How To Trade The News | Applying Fundamental Analysis To A News Driven Event (March 2021 FOMC)

Hi there, Anthony here, and hope you're having a great weekend. Just wanted to bring you the full recording of the Amplify Live coverage that we did for the FOMC meeting earlier this week, the March 2021 meeting, because I think it serves as a really good insight as to how does a global macro trader approach an event like a major central bank decision. So within this session, it's quite, quite long, but I think there's a lot of value there in different areas. The preview about how to break down a complex event like a monetary policy decision into something more definable and into an actionable trading plan. Then the live analysis and execution for Tim on the trading side, and then the kind of post-analysis and then into the press conference as well. So a good example of seeing, you know, how do you genuinely look to try and tackle and trade the news in real time. Any questions at all for either Tim or myself, then just feel free to leave a comment below. Absolutely happy to help if I can. Otherwise, enjoy the session. All right, hope everyone's doing well. Wednesday, 17th of March, we've got the, the latest FOMC, the Federal Open Market Committee meeting coming up. And yeah, a little bit of interest in this one, uh, particularly because of the 8 Fed meetings, just a reminder, that we get per year. This is one of the alternate ones, so on a quarterly calendar basis— March, June, Sep, Dec— where we get what they call the Summary of Economic Projections, the SEP. And I'm going to show you what the SEP looks like, in fact, because I think it's good for you guys to see it so that other than just seeing headlines come down the tape, you kind of know, you know, where it's coming from. But overall, the main kind of context here with this meeting is that a few different things, and I'm gonna, I'm gonna bring up, uh, part 1 because kind of like the ECB format, the Fed follow a similar vein where they have a statement released. In this case, we're going to get at 6 o'clock. Remember, it's normally 7. It's because there's a time differential change for this week and next with the US clocks changing before ours. So it'd normally be 7. You get the statement, and this is what the statement looks like, and then the press conference follows half an hour later. So So that will be half 6 tonight. The statement here is pretty short. This is the uniform structure of which the statement follows. And it's very much a kind of recycled text that sees very minor alterations. But those alterations, of course, can be quite meaningful, as that then tells us what they feel about some of the key factors that are developing in the economy. And subsequently, then, we start to make assumptions about their future policy path. Now, the structure of this particular statement is always quite uniform. So the first paragraph is, we're committed to use a range of tools to support the US economy in this challenging time. This is quite a key point, though, because this is the mandate of the bank— maximum employment and price stability goals. So maximum employment and generally then keeping inflation in check to that respect. And obviously, it's the latter that's been challenged given rising inflation expectations. On certain metrics. They are the highest they've been since around 2008, and we have seen the first green shoots, if you like, of inflation starting to heat up a little bit, and we're expecting that to happen more aggressively going forward. This is quite key as a focal point, but it's unlikely to change. We've heard many times from Powell and his colleagues about how they feel about the general status, which is policy is staying where it is. And so they're not going to comment on every twist and turn in the market that yields have gone up, equities have softened. After that initial mini tantrum the market kind of had where equities were trading quite heavy on that initial breakout in yields about 2 weeks ago, if you think about it, yields are still higher, but equities have got over the hump now. And so the Fed deploying that kind of strategy of, look, just let the baby cry, it will sort itself out in the end. And so we're expecting that very much still this time round. Otherwise, here it's then about COVID-19. And actually, if you read this statement, uh, don't forget this is back in January when the Fed had their previous meeting, because again, it's not every single month, it's 8 in a year, so it's a little bit longer. They said then the pandemic is causing tremendous human economic hardship across the US, around the world. The pace of recovery in economic activity and employment has moderated in recent months, with weakness concentrated in sectors most adversely affected by the pandemic. Weaker demand, early declines in oil prices have been holding down consumer price inflation, so on and so forth. The idea here being, when you read that paragraph, it sounds very downbeat considering where we are now in the middle of March. Now, that's fast-forwarding, what, the best part of 6, 7 weeks. And if you actually think about it, the COVID rate cases have declined, deaths have declined, vaccinations have picked up. And if anything, where the US are outperforming now the UK in that regard, in terms of the amount of vaccines administered and the rate they're doing that. And the economy generally is picking up as it's starting to reopen. And you've got a stimulus that's now appeared and been signed off and obviously into the, the system in terms of the checks now. So things have decidedly got more upbeat. So you probably would expect then some alteration here just here and also in the press conference as well, where he's probably going to sound a little bit more optimistic than the last time out. The other stuff largely is going to remain probably unaltered. And things like the interest rate, so the federal funds rate, 0 to 0.25% will remain unchanged. There's no way they're going to change that anytime soon. That's a conversation of many years down the line, which we'll talk about in a moment. And then in terms of their QE program, So $80 billion per month, and agency— so mortgage-backed securities, $40 billion. So this is the kind of $120 billion that they do every month. And that's going to remain the same for the time being. So as much as the market's become more optimistic, it hasn't got to the point yet where we're actually going to see significant tangible policy change. So this part should be the statement some subtleties, perhaps slightly more optimistic is what the market will look for. The other thing we're going to get then is this. This is the Summary of Economic Projections. So as I said, I wanted to show it to you so you can see what it looks like. So this is the actual report, 17-odd pages. But there's really one page in particular, which is this. This is basically the table that shows the real change in GDP the unemployment rate, the PCEs and the core PCE numbers. So remember, when we talk about inflation, as much as the market is slightly obsessive over things like CPI, the Fed's preferred measure is core PCE. So that's why the inflation measures are PCE. And then you have arguably the most important one, which is, okay, given the outlook then for these measures of the economy, what does that subsequently end result mean for where interest rates will be. And what we're able to do then, if we skip down, this is the last dot plot matrix for rates that came out. And how the dot plot works is then, remember, we're now— we're looking at the end of 2021, the end of 2022, the end of 2023, and in the long run. So each one of these dots, they ask the question of the Fed at the end of their 2-day meeting, where do you think rates should be at the end of each one of these years? And that allows us to draw basically, crudely speaking, a line of the trajectory steepness of rates moving higher as the anticipation is that the economy continues to grow requiring higher rates in future. And then this is what starts to become quite interesting from the discussion I had this morning with Sam, which is this is looking at Goldman Sachs's expectation of what these dots might look like. Now, the actual dots— this is kind of easier to look at because it's all side by side, kind of chronological, left to right. When you look at the Goldman's one, it's the same information, it's just represented a different visual way. So here, where are interest rates going to be? The midpoint of that target range from the Fed? Well, it's going to be unchanged. There's no doubt about that. Are interest rates going to rise in 2022? Remember, you need the majority of these dots to move up to drag the median dot up in order to then have a base case that then that median line has become more steeper. And even if one more person shifts, there's no way that the median is going to move at that point. Then it gets to the end of 2023, and then it gets more interesting, of course, because this is what the actual dot plot looked like for 2023. So you can see there's an uber hawk here who thinks that rates should go up multiple times. You know, you're talking the best part of 3 rate hikes by the end of 2023. This person is looking for slightly less than that, maybe 2, and then 1 here. The idea being, for those aforementioned reasons of how the economy has performed better or is in a better situation now, more optimistic outlook now than where we were back in December when these projections were last due, is how many of these guys down here move up a notch, and does that drag then the consequent kind of pink or red dot up, as Goldman suggests, indicative of one rate hike to be executed before the end of 2023? That obviously would be a difference from currently— interest rates are seen on hold throughout the next 2 years essentially. So that would be hawkish if that median dot moves up. So this will be quite important. And when you go back to that table, the other thing that the market will have to chew over here is for 2021, the, the expectation on a medium basis was the GDP would move up to 4.2 and then subsequently 3.2. So if you look at it, GDP spectacularly returns and then softens. But that makes sense, right? We're coming out of a very low base in a pandemic, and so we're going to be rampant out of the pandemic, and we're going to grow fast in the US over Q2, Q3. And then generally, as the years go on, the economy will keep growing but at a slower pace because you start to remove the accommodative nature of policy, both monetary and fiscal. Unemployment rate— so what we're looking at here, change in GDP, we might see these revised up. For that optimism. Unemployment down and inflation up. To what degree and extremity that though that they see, say, inflation moving, if they're saying, well, we see core PC very high now, well, that's going to constitute more likely than the evidence that there's going to be people who would want rates higher nearer in the, in the future. And so therefore you can make the assumption that dot plots probably being brought forward and therefore would be a hawkish outcome. So all of these numbers are quite important. I think from an actionable point of view, that will make life easier. You're just looking for that singular headline when the Squawk comes on. Where is that median dot plot for 2023? Is it one indicative of one rate hike? If it is, the market might have an initial immediate knee-jerk hawkish reaction. That would be dollar strength, higher yields, T-notes down, equities lower, gold lower. However, how sustainable that is, you'd really want to see the composition of these forecasts to see how aggressive do they see the economy moving and how many of the— what is the actual combination of those dots, these dots here. So I know that's quite a lot to digest, but hopefully that kind of summarizes it. The other things here then, there's a really good, um, crib sheet. Um, he's only just tweeted this, so unfortunately I've not been able to share it, but there's a few other things just to be aware of here. Um, so not expecting any change in rates or QE. The dot plot key, of course, given what we've just discussed. There's a few other things though to, to be on the lookout for. Um, SLR relief, this is basically this kind of supplementary leverage program that they've had where it was adopted in response to the COVID-19 situation to give relief for banks. But there's some expectation that that could be tweaked, or does it get rolled over? As, as he's kind of stated here, there's mixed views on whether that would be extended. There may be a knee-jerk towards higher treasury yields in the event it's not extended. So just think quite simply, SLR relief is something that was put on as a bit of a band-aid during COVID to support companies to have access to credit, and removal of the band-aid might be deemed as hawkish because you're taking off one of the layers of policy tools outside of the traditional ones. You've then got the interest on, on reserves. This is another thing that some people have looked at. It's more of a technical adjustment about how the Fed manage their federal funds rate, and there's basically a reserve rate that sits slightly independent of the federal funds rate that, if moved, can increase or narrow the gap, which basically forces then people at either a higher or lower extremity of the federal funds band of 0 to 0.25%. To be quite honest, I wouldn't get too bogged down in that if you're trading this intraday. It's more of a technical feature than something more meaningful. The SLR one could be a little bit more meat to the, to the move if they, if they do not roll that over. And then I think the main show here is going to be on the, the projections and the median dot plot on rates, with the subsequent kind of optimism or not on that, um, on the other factors like unemployment, PCE, and so on and so forth. Um, the Powell presser then is a separate matter. We'll kind of talk about that closer to the press conference happening. Um, so I'm not going to go into that at the moment other than saying the typical routine here for the Fed is that if there is a hawkish, um, kind of median dot plot, the market might react in that fashion I've described. Powell will be conscious to come out and soothe market concerns about this being overtly the Fed responding to higher yields and inflation, and he'll probably sound quite dovish. To kind of net off, neutralize any initial knee-jerk overinterpretation the market might make. If it's the opposite and the Fed just adopts, which I think more probably likely the matter, they just roll out the same kind of strategy, still very accommodative. They're not looking to hike rates. The median dot plot shifted a little bit, but not enough to move— or the voters have moved a little bit, but not enough to move the actual median dot plot for rates in 2023, the market might see that as a bit of relief. Let's say they roll over the SLR program as well, that's relief. You might get equities bid, yields lower, T-notes take a bit of a pop, dollar weakness, subsequent strength in some of the precious metals like gold and silver, for example. Um, so yeah, a lot, a lot to take in there. Um, my main advice would be with these Federal Reserve events, if you are new to them, you don't have to trade them. Uh, but if you ever are going to trade one of these events, you've got to, you've got to be in it. You've got to either, you know, prepare for it, review it, and go through the whole kind of semantics, and then do it multiple times. But if, you know, if you are gearing up for this and you are going to trade it and you're at that point in your expertise, and just remember the kind of golden rule is you know, you don't have to get stuck in immediately. The opportunities might be in the periods thereafter. And normally you get an initial explosive reaction, you then get the subsequent reactions, which are like 2 to 15 minutes. Then generally that fast money reactionary effect fizzles out as people then wait for the press conference. The more surprising statement, the more interest actually there is in the press conference. In that respect, normally speaking. But I'll leave it at that for me. So if Tim wants to come on and add his take, then yeah, I'll hand it over to you, Tim.

