LIVE Bank of England - 30th January 2020

Testing out the mic, just doing a mic check before I get cracking. Uh, usual routine for these live events, I'll do a preview first. What are we expecting for the upcoming Bank of England rate decision? The plan is going to be I'll do a preview, we're going to listen to the first part of the announcement live, obviously at midday, 30 minutes time. We'll then do the press conference at half past. Press conference normally lasts about 45 minutes, and then we've got US GDP coming out. So our intention is we'll probably remain live on here for the next 2 hours. So buckle in, get your water, it's down to business for the next 2 hours. But yeah, Everyone can hear okay, see everything okay? Michael, the rest, thank you.

Cool.

Well, let's, um, let's have a quick just, uh, a look at the charts at the moment, what's been going on so far. And, uh, and obviously a bit of movement overnight in the Asia-Pacific region. I don't want to add really too much to what I discussed in the, in the briefing. It wasn't as if Jerome Powell said something sensational and that led to an equity sell-off. Overnight. I think that was largely inspired by just a move in sympathy with the general deterioration more locally in the Asia-Pacific region where equity markets have been under pressure. And technically speaking, we broke through a couple of quite clear areas of technical relevance and we just remained heavy generally, more broader, until Europe really came in this morning and things have somewhat stabilized. But Attention now firmly to the Bank of England and a lot of talk about this meeting because of the nature of it being Mark Carney's last one as Bank of England governor, but more so because of the, the split of opinion and that very much reflected in markets' prices of what we think the overall outcome might be from the Bank of England in the next half an hour. And that being either from a very top level, as we'll get into the details shortly, but whether or not they hold or they cut interest rates by 25 basis points. Now, just having a look at cable this morning, we're actually just coming above the top end of the general range that we've been in, uh, for the best part of the overnight session and thus far today. We were initially dipping and we got down almost to the tick, a retest to the, the low that we've seen 2 days ago before we've seen a pretty decent bounce since that point in time. But I wouldn't really over-interpret too much this kind of pre-release movement, in all honesty, um, for sure. But I'm gonna leave Sam to do this. I would be marking up some quite outlying levels both on the up and the downside, because in this type of situation, rather than try to, to second-guess it and try to force your view. I think you've got to prepare for, for both real scenarios in that case. And, you know, I'm sure Sam will start, you know, looking at these charts from a higher time frame. But you can just see where we are at the moment in this period of consolidation, really, from just sub-130 up to 130.5 area. And then there's kind of a band of, of interesting technical points either side of that Uh, but then as you can see from the up and downside, there are some other levels then as we start to, to push should the— we get a hawkish outlying or dovish outlying situation. So a couple of points then to cover here about, you know, I'm mindful of not everyone has looked at these types of events before, so I want to be as clear as I can. So what I'm going to do is like something slightly different and hopefully this will, this will work. So just bear with me for one second, transition my screen. So there's a couple of different things that are going on here, um, hopefully that's coming out and you're able to see it. So you've kind of got part 1, that's going to be the top of the hour, and we're going to get a lot of activity and market prices Why is that? Well, this is the, the main thing that people are looking at, which is the, the interest rate decision. And rates currently reside at 0.5%, and it's pretty much 50/50 on whether or not that gets cut by 0.25 basis points, essentially. If I just move that slightly over so you can see it, so that initial part one, if you like, is going to be incredibly a volatile situation, and that's going to create the initial knee-jerk reaction. Now, at the same time, with these numbers, you get a few other things. You're going to get a statement, so pretty similar to the type of statement that we saw from the FOMC yesterday. The, the description in shorthand, usually, uh, 500 words of why have they taken a decision that they've taken. Now, the other thing that you get that's quite unique for the Bank of England, of course, is you get something called the minutes. And very different from the ECB and the Federal Reserve, because the Bank of England released this at the very same time as they released the interest rate announcement. Their overall ambition here is to try to be as transparent as possible in order that all market participants have full clarity as the decisions and discussions that underlines their decision-making for this particular meeting. Now, the other thing that's very important for, for, for part 1, which is the 12 o'clock release, is then the vote split. Now, here of course, uh, there are a total of 9 monetary policy members, and if anything, then what is going to be probably the most impactful in this initial knee-jerk reaction undoubtedly is going to be the composition of this split. So having a look at this, the split can come in various different ways. There's different compositions of the split. Now here you've got 9-0, you've got 8-1, you've got 7-2, you've got 6-3, you've got 5-4. Now if I just draw a red line there All of these in this situation, let's say, is for interest rates to remain at 0.75%, which is where they are right now as of today. Now, what I always try to say, and as we've just discussed, we haven't even got to the press conference yet, but trading these types of events is that there's multiple things that you've got to be aware of. As we just said, there's the vote split, but there's the minutes and there's the statement. There's a lot of things going on. When it comes to things like the vote split, and just generally, you want to try to eliminate any unnecessary information to make it as straightforward from a trader's perspective to digest and then potentially react to things as quickly and as efficiently as possible. So here, what is the likelihood then that the Bank of England, uh, hold interest rates with a 9-nil vote? I mean, ask yourself that question. What is, as a vote split, the likelihood of unanimous to hold? I would say the chance of that is pretty much zero. So you know what, get rid of your 9-nil. Now, if you remember what the composition looks like of the MPC— so let me quickly remind you of this with a graphic I'm going to bring up now if I transition my screen. So this is the MPC. So these are the 9 people that we're talking about. And remember these 2 chaps down on the far left, the most dovish, Michael Saunders and Jonathan Haskel, the 2 here, they have consistently as a pattern. Well, let me see if it's got it on the Bloomberg one here. You can see here for the last 3 meetings, those 2 individuals have been saying we've got to cut rates, we've got to cut rates, we've got to cut rates. So they've been dissenters. For a while. Now here then, I would say 8-1 is not gonna happen because what generally happens is these two in particular have always been going against the group, against the grain. And so, is 7-2 gonna happen? Well, 7-2 could happen, but I would say the probability of that is relatively low.

Why?

