace of taper will not be intended to carry a direct signal regarding timing of rate liftoff. Much ground to cover to reach maximum employment. Time will tell whether we have reached 2% on a sustainable basis. Despite challenges, US economy on path to labor market like before the pandemic. Baseline outlook for continued progress towards maximum employment and inflation returning to that 2% mark. Outlook for labor market has brightened considerably in recent months. So these are fairly constructive comments here from Powell. Favorable conditions for job seekers should help economy recover, cover, quote, considerable remaining ground to hit maximum employment. Even after asset purchases end, elevated holdings of longer-term securities will continue to support accommodative financial conditions. Changes they made last year to the statement are well suited to address challenges. Incoming data should provide more evidence of supply-demand imbalances. Inflation at these levels is a cause for concern, but inflated— elevated inflation readings likely to prove temporary. For now, policy is well positioned. So I have seen a bit of two-way action in the T-note future over here. We are just seeing some positive ticks over here. And again, he's just echoing what he— what a lot of what we heard in July.

Yeah, I'm just going to turn the squawk off. So yeah, definitely a bit of two-way price action. So good example of not getting caught out here by just drawn into price activity. Overall, the point is here he's not really said a great deal other than what we were kind of suggesting. So he has said that things have progressed. The view is that substantial further progress threshold has been met for inflation. There has been further clear progress towards maximum employment. For now, policy is well positioned. So he's not said we're going to taper. He's not said we're starting tapering in October. He's not said anything really specific. So this was type of the reaction. Now we're starting to see that we thought might materialize, which was people overtly looking for clarity. And all he's doing is saying, yeah, we're getting to that point, but you guys are going to have to wait till September. And so the market now is showing signs of relief. So the dollar's getting hammered, pairs are rallying, gold spiking higher, and equities and bonds are moving higher. So this is a monetary policy kind of reaction and effect of relief. We're not tapering tomorrow. Things have progressed. We will be tapering. We just need to wait. So all in all, this is a very measured, um, kind of concerted effort to just manage expectations. Things are going to progress, and all things equal, then I don't think it really alters the timeline. I think the September details will come, but for now, the market reaction is a function of the over-leaning kind of expectation that today was going to kind of yield real clarity, and that hasn't really been the case. So that's my assumption right now to explain the movement that's happening. So let's have a look at these charts. S&P 500 first. So S&P 500, you see our pre-marked up levels we had on the chart. So you had a big breakout on the initial— so most things dipped and drive because you could have got easily flipped on that first Bloomberg comment, which was talking about substantial further progress has been met. If you actually look on a second-by-second chart, you'll see that the equity market, the fixed income market, gold market, everything got hit very momentarily because that in itself would sound pretty hawkish. But then it wasn't really followed up, and in context with the other comments that he made, it's definitely just a measured way of saying things are improving and we're getting further to the point of tapering. Without definitive taper being mentioned. So then we turn and look, this is why it's super important to mark up your technical levels ahead of time because when it is quite noisy, you're trading a news-fixed event, it's too difficult to be trying to judge multi-asset movement, trying to mark out levels, you have to do that in advance. So you can see here that 92 was the first target for that fast money blip and A lot of people would have exited on that flash move higher. Now it's key to see whether or not we're having another test up at that level. Then you're looking for a break, pullback, and perhaps then we get an extension back up to those all-time highs. So still looking fairly bullish at the moment in equities. And there you go, the S&P just having a little test on there at the moment. What's helping that S&P and looks quite nice is look at the Dow now. The Dow's had a really nice breakout and there's not a great deal of resistance here in the Dow, I'd say, until we get a little bit higher up. I'd say probably this level you can see has been a relative inflection point over the course of the last week. So 35355, a little bit higher than where we're trading at the moment. And as far as the Nasdaq is concerned, obviously a breakout of the very tight range that we were trading through much of the morning, as you would anticipate going into the speech. And so we've had a bit of a breakout here, and we're coming up to around the highs of some of that price activity we're seeing back end of Wednesday. Before we've got a bit of an exhaustion on that initial pop higher. So those levels kind of holding up for the moment. Market's not too keen to push it on yet in the S&P from what we were just looking at. All in all, as I said at the beginning of this explanation, what's happened here is pretty much in fitting with what we were looking for at the beginning before this event came out. It's all pretty much as expected. Again, he's not really showed too much. He said enough. The show goes on. We wait for September. And so hopefully, if you know, if you watch the briefing this morning, this is kind of what we were trying to talk about, um, could be the, the end result. So yeah, what a week of waiting to just see this materialize. I'm sorry. That, uh, Powell, if you're, if you're a prop trader, hasn't