Cheers. Well, very thorough rundown, Ant. Thank you very much, as always. These things are pretty much as clear as mud to most people. So always great to get a sobering chat ahead of these events. Yeah, I mean, I'll share my screen and we'll have a little bounce around the key markets here to look out for on this. Looking at, you know, we got NASDAQ, Russell, S&P. We're actually going clockwise, top left around NASDAQ, Russell, Dixie, T-notes, Dow, and S&P 500. So really, you're looking at weekly bars on most of these markets. Here's the NASDAQ. Um, you know, it's finding it, you know, hard times to get above the 13,125 this week so far. Um, you know, it's— well, we— it's found a bit of support on the 20 EMA and the 10 EMA, which a couple of the guys were trading off of those levels yesterday and today, even shorting it off the top as well overnight. Really nice trades. But, um, you know, I just— look, I can't stand in front of these markets and short them. It's very hard to to see anything but further upside in these markets. I think if we do move to the downside, I think you're going to find some support at 12,459s on the NASDAQ. I'll be zoomed in on 30-minute bar charts for all of them once we get going here. The Russell, yeah, the Russell, very elevated. It's really been outperforming, I suppose, its peers. Since we've seen the June lows here. So if we just kind of quick bounce into this, I mean, you know, talk about being parabolic. I mean, that it looks so parabolic, I think it's about to fall over backwards, um, or, you know, this way. So I mean, I wouldn't, wouldn't be looking to short any of these either, um, you know, with this amount of stimulus. I think, you know, Powell is going to start the speech today by saying, hello, welcome to Groundhog Day. They are going to remain accommodative. I think the Dow has been the real outperformer, though, when it comes to getting on nice longs and just seeing day-on-day compound growth there and big days like yesterday. Fantastic day in the Dow, with the NASDAQ largely underperforming this week, as we've seen. So we're at a huge fib level here for the Dow, 32,704s. This is a Fib extension tool I'm using here. So, you know, it, you know, we— because we come up quite well in the Dow, those blue chip 30 companies, I think it could be time for, you know, a little bit off the top, uh, in the Dow even. And if that's coming down, I don't, I don't see the other markets going anywhere else. T-notes, of course, the question on everyone's lips these past, what, 1, 2, 3, 4— well, 2, 1 and a half months here. Breaching the 1.3125s on the downside, this is being indicative of a, what, 1.67% on the yields. Giving up support here, which was the low of the week of the 16th of March, is pretty significant because if we do run down here to find the support from, what was this, the 3rd of September 2019, well, this is going to be indicative of headed more towards that 2% whole figure on the yield. As always, I just recommend staying pretty fluid and not getting involved in the initial data hit and try and stay out of trouble. That's really all I have. Any questions in? Yeah, Oliver, imagine if you did, you should. For me, I mean, we've been having a lot of fun. Here's the general group of markets that we're looking at each day. Much more busy sort of screen, but oil very supportive down here in the 63.82s. It's going to be largely unfazed by what goes on tonight. But you can see here the NASDAQ, the 10 and the 20 EMAs working off each other. So, um, quite supported here so far in the NASDAQ. But look below here on the S&P. These are all 30-minute charts you're looking at. The S&P, to me, it does have a bit more downside before we could even think about getting back up to what is going to be that 4,000 level up here. Uh, so this is really the shape of the market. And, um, yeah, that's, that's really it from me.