Well, again, let's jump back to what these monetary policy committee members have been saying. And Gertan Flieger has turned incredibly dovish. He had kind of a headline weekend exclusive with the FT about 3 weeks ago, and that created this move. So GDP came out weak, then that was the weekend that he dropped that FT exclusive. And you can see here, this black line is the priced-in probability of the Bank of England cutting interest rates as defined then by the fixed income markets in the UK. So you would think then that Flager here— and I'm just jumping back, got a lot of tabs open— uh, this chap is going to join those three. So I would say then, go back to your vote split. 7-2 is out the question. So now this is what I mean by elimination of unnecessary information. You want to try and make it as binary as possible. It's the easiest way to prepare to be able to action over these types of situations. Now, the toss-up that the market is trying to weigh up, I would say, is from a base case point of view, is really, are we going to get 6-3 or 5-4? Now, the market is slightly biased. It's not quite 50-50, it's a 55 45 split as per market pricing that we hold. So just slightly for hold. Now here then, the composition will be quite key. Is it 6-3 or 5-4? If you were to be absolutely, again, binary about this, 6-3 would be slightly more hawkish, 5-4 would be slightly more dovish in terms of interpretation. It meaning that the bottom one, 5-4, we're only one vote away of switching. We would have taken action to cut interest rates at this meeting. Now don't get me wrong, there is this situation. What if we get this situation down here? And this is they cut 25 basis points. And if this was to happen, this would be the most dovish, so very dovish reaction here. So this is where this, this composition of the vote split is particularly key as to trying to fathom how and how aggressive that initial pop is going to be. One thing I want to show you though is— and then I'll kind of hand you over to Sam— is that when this initial release comes out, then this part one collection of information, what you're going to see in the pound is, you know, if I was to draw this out and we were talking about seconds of price activity in cable, it's going to get very quiet. Then you're going to see this kind of whippy price action just before we go into the data. And then depending on what they say, you know, if we did get a 7-2, if we had a 7-2, this is what the pound would look like in the immediate fashion. It would just explode this way. If we get a 5-4, this is where it gets a bit tricky because don't forget the market is priced pretty much on the fence here. And if they go 5-4, they haven't actually cut, don't forget. So I think actually if you get a 5-4, it's a little bit tricky because you are disappointing those that were looking for a cut. So with a 5-4, you might get this type of movement followed by this type of movement. Now it's— this looks quite okay, I get that. I can see a movement that goes higher and lower, but in real time This will literally happen in a split second, which means then if you remove yourself out of this kind of microscopic view for a second, what does this actually look like when you're trading? Well, it kind of looks a little bit like this, and this is when I guess novice traders, they see this first— if I use a different pen— they see this first initial movement here and they try and hit market. They see a move higher, they hear the audio squawk, they see a headline, they look then for confirmation and they, they go long. But by the time they get filled in a high volatility market, they've just got filled right at the worst possible point. And then, as we said, the overall prevailing move is a lower one. They've basically not digested and made a conscious, rational assumption or decision about what it is they've heard. They've just literally let the price movement run away with their head, and they've taken inappropriate, um, untimed kind of decisions, which take on a large amount of risk when you're trading in the short term. Now, the other thing here is, don't forget that after 12 o'clock, we're going to have to wait till 12:30, and this effectively is part 2 of the release. Now, what does Part 2 involve? Well, Part 2 is the press conference. And what does the press conference include for the Bank of England? Well, just to be clear, there's no dot plots here. The, the BoE don't do that. What the BoE do is two real main definable metrics: inflation and GDP, if you're going to call that 1 and 2. Now, from here, what we're looking at is, well, what is over the next 2 years their future outlook for inflation. Where is it heading? Is it heading up? Is it heading down? And what is the trajectory of these forecasts over now to the next 2 years? By knowing that, for someone who's more informed about these things, it gives us an idea of where future interest rates might be. And now the other thing here then that we need to look at is the actual press conference in terms of what does he then say, third point, in the Q&A. Now, what's he going to be asked? What do you think Carney's going to be asked in the Q&A? Now, is he going to be asked about coronavirus? It will probably come up, but just remember what Jerome Powell said yesterday about the coronavirus. Really, it's a, it's a not a consideration as yet because he can't really connect the overall impact that it's going to have on the global economy yet because it's too early in its infancy to make that judgment call. So like with Powell, he could say there's probably likely to be some degree of economic fallout, but we'll continue to monitor the situation. The bigger thing here is more about what do they talk about with Brexit, and it's— and what is their feelings now about the fact that we've got a majority government under Boris Johnson and going forward, what does this mean? So remember then, when we're trading the Bank of England, there's two parts. And if you just, you know, rationalize what I've just been talking about here, part one is incredibly volatile. You know, the vote split in my mind is really— unless it's 7-2 or something completely unexpected like that, or it's a cut, but a cut by a large margin, which would be very dovish, then don't forget you might get a, you know, a very difficult part 1, perhaps a more tradable part 2. And this is the way you've got to weigh up the risks of the execution and the management of these trades. You know, although what you're about to see is when it's— something's priced 50/50, what does that mean? It means the market is going to explode one way or the other. Now you've just got to maintain composure in this situation. Remember, there's going to be minutes supplementary commentary that's coming out. What are they saying? Remember, if they cut, they will not want to give a signal to the market that they're going to continue cutting and cutting and cutting. Remember, if they do cut, rates in the UK would be at 0.5%. There's not a lot of wiggle room left, particularly if we did have a disorderly Brexit and, and no deal by the end of the transition in 2020. So definitely what they would not want to do is cut and sound dovish. If they cut there's probably likelihood that they're going to want to alleviate any concerns about that means the beginning of multiple cuts to come in future. And it might sound a little bit actually hawkish. So a hawkish cut would be the definition. Now, the opposite of this then would be, well, what if they were to do a hold? Now, if they hold, again, the composition vote is really key. But then if they hold, it's then about what is the language, the forward guidance about what would it take for for them to make a judgment call then to lean towards cutting. Obviously interesting with the vote split is going to be, well, if let's say on this graphic Tenreyro and Flager have joined Saunders and Haskell, well then we know right on the fence then is probably John Cunliffe. Carney's gone after this meeting, uh, and then Andrew Bailey steps in and, and that's a bit like a degree of uncertainty, but I would say it's pretty much policy view like-for-like replacement. And then the pressure comes then on what future communication comes out the Bank of England. So that's pretty much it from me. I'm going to get Sam on. He can look at the charts now from a bit more of a trade setup point of view. But hopefully the— hopefully you can make sense of my scribbles. I know, I know I write like a child, but obviously given my job, it's not very often I actually have to write things down. These days. But yeah, hopefully that was useful. Let me hand you over to Sam and then he can look over the charts as well for a more practical, I guess, implementation point of view. Thanks, guys.