delivered you something more juicy. But I'm afraid this is markets and Powell's good at his job. And, um, yeah, no real fireworks to report, I'm afraid. Um, but yeah, what do you guys think? Let's get some questions in. Uh, Ed, good to have you on the call, Ed. Hope you're well. Hope, um, you and the family are all and have been COVID-free and you're doing good in the market at the minute. Um, yeah, yeah, show goes on. Yeah, just see your comment. Absolutely. I think that's right on the money. I think nothing, nothing surprising here, but I, this is what I struggle with. I don't know why people were looking for something surprising. Um, I think it was a bit overhyped. I think the market has this behavioral psyche where it tends to latch on to these singular things like just the con— just the concept of tapering, not even the duration, the composition. And so I think we've got a bit overly emphasized on that singular point. And so this is a bit of a, yeah, very short-term relief, doesn't really change the needle. If you were looking at things like volatility structures and things like that earlier in the week, it was all indicating that the general, you know, real money was looking at a situation where this wasn't really going to be too much of a big event. The implied kind of volatility rates were, you know, 1%, which was bigger than a typical Jackson Hole, but very contained and kind of explanation of behind what we're really seeing. I think the expected outcome has kind of materialized. Um, yeah, who else have we got? Let me just have a look. Yeah, Neil. Neil, thanks for, thanks for leaving kind comments on the channel. I do appreciate it. You know, I do have, um, conversations with the team about my briefings because I do make some notes in the evening and then I'm up pretty early to deliver that, so Neil, I do appreciate your comments when I'm putting those out. Francis, I like your style. Big load of nothing, have a nice weekend. Yeah, absolutely, go and enjoy your weekend. But look, we're just starting to see the S&P having another little look on the upside now, so let's see if the equity market can break. I'd say here for the S&P though to break higher, let me just make So I've got S&P right, NASDAQ center, the Dow on the left. Now from a, from a timing point of view, you can see the S&P's at that level, but look, it's a bit reluctant to break on through. For me, I need to see the Dow break this level here with the NASDAQ at that level. If it doesn't, then the S&P to me feels unlikely like it's going to push on despite the threat that it's showing on that resistance level at the moment around 9293. So you've kind of got a near-term cap technically here in the NASDAQ from yesterday afternoon and the prior overnight session, and in the inflection point here you can see through midweek in the Dow. So keep an eye here if that S&P is going to push on, right? The NASDAQ's just having a look now, so now I'd want the Dow to follow suit. If we see a coordinated synchronized break then it's on. Then the S&P can push up, maybe we get all-time highs. So the NASDAQ's having a look now, so let's keep half an eye on that. NASDAQ session highs again. S&P wanting to— it's grinding up. Now comes the Dow. Dow's just ticking higher now. Here comes the Dow on the test, first test now at that level for the Dow. See on the left chart here, so it was that— so NASDAQ now, there you go, just final break and now it's on. You saw that NASDAQ catch a bid there. NASDAQ now right at that high, so the S&P can, can kick on now. So the NASDAQ though, it's a pretty decent level here, so any fast money short, short-term, long positions you'd probably be wanting to book it, if not exit the trade at these types of levels. I'd say you've got your little extra kicker there. Now the Dow's had a, had a, had a follow-through here. There's not too much technically now for the Dow other than the R1 on the upside. So the S&P, you just looking to see if we can get up there, squeeze out a few more ticks up in toward that 98 all-time high again. But yeah, you could see then your conviction rate. There you go, Dow another push, S&P another push. So the conviction rate when you're trading these kind of momentum markets is try— what I like to do is try and look at the 3 indices together, and the timing of exit and management of those trades would be indicative to how all 3 are moving in, in synchronization. So look, the NASDAQ's at that level now. So look, still comfortable to hold that S&P, but now we're a tick at that high now I'd look to take some. So I'd say now in that long in the S&P, now's optimal because people will be looking to scale out of that short-term fast money move a tick or so ahead of the high just so they get the fill. So there you go, test now 98. I'd say if you're in that long, you want to be taking quite a bit off now at that level. Decent move we've had off the back of that, um, that statement. Let's just have a check-in on some of the other asset classes. Yeah, Dow's still got a bit of room. So yeah, currency markets then, it's all playing as per the correlation effect in regards to the equity bid. Yield still on the back foot and consequently dollar weaker. So cable's having a decent time at the moment. Cable in itself though coming up to a bit of a near-term area of technical resistance. So you kind of got those lows here, here, and that high momentarily here back on the 18th. We're just around there at the moment, so perhaps getting a bit exhausted there with a technical point of resistance and cable just above for the euro. Let's just stretch this out to 30. Let's go to 60. Yeah, the euro, kind of similar to cable. So cable and euro have got pretty significant resistance, um, kind of obstacles to further appreciation here. 1.1808 in the euro future was that mid-August high. So that in combination with the cable high, so kind of like we were watching those US equities I'll be watching these currency markets in a similar fashion. So the two markups here is per the rectangle here in cable and there in the euro. So again, I'd see that