Cool, good stuff.

Thanks, Tim.

So we've got 2 minutes now. Well, what I'll try to do as well, Tim, is, um, I'll, I'll probably keep the recording going to about quarter past, and then we'll restart it when the presser starts. Try and keep the recording as effective as possible as well so people can use it for future reference.

Let me just see if the squawk is gonna work today.

Yeah, the, the, one of the main rules here for, for people, if you are new to these events, is, um, as I've kind of talked through, there's quite a lot of information coming out And so, you know, do be mindful of that, that there is a lot to interpret. And often it is quite convoluted what they're saying. You've got to read between the lines a little bit. I will grab a statement-by-statement comparison and share it with you guys just a minute or two straight after so you can see the type of language change. Yeah, but if it is complicated, if it is multifaceted, just remember it's probably going to be more noisy, and then the opportunities might come in the period thereafter. Give it, you know, a few minutes, but obviously we'll, we'll, we'll shout out, point out anything that sticks out.

Yeah, so just under, uh, 40 seconds now coming up. Squawk is live. Um, yeah, I mean, if we, if we do get a surprise on this, I mean, I'm gonna be hands off, and I'd rather be fading a huge outside move than trying to jump on a freight train. So, you know, and let me switch back here. All right.

10 seconds. Rates unchanged, IOER unchanged as well. Rates unchanged, IOER unchanged. We'll continue asset purchases at the $120 billion pace. Vote unanimous. Repeats guidance on rates. Current federal funds rate will be appropriate until labor market has— so 2023 median dot unchanged. The 2023 median is unchanged. Stance if appropriate, inflation continues to run below 2%. And it looks like the median for 2020, uh, median dot plot, it looks unchanged over here. Yeah, that, that's what's created— we've got initial dollar snap lower. So that was that, what we were looking for was, well, where was that median? It's remained unchanged right now. So dollar weakness, major pairs popping, euro cable highs, gold 1 prior 7c liftoff in 2023. So again, yeah, Tim, just to quiet him down for a minute, this is exactly the scenario we were talking about. Emphasis on the median, it hasn't changed. So some more of them have moved to the idea of lifting, but the median hasn't been enough to move the median. So you're getting an initial dovish reaction here. Dollar down, yields down, equities bid, pairs bid, gold lifting on the back of the dollar weakness. So just going to have a look, see what the other details are here. That IOER was unchanged as well, so that kind of fuels it a little further as well. They haven't kind of tweaked that technical tool. Yeah, the main point though, the Fed median dot shows a hold through 2023, so there's an unwinding of those kind of hawkish bets chiefly led by Goldman's, of course, who are pumping that view. Yeah, euro, euro through now the high that was printed, um, on yesterday late morning in Europe. Just had a bit of a breakthrough there. I know Tim's concentrating now, so I'll share my screen on my charts for a moment just to run through some of them. Um, just, yeah, having gold just coming up to the top end of that rate near-term range, just having a little tussle there, initially running up around the R1. Equities, well, bid the NASDAQ just coming up to an area of, uh, that's quite interesting here. Let me just make this chart bigger. I just got this rectangle from earlier which was that previous high that we had back on the 11th, so what, Thursday last week, and then some support area to the price activity that was seen in the early hours of this morning, the futures. So just finding a bit of resistance there on this push higher. Oil, as, as Tim was kind of alluding to, is a little bit less sensitive, but certainly the dollar movement just seeing a little bit of a push on the upside, but resistance being found at around the 64.60 area, which was the previous high that was seen earlier this afternoon. And a respected area of price over the last 2 days. So one, one of the things I'd say here, Tim, is that this is, as I was saying, this is my view playing out. And so this to me is a function of market mispricing, overestimating a hawkish development. So by saying that, so saying that, that's why you're not getting follow-through That's why the dollar's just not getting steamrolled and euro's just not forever going bid and you're getting a bit of a pullback. This is Powell doing what Tim said, him saying it's Groundhog Day. And this is a function of the market. If you look where market prices are now, we're right back to where we began. Nothing new's happened. All that's happened is you flushed out all these people who are looking for that hawkish side they've got— they've had to get out of that trade, and now the market snapped back, and it's like we move on, um, at this point. So it's a very quick move, doesn't constitute then a kind of real fundamental development. It's more the mechanic of market expectations being misaligned than anything. I think that's what explains the pullback here. But yeah, Tim, I don't know if you want to add anything. I'm going to have a little Yeah, skim through the piece.