Hi guys, 12 minutes or 11 minutes now until the moment we're all waiting for. Good to see some familiar names. In the chat. Fez, hope you're, you're doing well. Let's have a quick look over the pound, how we're trading. Just, uh, over the last 15 minutes or so, we have just seen, uh, the new high of the day in the pound. Um, I'm just going to bring the daily chart on, as if anyone's watched the briefing recently, you'll know you're probably sick to death of me talking about this trend line and area in general for the for the pound. And we actually yesterday almost made a new one, and you can see respected these bottoms before. It had just been based on there failing to close each time. The 130 in the mix there as well. So I'll be keeping a watch on what happens around here, especially where we close the day. A lot of resistance, uh, previously before breaking through in December. We then have found support around that point. Also the round number as well. A break of that trend, uh, some of the levels I'll be keeping an eye on, certainly, certainly that low 23rd of December, end of November, and then maybe even a longer term target down to that point on the 8th of November there as well. So those would be to the downside key levels I'll be focusing on. Of course, that would, uh, be more of a, uh, dovish reaction. To the upside, we can see we're getting squeezed in, uh, as well from that top. 60 minutes, you can see the top of this range as well. So just keeping a, an eye on that, uh, certainly clear top to that 1.3043. Just gonna put on the pivot points as well. Previous lows, gonna mark those up. Other resistance around 131.22. And I'm pretty much now set how I would want to be ahead of this release. I've got the key levels marked up below, so you can see if the trend line was to break those lows around to 129.50, the uh, and 37. That would be my main first target. Below there, the ground could open up and we get 128.34 because I know that's the level from last year. Above the, uh, the highs that we have, this range, 136.59, I would want to break 130.85, a level where we could find some resistance. Obviously 131, the round number, and also those highs from 131 22 as well. So this is kind of how I would have it set up. What do I expect? Oh, I would probably say I think we finish higher than where we do now. But as is the case with a central bank, just be careful of that initial spike. It's not always a guide of where we end up. So let the market tell you what's going on. Don't feel like you have to trade the first 10 seconds. But this, this is how I would be looking at the pound. Euro pound, I'm just going to put this on the, the daily chart. It's been, uh, let me just bring that in here. You can see it's been in a bit of a— was in a bit of a range. We broke out of that. We now have found resistance back on the bottom of that area. Uh, I know people are eyeing up this level. This is obviously in the futures, hence the unclear price action, but a lot of people have been eyeing this level as an area to get short. Uh, whether, whether anything comes of that or not, I have to wait and see. But some very key levels above where we're trading, if it was to be a bearish release for the pound, you can see just how significant this whole area is for the euro against the pound. 25th of November, 25th of December, and then beginning of January as well. So be interesting to see if we can get to that point. Just back to Cable. Well, my levels, I think, have gone, which is frustrating. But those, those levels that I marked up would be where I'd be focusing on for sure. That trendline, very key to the downside. And then the, the little range that we're in now would be waiting for, for that to break through as well. Any questions, obviously, please feel free to get those in the chat. We got about 5 minutes in. Piggy, maybe go short now with a close target profit? No, absolutely not. Not worth it. Not worth it at all. One the market is about to become very illiquid. Let's just bring in the, uh, the trading ladder for you guys just to have a look at in the futures. You can see the amount of orders, uh, just going through, uh, the market, and then the resting orders at each price. You've got about 30, 40 at each tick. Um, what you'll see— and we'll leave this up— what you'll see around midday is, is that, uh, is going to thin out completely. Completely, the market becomes incredibly illiquid. And just because you have an order at a certain price point is not guaranteed that it's going to get filled there. And likelihood is, you know, you're going to see some erratic price action in the, in the next few minutes. So no, not worth the risk, uh, to, to get in either way. Um, uh, and I wouldn't have orders waiting, uh, to, to, to get in for midday either. So yes, there could well be great opportunities to come, but those great opportunities don't start at 11:54. So, uh, be, be patient and wait for, for the market to tell you what's going on. And also, you know, for, for those that are experienced and inexperienced, you know, you don't have to trade these events just because the market moves. Doesn't mean that you have to take that trade on. If you're, you know, using your trade blotter and found that when the market is moving violently, your performance is a lot worse, then it makes no sense to really get too much involved in the initial spikes of the market. In fact, waiting for the second or third opportunity could be the way to go about it. So yeah, you don't want the slippage of of these orders in the market waiting to get in. And obviously the algos will take over and those could therefore get triggered right at the high of the day. Price reverses and then comes all the way back down and vice versa. I think if we go back to November 2016, I think at the top of my head, uh, the, the Bank of England decided to, to raise rates. Uh, the pound against all pairs spiked dramatically higher So even if you had bought then, that actually came all the way back down due to the vote split and also some incredibly dovish comments. So it spiked higher about 50 ticks and then finished about 200 lower. Well, not, not that much, but a fair amount. So I wouldn't want to get involved until you understand what's going on. And Anthony Cheung's obviously run through the, the main things to be aware of. Quite a few of the, the pound pairs on the FX market are at some very key levels. So expecting some decent opportunities even if it is later in the day as well. But like Rahul said in the chat, better to sit on your hands now. That is the best strategy.

So if there is, if there is no change, which is expected, it will be buy the rumor, sell the facts. Is that right?

So I just had a question here just on, uh, if it's— if it is unchanged. Of course, the things we need to focus in is the vote split and how that comes in. Uh, the market at the moment is pretty much as 50/50 as you can get. So off the vote split itself, I'd be looking for, you know, to— for me to want to buy this, I'd be happy to, to get in for a 6-3 for some pound strength. Uh, 5.4, I would kind of say spike one way or another. Just gonna pass back to Anthony Cheung.

Yeah, I just, just wanted to add a caveat to what Sam just said there. Um, if you're thinking that this is just a number and you're listening out for a 6.3 or 5.4 and you're going to trade that, you're going to lose money. I can guarantee you're going to lose money. I can almost bet— I'll, you know, I'll bet £50 right now you'll lose money. That's just the idea then, because you are definitely not going to be using appropriate risk parameters if you're going to hit market like that. And there is way more to it than just a number. There's all the other comments coming out. So unless it is something like a cut with a heavy slant where there's a majority almost for cutting, or the opposite in holding direction, then the 5-4, 6-3, quite frankly, it's just noise either side. Very volatile. So I would suggest particularly with our junior traders. I mean, I guess learning is a fine thing, but I wouldn't suggest trying to just hit market straight off the bat. I think you've got to digest everything, like Sam was saying. There's comments coming out, there's minutes coming out. Put it all together, then make a decision accordingly if there is one. All right, gonna hand it over to Squawk. I'll play it through my my speaker.

I'll then cover the votes bit, the content of the minutes, and the findings of the Right, so this is the movement.

Again, if you're not used to looking at this, there's no rumor, there's no rumor, it's not come out early. Just hold fire and wait. Few more seconds.

That's unchanged. That's unchanged at 0.75%. And that is a 7-2 vote split. That's 7-2 vote split. That's maintaining the rate and maintaining the vote split as before. They say monetary policy may need—

OK, just to be clear, that was 7-2 if you didn't hear it clearly. 7-2.