given that they're both quite uniform in areas of resistance, there's pretty strong areas to hold at this point with the combination of the fact that equities are at the extremity of some of these moves. Unless the S&P kicks on and T-notes catch a further bid, then I'd see it hard to see these levels being broken in the currency space. But look, have a look at the NASDAQ. The NASDAQ definitely is, as I said before we were heading into the release, the NASDAQ tends to be the outperformer. Underperforms, outperforms generally in the equity US space. And here we are, all-time highs again. Yep, testing all-time highs now in the NASDAQ. So final exit now on any of those longs, and you can go off and enjoy the bank holiday weekend if you're based in the UK. All right, let's have a look at At, um, any questions at all, let me know. Yeah, 10-year still catching a bid here, so keep an eye on the dollar at the moment because if the 10-year catches a bid and equities remain higher as well, because the Dow I'd say still got a little bit of room upside, the S&P needs to break that level of 98 to push all-time highs. T-notes looking favorable at the moment for that. And if that does happen, you might be a catalyst for then a bit of a push on those upside levels in those pairs. If that happens, it's almost self-perpetuates the move and everything gets a little extra wave of continuation from the directional moves that we've already seen. Uh, gold obviously liking it with the dollar move, so yeah, nice bid there upside. It's pretty choppy up here. We're getting up to that area, I'd say, of these kind of highs and lows, that previous high we had going back on to the beginning of the week. And then just above there you've got the R2 and then the, the recent high, weekly high at 1812. Definitely got to be super proactive with gold because it flies around far, a far quicker pace than those other products. Alright, just a quick one while I've got you all on the call. Feel free to follow me on Twitter. Here's my handle. I put out a morning call every morning that quite a few people find useful. So my notes that I issue ahead of 7 AM every weekday, so feel free to check that out. There's other stuff, research reports I find interesting, little snippets of market intel, things like that. So feel free to follow me on Twitter if you would like. I'm just sharing the links in the chat on YouTube if you're watching there. The other thing is Amplify is going through some pretty significant changes at the moment. You might have recognized that our name now is AmplifyMe, not AmplifyTrading, and the reason for that is we are going through a real positive change and we are pivoting out of the proprietary trading scene, which was our initial founding kind of purpose. And the reason for that is because Some of the proprietary technology that we've created is now being adopted by nearly every big bank on Wall Street as part of their recruitment and training technology that they use. And then we work with a number of the world's kind of leading business schools as well. So we're very much focusing now on the, on the students, but obviously we'd love to have everyone as part of the community. And actually what we're doing is creating a hub that's completely free. It's going to have loads of exclusive content just on that hub. Um, but there's going to be other more advanced training and stuff that you can do if you would like. So I've popped the link into the chat on YouTube. The new platform, it's a brand new platform, it will have like a hub with loads of cool different broken up segments of information, stuff like that. Um, you just need to pop in your email and you'll be alerted with some more information when, as soon as that goes live, and what you need to do. But otherwise, look, final look at the charts and I'll let you guys get on and focus your trading for the rest of the day. So yeah, pretty much continuation really of what we have been seeing. So equities still on the front foot and there you go, look, T-notes still edging higher has meant that with the NASDAQ and Dow pushing on and with some space technically to the upside, now the S&P can open its legs 4,500 on the upside now. So new, new milestone for the S&P, 4,500 just printing in the futures. Silver, gold still, still catching a bid, but those major pairs in euro dollar and cable still not able to push on just yet. So those areas of resistance still pretty, pretty key at the moment. All right, I'm going to leave it at that. And wish you guys a fantastic weekend if you're based in the UK. Enjoyed bank holiday. Um, Gavin, hope you're well. Um, I hope everything's working out for you and, and your friends and loved ones are all safe and sound. Uh, Simon, pleasure, good to have you on the call. I know you often leave comments on the videos, so Really appreciate that. I love the engagement on the videos as well, so definitely appreciate all of the support. The recording of this will go up if you need to rewatch it for any kind of learning purposes. Feel free to drop me a comment on any of the videos. Don't forget as well, I know you guys are watching this on YouTube But don't forget to subscribe to the YouTube channel if you've not already done so. There's going to be tons more content that Eddie and I are putting out on social, and generally speaking, so my briefings are going to now start going out early in the morning, so they'll be up live on YouTube at around 7:30 every morning. So check that out for your kind of morning call. As well. So don't forget to check out the latest podcast. Piers and I are going to jump on and have a conversation actually, um, in probably the next hour. And then that podcast episode normally would go out on Friday morning, but it's on Apple, it's on Spotify, Google Podcasts. And it's basically where Piers and I just kind of talk very informally, wrapping up the week of everything you'd need to know and our thoughts about what it means for markets and all the hot topics, um, at that point in time. Uh, but that is it, folks. I'm going to leave it there. Wish you guys