Sure.

Yeah. Um, sorry.

Yeah, just— yeah, really, these markets, just explosive move up on NASDAQ, S&P, Dow. And really, it's, it's just a little too far too fast. I mean, gold— yeah, I mean, gold's up to $1,739 as well. It's pretty significant area. But I mean, the buyers are going to have to keep going on that level. for gold to really, you know, put in some decent gains for the next, you know, couple of weeks. Otherwise, we can easily sell off the 1739s and get to go short down to like 1714s, but, you know, the buyers will pick it up from there again. So yeah, you know, the mispricing of the markets— we were talking about this earlier today— and that, um, you know, technicals, fundamentals, we really just as traders try to capitalize on, on markets when they just get temporarily overvalued or undervalued, and then we try and trade them back to normal valuation. And so you're seeing pretty much all of these moves reversed at least 50%. I mean, maybe, yeah, pretty much 50% on all of them right now. Um, so, you know, give it a few more minutes and they're probably going to be back right where they started, which is usually the case. Um, but yeah, you know, uh everyone's piling those stimulus checks into these markets. It's very hard to try and just short, short in front of all that, you know.

Um, I'm just gonna— I've just updated the Discord room with the side-by-side statement if people do want to see just the differences, and I'm going to put the new dots and the table and everything, so it's there if people need it. I'm just going to take a minute or two just to have a look over these.

Sorry, yeah, the NASDAQ printed up into that 13,125s. Quite a key level. Um, you know, if you're sitting, if you're sitting anywhere with limit orders anywhere near market coming into these events, I mean, you're going to get absolutely wiped out. Um, you know, you'll get filled and stopped faster than you can, you can see. Um, you know, you just really want to be trying to get on board and maybe fade a couple of these moves, to be honest. And, you know, 9 times out of 10 you don't get a sustained parabolic move, um, especially, you know, on a, on a, on an FOMC like this where there's, there's, you know, a 90— or there's a 0.02% chance that they're gonna mess with rates at all. So it's kind of a bit of a layup in that sense. Uh, gold holding on the highs. Okay, now they're pushing Pushing up a little bit more on this move. I think the S&P is largely just not— it's not got it in it to get back to that prior all-time high, 3959s. Uh, right now I think yes, for me we're gonna have to print down to 3911s before we print the 4000. NASDAQ actually really nice short there on, uh, 13110s, which we've been looking at, uh, today. We were looking at that in the room. In fact, I think, uh, Charlie Or was it Charlie or Joe? I think she took that trade earlier on, just didn't make it up to the 110s. I think oil here taking a little bit of a bid out of it, but you know, it's just availing of that cheaper dollar.

To be honest.

So, you know, nothing revolutionary happening there. Um, cable finding support as well on the, on the dollar, of course. But I think I do like cable on it. It's pretty much on its lows of day, actually. We were looking at that, those longs in the room. So, uh, you know, healthily onside in that trade right now. And you could be forgiven for actually saying that Cable's forming a lovely bull flag on the 30-minute. So it's about this time that Anthony Cheung sends a quick note to his girlfriend Christine Lagarde and says, what do you reckon, Christine?

This is just central bank, classic central banking, right? Ignore the market, do what you need to do, and the market will react in an initial knee-jerk, but you're just doing what you said you were always going to do. You said what you know. How clear do you need to be? I mean, I saw someone criticizing Powell earlier in an article on Bloomberg, and they were saying Their whole core emphasis was if you're having to repeat yourself a number of times, then what you're saying is wrong. That was just the theory this guy was saying. And I'm saying that's baloney. It's like, oh, ignore the market. Like, you do your thing and the market, you have to fall in line. You actually has to be like the master and the apprentice, or like this, the father and the son relationship. You cannot let the market dictate your actions. Um, so I think Powell's just done— you know, this is what experience tells me and why I have the view going in that he's just gonna— I think it's a little bit much to think that they're going to be talking about hiking rates in, in 2023. Um, just give me one second and I'll bring up some— a visual cue that will help.

I mean, it's kind of surprising that people, that the market is surprised by, as you were saying, him just doing what he said he was going to do. Yeah, it's strange. We saw a little bit of this with the ECB, and actually, what was it, last week with Christine Lagarde, and the market, she controlled that very well. The market stayed, practically didn't move at all over the whole speech. You know, whereas these US markets, it's just too many commentators either side of it. I think, all right, this, this dollar is now dropping off pretty steepish, to be honest. I don't fancy any trades here now, unfortunately.

Yeah, just going to— this is the dot plots. Perhaps it makes it a little easier to see the context. There's what Goldman's were looking for. And that's actually the composition of the dots as they came out. So if you look at it, in order to move the median, Goldman's were looking for 11 people basically to then jump ship and start moving up. Being that their view of the rates have got to go up. And in fact, there's only 7, uh, and so the 7 not enough to pull up the median, obviously. So yeah, maybe there you can see it a bit more clearly. But, um, yeah, I absolutely think it's just a case of, of markets misaligning, not listening to the to the Fed. Kind of like the whole idea about inflation, panic, rotation, sell stocks. And here we are, we're 3 weeks down the line from people thinking this is the beginning of the correction off the all-time highs, and we're at all-time highs. And the Nasdaq, as you said, has outperformed in terms of some of the recent sessions. So Yeah, it'd be an interesting one obviously to discuss with peers on the podcast on Friday, see where we're at at that point.