—are not sustained or domestic inflation stays relatively weak. I do believe that's a reiteration from the previous minutes. And also there's some modest tightening of monetary policy may be needed further out if the economy recovers as forecast. And they've dropped the reference to limited and gradual tightening. So some interesting guidance here, they have dropped that reference to limited and gradual tightening here. And the BOE says market rates imply slightly more BOE loosening than in the November report and points to the bank rate at 0.5% in 2020 and 2021. They also note that risks to UK GDP growth are broadly balanced, and they see possible support from government budgets. That's a potential topping off the cap there to that March budget. Have though— they also know it's too early to judge economic impacts of coronavirus. And in terms of the inflation outlook, they see inflation bottoming out at 1.24% in the third quarter of this year. That's against the November projection of a trough at 1.2% between Q2 and Q3. In terms of inflation projections, the 1-year has seen it 1.53%. That's a modest upgrade from the prior view of 1.51%. 2-year has seen it 2.01%, down from the prior 2.03%. The 3-year, 2.15%, down from the prior 2.25%. From a growth perspective, 2020, that's been cut to 0.8% from 1.2%. That's quite a noteworthy cut there. 2021, that's 1.4%, down from 1.8%, another cut. 2022 also being cut enough, 1.7%, down from the prior 2%. Okay, so just to summarize what we have seen here, so unchanged on the rate, the dump split was also maintained. So I've seen some upside here in sterling as some of the dovish bets were unwound. However though, in terms of their guidance, they have dropped the limited and gradual tightening and have also reiterated their message that they will reinforce with further stimulus if it is warranted. In terms of the projections, there's not really too much shadow on inflation. There's more minor tweaks. However, those growth projections are pretty noteworthy. Again, there's that notable cut to 2020, 2021, and 2022.

Yeah, so just, just taking that off for a second. So let me, uh, turn the mic down. There's a couple of things quickly to, to mention here. Obviously, the vote split big surprise. There was no one that I was reading from a bank perspective were calling for that type of repeat of what we've had in recent months, where the majority of that board are all still standing pat. And so therefore, generally speaking, fairly upbeat, certainly in some of that commentary that followed. I'm just going to flip you over. This is what a Bloomberg screen looks like if you had a terminal. This is what it looks like when they drop all the comments. In reality. So here you can see the 7-2 split, rates on hold. They dropped their guidance for limited and gradual tightening, uh, and then a few other things. Data points to stabilization of global growth as trade tensions ease. So pretty similar to Powell yesterday, but obviously that's a net positive in that respect that would warrant their decision to hold. They did though cut their growth outlook So that's the one part that perhaps does cap a little bit of the runaway upside. Perhaps they did say the majority cited an improved global outlook with less uncertainty, and if the economy improves, modest tightening might be needed. So definitely that's talking the opposite direction then of what would be for those who are the doves calling for cuts as soon as today. So, you know, this, this then is is that outlier situation when, from a number composition, you get one something that was not expected, essentially. You know, no one was looking for that, and so exploded higher. A couple of other points, if you're not used to looking at this, was the market did start to go quite aggressively bid about 5, 6 seconds before the actual announcement. Now, uh, I think you've just got to discount that. I mean, to jump on that thinking that it's out early and it's a positive kind of pre-signal that it's really positive, I think that's just a big gamble at that point. So I know as tempting as it, as it looks, a lot of that as well is a bit of a byproduct of a lack of liquidity. People, uh, just were waiting then to hit it as soon as the information came out. But yeah, a decent spike, uh, certainly to the upside. I'll let Sam jump on to have a look at some of these levels of where the price is responding at the moment. I was just having a look up at the high when it was originally just pushing initially from where we were trading back earlier in the week on Monday. That's probably a bit of a sweet spot on the upside, but we didn't even get up to test at around that mark as yet. So still digesting it for the moment. Press conference is still to come in 25 minutes. So definitely now it's going to be interesting to hear what Carney has to say. But if I jump over to this tweet from a CNBC journalist, she's obviously in the lockup, taken a little bit of snippet. And I guess this summarizes, summarizes it globally. Easing of trade tension, a plus boost from global monetary easing. Domestically, there's been a pickup in survey data. So that's the MPC giving the nod to some of that PMI data you've had from the Boris bounce in confidence given the majority Conservative government, consumer confidence, housing market indicators. Remember, the housing market indicators have seen some of the best performance in a long time since a bit of clarity, at least on the government side, and the kind of mess around Brexit with Boris being able to deliver now into that parliamentary impasse that shackled Theresa May. Uh, so yeah, quite, quite a few positives there for sure. But, um, now with the price consolidating somewhat where it is at the moment, I'd probably be more inclined to just wait now for the press conference, if anything.

Yeah, hi guys. So you can see decent enough push, uh, push there to that 131 area. Uh, also, yeah, some previous support and resistance from earlier on in the, uh, in the week. And just having a look, uh, just putting on a 1-minute, you can start to see we are just trending lower from those highs. So if that is to break at any moment You can see we're really nicely respecting that actually. Then the opportunity there to get long above there isn't the worst idea in the world. I could be, you know, favoring something like that to get in. But for now, relatively quiet, just finding a bit of support, uh, around here, 1.3084. Let's see if we can get a push above this high. I think with, uh, Press conference coming up. Obviously it'd be interesting to see what happens there. If we can get, you know, a bigger retracement, what sort of area? I mean, 130.59 would be, you know, great place to get in, but, uh, I'm not sure we can get the 30-tick retracement to there. That would be, you know, an obvious point where people would look to, to find some support. To wait and see how, uh, how we react around there. Let's have a look back on that 1-minute chart. You can see, you'll still see reacting to that. We're just trying to get above there. Let's have a look to see where we can close. 5-minute might be— might be worth looking at as well. But yeah, like a few of you said there, if you went short before that, you can see you'd be in big trouble. So that's a, you know, good lesson, good lesson to leave that alone before, because, you know, you have no way of knowing what is going to happen. And even if you had, you know, a little short tight stop, there's no guarantee and price actually gets filled at that, at that moment due to the illiquidity of the market. Yeah, still trending lower just from that high.

You think the R2 is a good level to get in for long?

Just got a question here. Do I think the R2 is a good place to get in for the long? You can see you've also got the initial 12 o'clock low. I don't think it's a bad place. However, the only reason I personally would— wouldn't want the R2 is just because I prefer the level a bit below it. I quite like 130.61. I don't think the R2 is a bad place to get in. 130.61 is the area I like. You can see here these lows, looking at that area for potential area for some support. Got the press conference in about 20 minutes.

Okay, just waiting, uh, obviously for the press conference, about 20 minutes now. From my side, uh, what's, what's often quite useful, there's a, there's a few good commentators on Twitter who I'd recommend probably following. Which can give you that little snap insight as to initial interpretations for these types of things. One of these guys is called James Smith, so if I just— I'll switch it over so you can see it here. He's pretty decent. He's the main developed FX coverage for Dutch bank ING. He's the chap actually that would construct this, uh, and actually with this, this graphic here, just having a quick look. So this is a crib sheet which basically is very good for, for guys who are learning because it consolidates really the 4 key areas of the UK economy of what the Bank of England would be looking at. It then has a hawk, um, dove kind of scale of what the outcomes could be. So if they cut rates, all vote for a cut, or if they hold, and so on. So actually what has materialized in this matrix is the most hawkish, is option 4. Now what they were saying initially in the buildup was improvement in sentiment to materially lift the pace of activity, rising up investment forecasts and rising sentiment, reduced degree of near-term slack following Brexit deal package. Certainly heard that in some of those initial comments. And hints that market pricing too dovish signals rate cut is unlikely, which they also said was some of the accompanying contrary about tightening policy in the future. So certainly it's a good way of getting hold of, of preparation. So that's— he's a good guy to follow. There was one of his colleagues that has since moved on from that economics team who's also pretty decent in these situations, Viraj Patel. So this, this guy's worth a follow if you were looking at UK stuff. So you can see here, he'll, he'll be giving snap commentary as soon as these things are happening about what his, his take is. And so it can be quite useful when it is, let's say, a policy event where you need— these guys are basically economists and strategists, so it's their job to be all over the language changes and and so on, it's quite a useful thing to just have them plugged into your feed in that respect. But yeah, any other questions, let us know. I'm going to turn the squawk on. And then we'll await the press conference shortly. Just, just coming out of the intraday environment for a second. I was just putting on the, the time frame of the Cable chart, making it slightly longer. So I'm looking here, putting into perspective. If I put another line here, this is basically the year-to-date price action of Cable. And you can see that kind of squeezing of the price in, although it was a lot tighter before that, that, that break that we've had on this hawkish surprise. Uh, at the moment, on the bigger picture of things, certainly there's still a lot to, uh, unravel, I'm sure, with whether or not Brexit over the coming months is going to be successfully negotiated. Obviously, the likelihood of that we're quite, quite generally bearish at Amplify about the overall endgame success. Might be one of which a deal can be done. However, such as the process of negotiation, typically things get worse before it gets better. So I'm just talking about, you know, outside of just holding a short-term position. If you were thinking about the more medium, longer term, it's quite interesting just looking where we are at the moment trading around the 131. We're still pretty, pretty mid-range really of where we've traded so far this year overall. I mean, I'm just gonna have a look at the actual year-to-date on the fib from the high to low, pretty much from that, that price movement, and we're kind of still right bang toward the middle of that at the moment. Back to the short term though, obviously the focus in a moment is going to be certainly on the press conference. I can hear Alex talking to the guys in the other room. Parading around. He's right though, he was just saying, you know, if you've got a position on now and if you were in that trade, then, you know, just, that's it, just gotta be patient. Typically though, from it, from an intraday point of view, if you're not in a position already, it's probably more prudent now that you just wait for the press conference. The press conference follows a very familiar format to last night with Jerome Powell. So Carney will come out, he'll read like an opening piece, and then he'll be at the disposal of the press where he'll go through a question and answer session for a period of about 45-50 minutes. I would imagine, given it's his very last one, it could be a little bit grating about the press just talking about his legacy and, and so on. But I guess the real sweet spots, uh, if I was looking at, you know, with the press conference last night and the focus on the balance sheet, perhaps with this one it's going to be perhaps a few questions about how the markets were priced. Why was there such a disconnect between what you were communicating in this end outcome you know, I'd be quite critical if asking him the questions, well, you've not really managed that process particularly well. What's his thoughts around that? I think that that could come up. Obviously the implications on Brexit, the coronavirus, but again, what we've heard so far about any mention of that's been like Powell, fairly light touch. I think really too much. Uh, Jenny and the chat You better stop the love hearts, my wife's gonna get jealous. Cool, any other questions? Any questions at all for Alex perhaps? Maybe I'll get him to jump on, or Sam, just let us know. One thing I thought was quite good, so yesterday I took Alex and Sam for a drink And I think it's good. Hopefully it comes across in that way that it's quite beneficial to see 3 people who look at the markets generally in a, in a slightly different perspective. The main thing I guess here, what we try to encourage, and I want to say that as well for any of the guys who are currently on the program, is that, you know, it's not our job to try and force-feed you to trade in one certain type of way. I think you've got to, you've got to have a base level understanding of how markets function and the overall general fundamentals on a macro perspective. But how much generally you are trading these types of news events is really up to you. But obviously learning the technicals is key, a competency to have, and then the prudent kind of risk managing of these trades and having the skills on the execution side. And then, you know, all I would want is that we're here to then support and develop that forward in whatever path that you decide to kind of pursue in that sense. So there isn't one fix in that respect. It's definitely got to go with what you find best.

We'll only be putting out the main ones. If, however, you want to tune into every synth on the Yeah, I'll do the same as yesterday.

So the press conference, when it begins, I will— I'll play the audio of Mark talking, and then if he says anything particularly important or if there's any response in markets, then I can turn him off and we'll talk about it as it's happening. But that should kick off in about 8 minutes. Yeah, Hans, that makes sense, that phrase that you've identified. So I guess this is a little bit of the balancing act of what they're doing with their language. They're not cutting rates, but they're dropping this idea about gradual tightening. So, yeah, basically saying they're going to stand pat and not do anything. Yeah, Fez, you know, me and Marky Mark going to hit the town, smash it up, celebrate his last day at work. Coming up tomorrow. You know how it is. You're welcome to join. Yeah, a good question here. I've heard that some people have the opinion that trading the news isn't that beneficial for a retail trader, as the news will be portrayed in the chart even before the news is released. What do you guys think? Well, yeah, I, I definitely agree. I think, I think trading the news as a, as an idea, I would say, is the most advanced form of trading and the most volatile, unpredictable, and riskiest form of trading that you could pick in terms of an approach. Ultimately, to be a really agile, effective macro trader, you've got to have a pretty high level across a variety of different subject matter in terms of breaking down the news, whether it's geopolitics, whether it's, um, you know, domestic politics in Europe or in the US, whether it's the situation in the Middle East, you know, all these different types of things. I think that's why it's not easy to do How do you actually get to that point? Well, I mean, experience is a, is a fine thing, and the more you're involved in the market, the more inevitably you're going to pick up and accumulate these subjects over time. But yeah, for a retail trader, if you're doing this part-time, and I definitely would not really encourage trying to just hit high volatility events until you're much later down the line. And if you think about it, if you are swing trading or you're hoping you're holding positions over a medium term, for example, I think there's no real need to step in harm's way when you're trading the kind of outer bigger time frame picture. If anything, that's a less riskier and I think a more consistent way for someone to develop over, over time. Uh, in terms of the idea about this, this notion that, um, the news is already portrayed in the chart, um, I, I often hear that. I'm not sure if I agree. I get the idea that markets are priced for certain outcomes, but then, you know, it's not about trying to predict things in, in a sense of, right, I'm going to go long before an vent and try and get lucky. That's not all— that's not what we do. I think the idea here about pre-positioning— so here the pound had been suppressed because over a period it's had to reflect the notion of potentially a rate cut materializing. So when then we get a situation like this where technically speaking nothing has happened, they've held rates, the fact of it being a 7-2 split not, I'll say, a 5-4 is very meaningful against that market positioning and consequently has a reaction. So I definitely think, you know, trading the news is possible for sure. It's pretty much what I'd specialize in. Trying to do it without Squawk, I think, is pretty much impossible because ultimately you've got to, you got to be monitoring the news of the time, and you cannot do that really and trade at the same time. Hence the reason why here we have a full team doing that 24 hours a day, and that obviously makes our life much easier. So their job is to identify all the major headlines coming out, any rumors, whispers, these sorts of things. Just having a look.