So the room— the, the move is quite sustained now actually. It's back up on the highs. I think the dollar is in, in rag order here. I think it has a long way to go. I need— I mean, look, Anthony Cheung and I Well, more me having this conversation with myself that if they're printing 24/7 dollar redos, why is the dollar just doing nothing but going up? And I'm quite happy to see this dollar tanking down now, to be honest.

So let's talk about press conference. What does this mean for the press conference? So let's think this through. So the markets have this response. He's done what he said he's going to do. So overall, I don't know. I think he would have had more to justify if there was a hawkish development in those dot plots, and there hasn't been. Because then the market would want some reassurance about how quickly are they going to look to adjust rates in the future and so on. You know, if they're already feeling bullish enough to make that change, then it's like, okay, we need now more details about your thresholds, for example. That hasn't happened. And for me then, I don't know, I mean, look, he comes out, I can't see how he can sound hawkish. I think he's got reason to sound optimistic about the current conditions and so on. But I don't know, perhaps we just, we do just power on here because I don't see much for him to say to talk this move down when he hasn't actually done anything. He's got nothing to talk down that he's done. As I said, it's the markets that have got a little bit apprehensive perhaps on the whole notion about tightening on the back of yields and inflation when, as he said, we're a long way off that even happening. So Yeah, I'm kind of feeling at the moment my bias would be that there could be some legs in this move in the same direction or play that we've had so far.

And inflation, I haven't seen it yet.

So let's have a look at the inflation as much as I want to. Yeah, but let's have a look at the actual change here. So let's— well, we've got time, let's have a quick run through of the actual metrics on that side. So let me share the screen. So core PCE, they've revised up 0.1 2021, 0.1 2022, and it's the same for 2023. So they're not panicking about inflation here. I mean, the revision is absolutely marginal at best. So this is what underpins them, probably accentuates the dovish reaction The unemployment rate, they see it dropping quite aggressively, 4.2% from 5.5%, 4.6%. And then GDP, they bumped up by 0.2% on both '21, '22, and then it fades a little bit in '23. So yeah, probably the interesting one is that there's fairly benign change in inflation. They've only marginally lifted it. But again, in June, I think in the June projections, which is the next one, that core PCE is going to go pop, like it's it's going to jump aggressively. We're just not at that point yet, I don't think, to really see those kind of more meaningful revisions to these forecasts yet.

I can't wait.

Yeah, the inflation is coming. It just hasn't arrived yet in the extreme extremity that I think the market was just a bit early in some of those initial moves a few weeks ago. Yeah. And then when we get to June, as I was talking about briefing this morning, June gets interesting because at that point, when are we going to start tapering? When are we going to start just easing off the gas of the pandemic response now that the economy is firing on all cylinders? And that then brings an interesting juncture for the market and the Fed, which is how do they tiptoe around easing off stimulus?

Wait, let's see, he's waiting for, uh, above 3% inflation, right?

That's—

yeah, they're not on the record.

Yeah, they're not going to panic until it's in excess of that. Um, so you've got a long way to run until we get to that point, hence the reason why I think right now it's holding pattern.

So Technically there was just another sort of impulse there onto new highs, or trying to attempt again on the new highs, uh, on the move, uh, and it's just sort of fading back a wee bit here now. I like the shorts, 35, 3959 on the S&P here, uh, prior all-time high.

We'll leave the recording running. I mean, we've already got 10 until the, um until the presser begins. But if anyone's got any questions while we're on the call, just fire away. You got the chat and the Q&A. Yeah, Pawit's saying the dot plots look like an old arcade game. The dot plots get criticized a lot. And actually, you should ask Piers Curran about what he thinks about the dot plots. He absolutely hates them. And the reason for that is they're almost always wrong. I mean, trying to say where interest rates will be 3 years' time, I mean, guess what? There was a pandemic that happened. Imagine what the Fed dot plots looked like in December 2019. Did they foresee a pandemic happening? Of course they didn't. So the dot plots are just trying to pin down a rate specifically to the T. And then try to adjust that over a median, I think is questionable. Um, you know, Piers is of the view that it's basically not worth the paper it's written on. But for a trader, that doesn't matter. That's your view on the policy tool itself. As a trader, this is what traders look at, and as we've just seen, this is what they base— this is what the market reacts on and what traders will base their decisions on to trade. So it is important. In that extent. Um, but this is why the Bank of England, the Bank of Japan, the RBA, the ECB— none of them have dot plots. This is a Fed thing, and it has come up for potential review on a few occasions where people have tried to force a review of whether it is a viable tool to maintain, but it is for the moment.

I remember trading in one firm where we did before every FOMC to be like 10 traders in a room. We'd have like a pre-game meeting and it was like the most senior trader in the room would be like, get out the dot plot chart. And they'd just be like, I would just glaze over because I just thought, you know, really a lot of things are going to move here. And yeah, you know, there is a lot of focus on the dot plot, but I just, I never kind of synced in with it, to be honest. I mean, I like the forward guidance I like to have that situational awareness of what other people are looking at. But untradeable thing.

Here's a kind of reference of what it looks like when you're seeing the news come out. So this is what I was kind of saying, is that the main thing— see, so when you look at Bloomberg's news scroll, these are all the headlines. They all drop out. But the red ones are the asterisks that are highlighted, what we call stickies. And so when all the headlines drop down, they drop down in a chronological order, but the stickies stick at the top of the screen so you can clearly see them. And as I was kind of suggesting in the preview, the market is just looking for this statement here: Fed rates— Fed keeps rates near zero. Median dot plot shows on hold through 2023. That's the initiation of the move we saw. At the turn of 6 o'clock. There was that one singular headline there. So as Tim was saying, I think the dot plots and the complexity of monetary policy can be, uh, inappropriately talked about by analysts to overcomplicate. My job is to say to you guys before, look out for that comment. If it says 'through,' it's dovish. If it says 'in,' it's hawkish. Through means this, in means that. And that's a game plan then. And then it's like, okay, what constitutes then an extension of the knee-jerk? That's then conversation 2. And, and that's what you're trying to aim for, I think, when you're, when you're trading. I mean, don't get me wrong, I mean, I know I'm head of market analysis, but I'm, I'm more, I'm more basically someone who understands what these analysts are saying And I break it down into trader talk because economists and analysts don't talk in trader terms. And then my job has always been as like the middleman to just take the in-depth research and break it down into a definable point. And that's the kind of lesson that I'd want any new trader to take away is to do a similar thing.