I'm on a plane grounded in Moscow Airport. We're watching the story. If there's any implications for markets, we'll let you know. But we have seen it is on our radar. Not sure there's going to be a strict market implication at this stage, but you never know. It's on our radar.

Yeah, just having a look then at this pound as it, it grinds up going into the commencing of the, the press conference. So coming up to that that area there that's looking quite interesting is an area of potential resistance here from these previous week's trades. And that we did initially on the initial pop get up to this point before the pullback. So let's just see how it reacts up and around here, and then we'll wait for Mark Carney to begin. So another question, how is it that there's a bigger move in pound before the release. Uh, again, you know, I don't think you should overthink that, to be honest. Um, UK, the Office of National Statistics, so basically the agency behind GDP, retail sales, and everything else, there has been a historical pattern whereby the leaking of data was quite a common thing maybe a decade ago It doesn't happen really these days, and it leads a lot of— often you get retail traders again with the— I guess they don't want to take accountability. It's not my fault I didn't make money, it's the hedge funds, they've got information, and all these sorts of things. I think you have to eliminate that out of your mind, you know. If you're gonna think like that, it's gonna be— I don't think you're gonna be successful in markets. Because, you know, being open and honest and taking accountability for your actions is, is one of the main core components, I think, of being successful in the marketplace. So yeah, with that pre-movement, you know, is it someone there who's got it early? You know, perhaps. I don't think you can really jump on that, and you are basically taking a massive gamble if you're just gonna jump that, get long long before it comes out, and I would not really suggest that, to be honest with you. Okay, it's about to kick off shortly. We've got about another minute, so any more questions, keep them coming, and then I'll, I'll put Carney on. And again, the format, he's going to kind of read out initial statement and then the Q&A.

Until the beginning of the Bank of England press conference. As ever, Carney will initially be speaking from pre-prepared remarks. For the question and answer section of the release.

Okay, just looking at the live shots— the live shot of a door. Wow, that's the Bank of England all over. As grey as it gets. Okay, they're coming out now, so Carney will begin momentarily.

Good afternoon all. Welcome to the Bank's Monetary Policy Report press conference. On my far right is Ben Broadbent, Deputy Governor for Monetary Policy.

On my left is Andrew Jackson, Deputy Governor for Markets and Banking.

And on my right, the Governor of the Bank of England, Andrew Carney.

Thank you, Mike. Good afternoon, everyone. From an economic perspective, the last decade ended with a whimper. The global economy moved from a broad-based expansion to a widespread slowdown. Manufacturing slipped into recession, global trade contracted, and overall growth fell to its weakest pace since 2009. In the UK, entrenched Brexit-related uncertainties added to the global drag on demand. Domestic activity. Last year, the UK economy grew at its weakest pace since 2010, as business investment remained subdued despite having grown barely at all in the prior few years, and households began to rebuild savings and cut back on durable spending despite the resilient labor market. Overall, UK activity likely stagnated in the final quarter of 2019, leaving the economy operating with a margin of excess supply. In parallel, CPI inflation fell below the MPC's 2% target, reaching 1.4% in the fourth quarter. While this weakness largely reflects energy prices, core inflation has also slowed, and domestically generated inflation pressures outside the labor market remain contained. So the question facing the MPC at this meeting was whether the new decade that the decade would start with a bang. Certainly, political developments have been significant, leading to the U.K.'s historic withdrawal from the European Union tomorrow evening. On the economic front, the bar is more modest. At its December meeting, the MPC had projected that U.K. growth would pick up from below potential rates, supported by a reduction of domestic uncertainties and a modest recovery in global growth. On balance, early indications are that both conditions underpinning the projected UK recovery are on track. The most recent signs are that global growth has stabilized, reflecting the partial easing of trade tensions and the impact of a significant loosening of monetary policy by central banks over the past year. The global manufacturing PMI has returned to expansionary territory, helping push the composite PMI to a 6-month high in December. The hard data seemed to be following suit, with global industrial production swinging from contraction to expansion in November. And recent growth outturns in the euro area, the U.S., and non-China emerging market economies are coming in slightly stronger than expected. Domestically, indicators of uncertainty have fallen broadly as the MPC had expected in its November projections. For example, the proportion of firms citing Brexit as one of their top 3 sources of uncertainty in the bank's DMP survey fell below 45% in January from 55%.

So at the moment, you know, fairly, fairly plain, nothing really being said that really sticks out. Again, it's the Q&A really where things can get a little bit more interesting. Usually he'll be talking this opening statement for about another 2 minutes or so.

More timely survey data that relate to output, output growth following the election have increased sharply, with the movements particularly marked, marked in the most recent releases. The very latest surveys suggest growth will pick up in the first quarter to around 0.2%, in line with the MPC's projection 3 months ago. Businesses reported a sharp movement and a sharp rise in investment intentions in the recent Manufacturing CBI and Deloitte CFO surveys. And there are signs that lower uncertainty is boosting housing activity, the area of consumer spending where the drag from Brexit had been most evident. The latest data show that the labor market remains resilient, with employment growing strongly towards the end of last year and unemployment at its lowest level in over 40 years. Vacancies rose modestly in December, reversing the pattern of near-continuous falls since the start of 2019 and tempering earlier signs of a slowing in labor demand. Households remain confident about their own financial situation, and their confidence about the general economic outlook has improved to its highest level in a year and a half. Reflecting these positive developments, the MPC judged that it was appropriate to maintain policy. To be clear, these are still early days, and it's less of a case of so far, so good than so far, good enough. It will be important for the hard data on activity to follow through on the recent pickup in surveys and for domestic price inflation to strengthen. Though the global recovery— though the global economy looks to be recovering, caution is warranted. Evidence of a pickup in growth is not yet widespread. And any one of the known risks, such as a revert— renewal of trade tensions, could reverse recent progress. The emerging threat from a new strain of coronavirus is a reminder of the need to be vigilant. In the UK, although early signs are encouraging, the recoveries in growth and inflation are also not yet assured. Uncertainty is is still elevated by historical standards. Strong investment intentions need to be translated into action. Domestic price inflation has remained muted, even as growth in unit labor costs have risen. Core inflation has slowed over the past year, and core services inflation has generally been some way below the rate estimated to be consistent with the inflation target. In its annual reassessment of the supply side of the economy, the MPC judged that the weakness in domestic price inflation— —indicated that the margin of slack has been slightly greater over the past few years than it had previously estimated. At present, excess supply is estimated to be around 0.5% of potential GDP. That spare capacity lies within companies with little slack apparent in the labor market. However, it's unclear whether the wider margin of slack can fully explain the weakness in domestic prices relative to the strength in labor costs and for how long that weakness might persist. The Committee will explore these issues further over coming months, considering U.K. developments in the wider context of relatively subdued subdued inflationary pressures but strong labor markets globally. The MPC also reviewed the outlook for supply over the forecast, judging that productivity growth would pick up only a little from current rates. That judgment reflects, first, some continuation of the experience since the financial crisis of persistently weak productivity growth in the UK. In the UK; secondly, a period of very weak business investment in recent years; and thirdly, the weight on productivity in the short term from the adjustment to the UK's new trading relationship with the EU. The slower rate of potential growth also reflects a more modest rate of expansion in labor supply, as the two factors that have boosted labor supply in recent years—namely, rising trend participation and falling equilibrium unemployment are not expected to continue given their historically strong levels at present. In the MPC's latest projections, the tentative signs of a global recovery are borne out, with growth rising back to potential rates. Domestically, uncertainty fades gradually, as more details about the new trading relationships emerge and companies assess how those affect their businesses. Overall, conditioned on the market path of interest rates and the increased government expenditure announced in last year's spending review, U.K. growth is forecast to rise above the weakened rate of supply growth. Slack is expected to erode gradually over the first part of the forecast period, and a margin of excess excess demand is expected to build thereafter. CPI inflation is projected to remain notably below the MPC's 2% target throughout this year and much of 2024.