A couple of questions in here. What's the bottom for Eurobond? Euro bond, uh, the bonds. Yeah, okay, the bottom line for the bond, yeah, I was actually looking at— I was buying this twice today. Um, uh, let me see what I can see here. Um, I, I think we've seen the low for the day on the bond, to be honest. I think, uh, I'd be a buyer on 170 spot 84s if we were to get down there, even 170s, uh, spot 80s. I think, you know, there's really nice buying down there on the bonds for sure, um, but we're not going to get there today, no way. Um, uh, yeah, I think that's it on the bonds. I wouldn't be trading this on the— or the trading the bond over this, to be honest. Um, that's a bit too indirect a market. I mean, I totally have all the respect in the world for taking the indirect trade over an event such as this. But I think the Bund is a little too indirect here. It drives its own car. You have a divergence, a clear divergence between the risk story in Europe versus the risk story in the US now. It literally couldn't be any more divergent than it is. Given that we're going into further lockdowns again now, wave 3, serious wave 3 now in Europe. Well, it's spring break in Cabo San Lucas in the US. And yeah, so I think while both of these bonds are dropping and the yields are rising, I think the better question would be, where is the lower bound for T-notes? But the yields are going to just continue to rise over the next—

Right. So that is a really important point, that last one, which is just to make it crystal. T-notes have popped up here, but T-notes are going to move down beyond today. And the reason for that is yields are going to move higher from where they are today in the future. The function of this spike is that of the market's mis-expectation pricing positioning of looking for something a little bit more hawkish than what we've just seen materialize. And so the trade is— I mean, for someone like Tim, I'm sure if you were looking at T-notes— I know Will favors T-notes sometimes because it's like a slightly— can be slightly slower out the gate, just given its sensitivity to, say, more volatile products. You're out at pivot or on the push technically, but tracking the momentum on the ladder and the, the order flow. But then you're probably out at that high anyway because it's a short-term missed-priced trade that you're in. You know, it's a fast money move, you're out. And at the end of the day, as Tim was saying, yields are going to move higher, inflation is going to go up, and rates are going to go up, so T-notes are going to go down. In terms of a medium long-term trend here.

Yeah, so I, I always get a sense that people are like trying to get into these trades that they think they can hold for, for weeks or, or days. And it depends on your risk profile, but they're not like, you know, getting on a long on the data here, bar like gold, uh, for example. The S&P and the Dow are going to wipe, wipe out your, you know, 20, 30, 40 50, 100-tick stop by the close of business on Friday, maybe by the close of business today. Um, so, you know, you gotta, you gotta be aware that you get this initial volatility of repricing of the markets, but then generally when it comes into the speech, it's kind of come back to where it is. And you see this like especially with ECB speeches you know, or something like DOE, for example, is an absolute classic for this. You know, within 15 minutes, 70% of the time we're back where we started. Maybe not 70, but something closer to that. But, uh, so yeah, for like Will or myself, we're like, you know, and we had a good session of me doing this today. I was, I was calling some trades I was in, and then I was like narrating. I was like, okay, I'm out of that now, or I've scaled out here, or I'm flat, and now I'm back in. And like, I was in gold or oil 3 times but I'm managing it very quickly. I'm not kind of going off, having a snack, coming back, checking on the position. And those type of trades, I'd say, constitute about 20% of the trades I do. 80% of the trades I do, I'm in, I'm out, I'm in, I'm out, and then I'm done. Yeah, it could all happen within like 15 seconds.

Yeah, 2 minutes. So an important point to make there, just before we go into the press conference, uh, if Tim, if you want to find the link and have that audio playing. But the, the point I'd want to make there is that there's someone who's missing in action tonight, and that is Sam North, because this type of event-driven volatility is not conducive of his trading style. I think a really important point to make there is that these kind of macro headline news-driven fixed events. These are almost like optimal for someone like Will or Tim, but for someone like Sam, it's almost worth avoiding actually, and then just coming in the next day seeing how the land lies and then taking action accordingly over one of those more kind of long play structured trades technically and slow burner. The point being there is, is not, you know, I guess, exploit your— and leverage your strengths and know your, your, your style and be true to that. And, you know, equally so for Tim here, and equally so for the fact that Sam is missing in action says it all really for the type of trader that he is and, and him being disciplined to that, um, in that extent. But I'll put my charts back up. The press conference just about to start.

Here he is, he's just come out now. Feed should be on.

Shores. Looking back, it was clear that addressing a fast-moving global pandemic would be plainly and primarily the realm of healthcare providers and experts, and we are grateful to them and to all the essential workers for their service and sacrifice. The danger to the U.S. economy was also clear. Congress provided by far the fastest and largest response to any post-war economic downturn. Offering fiscal support for households, businesses, healthcare providers, and state and local governments. Here at the Federal Reserve, we rapidly deployed our full range of tools to provide relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy. We are strongly committed to achieving the monetary policy goals that Congress has given us. Maximum employment, and price stability. Economic fallout has been real and widespread. But with the benefit of perspective, we can say that some of the very worst economic outcomes have been avoided by swift and forceful action from Congress, from across government, and in cities and towns across the country. More people held on to their jobs, more businesses kept their doors open, and more incomes were saved. As a result of these swift and forceful policy actions. And while we welcome these positive developments, no one should be complacent. At the Fed, we will continue to provide the economy the support that it needs for as long as it takes. Today, the FOMC kept interest rates near zero and maintained our sizable asset purchases. These measures, along with our strong guidance on interest rates, and on our balance sheet will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete. The path of the economy continues to depend significantly on the course of the virus and the measures undertaken to control its spread. Since January, the number of new cases, hospitalizations, and deaths has fallen, and ongoing vaccinations offer hope for a return to more normal conditions later this year. In the meantime, continued observance of social distancing measures and wearing masks will help us reach that goal as soon as possible. The economic recovery remains uneven and far from complete, and the path ahead remains uncertain. Following the moderation in the pace of the recovery that began toward the end of last year, indicators of economic activity and employment have turned up recently, although the sectors of the economy most adversely affected by the resurgence of the virus and by greater social distancing remain weak. Household spending on goods has risen notably so far this year. In contrast, household spending on services remains low, especially in services that typically require people to gather closely, including travel and hospitality. The housing sector has more than fully recovered from the downturn, while business investment and manufacturing production have also picked up. The overall recovery in economic activity since last spring is due importantly to unprecedented fiscal and monetary policy actions which have provided essential support to households, businesses, and communities. The recovery has progressed more quickly than generally expected, and forecasts from FOMC participants for economic growth this year have been revised up notably since our December Summary of Economic Projections. In commenting on the stronger outlook, participants noted progress on vaccinations as well as recent fiscal policy. As with overall economic activity, conditions in the labor market have turned up recently. Employment rose by 379,000 in February as the leisure and hospitality sector recouped about two-thirds of the jobs that were lost in December and January. Nonetheless, employment in this sector is more than 3 million below its level at the onset of the pandemic. For the economy as a whole, employment is 9.5 million below its pre-pandemic level. The unemployment rate remains elevated at 6.2% in February. This figure understates the shortfall in employment, particularly as participation in the labor market remains notably below pre-pandemic levels. Looking ahead, FOMC participants project the unemployment rate to continue to decline. The median projection is 4.5% at the end of this year and moves down to 3.5% by the end of 2023. The economic downturn has not fallen equally on all Americans, and those least able to shoulder the burden have been the hardest hit. In particular, the high level of joblessness has been especially severe for lower-wage workers in the service sector and for African Americans and Hispanics. The economic dislocation has upended many lives and created great uncertainty about the future. Overall inflation remains below our 2% longer-run objective. Over the next few months, 12-month measures of inflation will move up as the very low readings from March and April of last year fall out of the calculation. Beyond these base effects, we could also see upward pressure on prices if spending rebounds quickly as the economy continues to reopen, particularly if supply bottlenecks limit how quickly production can respond in the near term. However, these one-time increases in prices are likely to have only transient effects on inflation. The median inflation projection of FOMC participants is 2.4% this year. And declines to 2% next year before moving back up by the end of 2023. The Fed's response to this crisis has been guided by our mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote the financial— the stability of the financial system. As we say in our Statement on Longer-Run Goals and Monetary Policy Strategy, we view maximum employment as a broad-based and inclusive goal. Our ability to achieve maximum employment in the years ahead depends importantly on having longer-term inflation expectations well anchored at 2%. Just seeing the euro breaking above that level, the committee reiterated in today's policy statement, with inflation running persistently below 2%, we will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations squeeze in as many mentions of inflation as we can here. until these employment and inflation outcomes are achieved.

I think gold's got a bit of room.

We continue to expect it will be appropriate to maintain— next level here, I'm looking at 0 to 0.25%— we get up to around 45.5% until labor market conditions have reached levels consistent with the committee's assessment of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time. I would note that a transitory rise in inflation above 2%, as seems likely to occur this year, would not meet this standard. In addition, we will continue to increase our holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward our maximum employment and price stability goals. The increase in our balance sheet since last March has materially eased financial conditions and is providing substantial support to the economy. The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved. Our forward guidance for the federal funds rate, along with our balance sheet guidance, will ensure that the stance of monetary policy remains highly accommodative as the recovery progresses. Our guidance is outcome-based and ties the path of the federal funds rate and the balance sheet to progress toward reaching our employment and inflation goals. Overall, our interest rate and balance sheet tools are providing powerful support to the economy and will continue to do so. To conclude, we understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We are committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible. Thank you.

I look forward to the opening statement.

Done.

Q&A kicking off. But so far, he's not really said anything that would deviate from him just kind of repeating what he said before. So the market just continuing with the initial trends, yields lower. Gold up, stocks up, dollar weakness.

Would you talk us through how the, um, the forecast for 2021 map into the substantial further progress definition? Uh, you know, 2.4% inflation, I understand that's considered transitory. That still seems like some progress there. 4.5% unemployment. Uh, is it time to start talking about, talking about, uh, tapering yet? Not yet. So as you pointed out, we've said that we would continue asset purchases at this pace until we see substantial further progress. And that's actual progress, not forecast progress. So— and that's a difference from, from our past approach. So— and what we mean by that is, is pretty straightforward. It is we'll want to see that, that the labor markets have moved, labor market conditions have moved jobs, you know, have made substantial progress toward maximum employment, and inflation has made substantial progress toward the 2% goal. That's what we're going to want to see. Now, that obviously includes an element of judgment. And when we see— we'll be carefully looking ahead. We also understand that we will want to provide as much advance notice of any potential taper as possible. So when we see that we're on track, When we see actual data coming in that suggests that we're on track to perhaps achieve substantial further progress, then we'll say so. And we'll say so well in advance of any decision to actually taper. If I could follow up on that, this shift in the dots, why wouldn't that suggest a weakening of the commitment here? An awful lot of people shifted into 2022, it seems. I don't see that at all. You know, we have a range of perspectives. On the committee. I welcome that. And, you know, we debate things, we discuss things, and we always—

Who's this guy? Get this guy off the press conference. He's getting confused between 2023 and 2022. The guy asking the question is not showing a rate increase. A waste of time.

During this forecast period. And, you know, as data improves—

Right. Keep an eye on equities now. The NASDAQ's just testing on its pivot.

You would expect—

so, so far, I mean, that comment, he said it's now is not the time to start talking tapering. He's kind of pushing back against the idea that the Fed needs to act about this rising inflation expectations and so on. So at the moment, this is kind of what we were looking for, a continuation here, because he's, he's not—

actual data—

not doing what markets want, just a forecast at this point, which is to comment on more of the, the risks to the accommodation that they're providing. He's saying we're going to continue doing this. We're not at that point yet. So equities now, the S&P is just back above that initial support blip high that we had to happen, but— and the NASDAQ's through pivot now. Keep an eye on gold, that's its next point of technical resistance as well. And the euro's at the 120 in the futures.

Yeah, gold has 1758 in the sights here.