Just, just a few points then as we continue to listen to Carney. Obviously there's not, it's not a great deal of movement happening at the moment, and that's basically because he's not really saying anything new, information we don't already know. In this situation, if you are you know, new to monitoring these types of events in this fashion, it's just about patience now. You know, if you haven't been able to, to get a trade in earlier on and you, you might have missed that earlier opportunity, which I know Alex has been talking about, then, then just wait, be patient. You know, when we get to the Q&A, it only takes one, uh, kind of comment offbeat and that's it, we'll get another move. So the likelihood of that happening Sure, might be low probability, but you want to be, you know, kind of prepared for that and not just getting into something now inappropriately just because of a, you know, a lack of patience, if anything. So, you know, just sit tight. The Q&A will start shortly, and then when that kicks off, it can get a little bit more interesting again, and perhaps we start to see a kind of secondary phase move. What direction of that? Yet to be seen. Let's see, see what the questions are and how he responds.

Carbon economy. The MPC will need to assess the implications of all these developments for the balance of supply and demand and set monetary policy to deliver price stability in a way that helps smooth adjustment and supports jobs and growth for the good of all of the people of the United Kingdom. And with that, Dave, Ben, and I would be pleased to answer your questions.

Okay, into the Q&A.

Please, give us your name and news organisation when asking a question, wait for the mics to circulate, and one question at a time, please. Start over here with Ed and then Faisal.

Thanks, Governor. Ed Conway from Sky News. One of the things you mentioned was that in your annual assessment of the supply side of the economy, you've cut your assessment of that kind of long-term non-inflationary growth potential for the UK. Well, I mean, in short, does that mean that the UK is a weaker economy now than it was, say, before the referendum? And if so, how much of that is down to Brexit?

Yeah, well, so part of the reason we do once a year a assessment of the supply side of the economy, combination, as you know, of labor supply and productivity, is to bring together all the evidence, all the learnings, all the analysis in one spot and make some of these judgments. And they are judgments. In terms of the rate of growth of productivity, I think it's fair to say that we and others have been persistently disappointed since the financial crisis about the rate of productivity growth. Obviously more understandable because of the distress, if I can put it that way, in the financial system and the overhang of the excesses of the pre-crisis period. But that is very much in the rearview mirror now, and certainly since— in the time that I've been here, the last 6.5 years, there has not been that recovery in productivity. So part of this is just bringing forward a continuation of a past trend. That's the first thing. The second, we do have to recognize that in the period since the referendum was called, business investment has been very weak. It's gone from the strongest in the G7 to the weakest in the G7. And that accumulates over time. It's not just capital investment, but it's process investment. And on top of that— and there's some evidence on this in the report— that businesses businesses over the course of certainly the past year, because of a series of cliff edges in certain sectors, have had to devote a lot of time to contingency planning. And the time they can only— you know, there's only 24 hours in a day, and the time they spend on that is not time spent on expanding. So that has contributed, and there's some payback from that activity over the forecast horizon. And then the third thing is that we are moving more rapidly to the new relationship with the European Union than we had originally modeled. I mean, we didn't know— people didn't know what the horizon was going to be for the adjustment. Now it's very clear the intention of the government is that we will move immediately by this time next year to a— a deep free trade arrangement with the European Union. There is some— there are some adjustment costs with that. If I can make one more point, though, is— and you would have caught this, but let's make sure everyone does— is that the rate of potential growth isn't just about productivity, it's also about that labor supply side. And there have been two major positive trends, very positive trends in the labor market over the course of the post-crisis period. A lot more people have stayed in the labor force, not always for the most positive reasons. Initially it was because they had to repay debt for many of them. But as it is today, participation rate, the number of people in the labor force is very high. And most of them are in work. In fact, 3 million jobs 3 million jobs have been created since the recovery started in 2013. 3 million more people are in work since then. But those levels are now— unemployment is so low, we think it can go a bit lower, but the number proportion of the population that are working is so high, there's just not that much more of that to happen. And so the growth in the labor force, it tends to come more from natural population growth. So the combination of those two things mean that the speed limit of the economy is much lower than it was a few years ago.

Just one very quick thing, Ed. You said we lowered our estimate of the, quote, long-run potential. We don't forecast the long run. We forecast out to 3 years. So I don't think it's fair to describe it as that. I mean, medium term, maybe. And on specifically whatever the effects of Brexit are, we've generally understood those to be in terms of the level of output, not a permanent effect on the growth rate, which in any case we don't predict. So I wouldn't use that word to describe what we've done. As the Governor says, it's a mixture of these effects of, you know, what's happened since the referendum, what might yet happen because of it. And just learning from a whole sequence of disappointments in underlying productivity growth. BBC.

Governor, the monetary policy report says it's predicated on the achievement of a deep FTA this time next year. The government, since your last meeting, have both said that they will not extend any negotiation period beyond a year and also seem to be aiming for less than frictionless trade without alignment. How would not reaching a trade deal impact on these growth and inflation numbers? And has the less ambitious alignment options also impacted things?