I know it's a big way up, but about what you all are going to do this month, which I'm happy to hear an update if you have one. But just sort of more broadly, do you think long term that the leverage ratio poses problems for implementing monetary policy at a time when the reserve supply is going to remain large? And if so, do you think the changes to the leverage ratio, including the SLR, are the way to deal with that problem? Victoria, We'll have something to announce on that in coming days. And I'm not going to expound upon your question. So why don't you— why don't you ask another question if you'd like to? Because— because that one, I'm just going to say that we're— something in coming days. Sure. Okay. Well, then I'll ask about unemployment. You know, there's the unemployment rate is— you all have projections for the U6 rate, but you've also been, you know, really emphasizing the fact that that's not the only thing that you all are looking at. You're also looking at labor force participation and things like that. So are you all looking at ways of maybe adding to how you're projecting the unemployment rate to the Summary of Economic Projections? Well, let me say, as we say—

His daughter is getting smoked here.

—policy strategy, we look to a range of indicators on labor market. We never only looked at the unemployment rate, which is the only indicator of labor market outcomes that's in the SEP. We look at a very broad range. You hear us talk all the time about participation, about employment to population, which is the combination of the two, about different measures of, of unemployment. So it's wages, it's, it's the job flows. It's, you know, all of those things are— they go into an assessment, disparities of various groups. All that goes into an assessment of maximum employment. The trying to incorporate all of that into the Summary of Economic Projections would not be practical. You know, obviously the thing that we do include is just the unemployment rate, and that's a very insufficient statistic. So it doesn't include a lot of other things that we, that we do look at. And I wouldn't want to say that we're looking to include the other dozen things that we look at into the SEP, but at times, from time to time, we do look at adding different things. But I would just say the SEP is a, it's a summary. It's one device. It's not going to include all of the things that we look at. I think you know the things that we look at.

Sorry, Tim, I was just off the desk then.

But yeah, S&P. So we're not actually looking actively at—

retesting close to the highs now from yesterday and the R1.

Thank you. Chris Rugaber, Associated Press. Thank you.

The 10-year is on that range high as well at the minute.

The forecast overall, you're forecasting a very low unemployment rate next year and in 2023. You have inflation, or the Fed overall is, and the SEP, forecasting inflation at or above 2% by 2023, yet no rate hike in any of this, in any of this forecast horizon. So is this telling us that you see a higher inflation rate than what's projected, or do you not?

As you've been talking about, is the unemployment rate insufficient, or what is this telling us about the Fed's reaction function, that it seems you're meeting the Fed's dual mandate by 2023, yet again, no rate hike expected?

CHAIR POWELL. So I guess the first thing to say is that the SEP is not a Committee forecast. It's not something we sit around and debate and discuss and approve. And say this represents our—

Gold is going to get crazy here in a bit. Just stepping into R2.

Cable loving it.

Since we don't debate it or discuss it, it would be hard for me to say why exactly, why each participant did what they were going to do.

So it'd be worth a nice short here on the T-notes.

All I will say about this is that we've laid out what I think is very clear guidance on liftoff. And it's really 3 things: labor market conditions that are consistent with our estimates of maximum employment—and, as I mentioned, we consider a wide range of indicators in assessing labor market conditions, not just the unemployment rate—inflation that has reached 2% and not just on a transitory basis, and inflation that's on track to run moderately above 2% for some time. The first 2 of those 3 are very much data-based. The third does have a little bit of an element of, uh, expectations in it. So we are very much determined to implement this guidance in a robust way. It is the guidance that we chose carefully to implement our new framework. And to meet these standards, we'll need to see data, as I mentioned. So what this— what does this, this SEP really say? It says that we're committed to our framework and to the guidance we've provided to implement that framework. We will wait until the requirements set forth in that guidance are clearly met before considering a change in our policy rate. And the last thing I'll say is this: the state of the economy in 2 or 3 years is highly uncertain, and I wouldn't want to focus too much on the exact timing of a potential rate increase that far into the future. So that's how I would think about the SEP. Thank you. Paul Kiernan.

Thank you, Chairman Powell.

My question is twofold. One, how high are you comfortable letting inflation rise? There, there is some ambiguity in, in your new target, as you mentioned, expectations-driven. And do you think that that ambiguity might cause markets to price in a lower tolerance for inflation than the Fed actually has, thereby causing financial conditions to tighten prematurely. Is that a concern? Thanks. So we've said we'd like to see inflation run moderately above 2% for some time. And we've resisted basically, generally, the temptation to try to quantify that. Part of that just is talking about inflation is one thing. Actually having inflation run above 2% is the real thing. So I, you know, over the years we've, we've talked about 2% inflation as a goal, but we haven't achieved it. So I would say we'd like to, you know, perform. That's what we'd really like to do is to get inflation moderately above 2%. I don't want to be too specific about what that means because I think it's hard to do that.

And we haven't done it yet.

You know, when we're actually above 2%, we can do that. I am— look, I would say this. We are— the fundamental change in our framework is—

I must have heard him say that like 5 times.

We're not going to preemptively make forecasts for the most part. And we're going to wait to see actual data. And I think it will take people time to, to adjust to that. And to adjust to that new practice. And the only way we can really build the credibility of that is by doing it. So that's how I would think about that.

It's an interesting point, you know, the Fed have always been under their inflation target and they want to see it before they really start to comment on it. At this point, that's kind of what we were saying earlier. We're just a bit early in the road yet for them to really— of the economy, pay more detailed information about explicit nature of inflation thresholds because they've never actually been in an environment where that's been consistently hit for a long time. The questions now, as a reference point, do tend to get diluted a little bit in terms of quality. And he's kind of said majority of what he needs to say now. uh, with a lot of the responses. So, um, after that little push-up we had in prices, we're just seeing that fade a little bit here across assets and at strategically technical levels. So Tim was, was bang on with the call on the 10-year. You've seen a bit of reverse course, 7 ticks off that initial high now from that range that we'd be looking at in the 10-year, bottom right. Um, gold's still probably the more bullish setup of all of them in terms of it's still sat there knocking on the highs.

Let's go, just getting started here.

Yeah, the currency pairs though, cable, you know, I've got that rectangle marked up, just finding some resistance around that double top from the price that we had from Tuesday's session, and that coinciding with the pull-off of the 120 psychological and R2 in the euro future, as you can see here.