Okay, um, thanks for the question. It helps clarify aspects of, um, of the forecast. So the assumption in the forecast I mean, we take government policy as given, and it's as you describe it. And importantly, it's for an immediate move on December 31st to a new deep free trade arrangement with the EU. So I'll emphasize the point about immediate, so there's not a transition period between where the economy is today and where it will be, where the economic relationships are. We are assuming that that is an orderly transition. Okay? So we're assuming that all the necessary border infrastructure, customs arrangements, EORI numbers, all the types of things we've been thinking about that— and companies have been thinking about and governments have been thinking about that is necessary to move from being part of the European Union to a free trade arrangement, that those are in place. So that's an assumption. People work very hard to make sure that that assumption is validated, but yeah, it's an assumption. The second thing is that what is different about this forecast from the November forecast is that immediacy, and there is not a smoothing of the adjustment and the bringing in of some of the customs and other regulatory frictions that would happen with a move to a free trade agreement. So I'll give you one example, which is noted in the report, which is that a number of financial services firms will lose the right to passport, even if equivalence is granted under EU-style equivalence. Now that's an open question, what I just said. That would be an assumption.

Yeah, quite interesting to just keep an eye on cable. It looks like it wants to just perk up a little bit. And obviously we've got an area of resistance here just above, but what he's saying thus far has all been a pretty even keel, and it certainly hasn't been dovish in any shape or form so far. So considering the surprising nature of the split, sometimes a lot of people look at this as in if they take a kind of more hawkish approach, they hold rates, they follow that with some more dovish kind of commentary. Well, really that hasn't been materialized as yet. So quite interested to see if we stay in this pattern, if we do get a bit of a test at around these levels for potentially another push on the upside. But obviously we'll continue to, to keep a close ear on the questions and his responses as they come in. A quick look at the other asset classes, obviously nothing really moving now. Don't forget we have the advanced US GDP figure coming out in about 40 minutes, and that obviously is a, is a bigger catalyst potentially across asset, certainly in North America and everywhere else. So definitely need to, to factor that in as well. For the moment, things quiet into that big event, but we'll continue to monitor and focus on the pound and Carney for the time being. 2.8, 2.9%. You could grow at that level without any rising inflation. Now we're at an average of 1.1% over the next 3 years. What do you think's gone wrong in the UK economy? Yeah, I mean, Simeon, I hope you're well. Um, but yeah, I do, I do agree with you. It's almost like Carney is just too good at his job, uh, basically kind of not really saying, saying lots of things without actually saying anything, and kind of calms markets. And he kind of dodges any bullets that might come where trying to goad him into saying something about Brexit and so on. But, you know, he's, he's on— he's not gonna make those types of mistakes now given his experience on the big stage. So yeah, it can mean for quite a boring outcome. But look, still, we'll monitor it to the end. Let's see The other thing then we'll need to start considering, if things do remain as they are right now, is if that GDP number comes in weak, weaker than expected, and that hits the dollar, well then it gets quite interesting for the pound. Because if fundamentally short-term, obviously we've had quite a hawkish surprise here with the developments so far, particularly with the split, and not kind cutting, then there could be another push beyond that technical point of resistance. And then we start looking more further to the upside of the range toward the mid to back end of last week. But that would be contingent, obviously, with the US numbers coming out later.

I don't have the figures at hand, in part because we didn't— which is one of the changes we've made. Now you know what our supply as you should, and I think you helped push for this, you know what our supply assumptions are for the forecast. So I don't have the figure at hand of what we thought the speed limit was of the economy. In other words, for those who don't follow as closely, just the rate at which supply growth was going to proceed given the starting point. But I suspect it was probably in the range of about 2%.

I think probably, as the Governor says, starting from that position—

this will be a brief Technical detail.

Starting from that position, the unemployment rate's a long way above the natural rate, so the economy can grow quite a lot on top of the underlying trend. So I'm not sure the 2.8% should be taken as the guide to what we expected to happen in perpetuity, but I think probably yes, it was in the region of 2% or so. It's now in the region of 1% or so. And of that 1 percentage point drop, half is in labor supply and half is in productivity, about half a point each, roughly. And some of that labor supply and some of that, you know, some of those half-point drops may have been just because of experience, and some of them may well have been and probably are because of developments in the economy, including the consequences of the referendum.

So, and so just to try to bring it together, I think in terms of the Bank of England's contribution, I mean, as you know, in terms of monetary policy, it's principally about the nominal side as opposed to what's happening on the real side, so the rate of growth and productivity are certainly— well, on the margin, we can affect labor supply. Certainly in the short term. But the big call we've had to make on monetary policy, or one of the big calls we've had to make on monetary policy, which we made very early on, was that equilibrium interest rates were very low and likely to stay low for a very long period of time. And that's something, you know, in December 2013 and then codified in the February 2014 monetary policy report, we set out why we thought We thought that was the case. And phrases come in around that, limited and gradual at the time then, to try to get that point across and help companies and households form expectations about where future interest rates might go and then act accordingly. I think the bigger— so that helps, in our view, that helps both on a cyclical basis. To use up that spare capacity. But for structural supply, if I can put it that way, or structural potential growth, you know, our principal contribution as an institution is around the financial sector. So a different committee, the Financial Policy Committee, and ensuring not just— and we had to finish the job on the banking sector restoring to health, but ensuring that market-based finance was robust as possible. I think there's been considerable progress, but as we sit here today— and I'll finish on this— we do think that certainly small and medium-sized enterprises remain underserved by the financial system, and so there are supply opportunities that can be unlocked there. And that's part of the future finance work that Dave and others are leading.

Philip Aldrich at the Times. Markets have been convinced that this was going to be a rate-cutting meeting. As it turned out— I mean, that was driven by speeches given by yourself and others on the MPC at the start of the year. As it turned out, it's actually relatively hawkish. You seem to have dropped the limited and gradual language, and, uh, and, and suggesting that we're going to have to have some tightening ahead. Just in the context of forward guidance, which obviously you introduced, does this suggest that it hasn't worked? And would you recommend that your successor maintain forward guidance?

Well, so big question. Let me go from the general to the specific. In terms of forward guidance, It's part of the armory of every major central bank the world over. It's an effect— it is not the only tool. It's one of the key tools that we as central banks have, and it is particularly relevant in the following situations: one, when equilibrium interest rates are very low; secondly, when you are at turning points, either in tightening policy or loosening policy to provide some dimensions around that. So I think, you know, the jury is in at least on forward guidance and the utility in general. Secondly, I'll just refer back, and I won't repeat it, but to my comments, part of my comments to Chris Giles, which is that where it's relevant here is a couple of calls that the MPC has made. And it's the MPC, it's not the governor, it's the MPC has made.

Yeah, so we're just keeping an eye on cable. It has just had that first little test up and around those, that kind of cluster of highs that we were looking at. I mean, that again, that trend line, that's what I was looking at on the slightly longer time frame. So if we go back on the 90, it's going back to the kind of yearly price action with some of that price activity here from the high and where all was restricting some of the price movement from really midweek last week. We did break above that, but I'm still just quite interested to see the cross with that, with the, that range high that we had in the low from last week on the 23rd, and then the following Friday, and then the Monday high from this week. So first sort of test there, so he continues to just take this Q&A.

Continues to be effective in terms of their rate expectations around that. Now, if you move to the current situation, I think it's pretty clear that the speeches, the speech I gave at the start of this month underscored a debate within the committee which was flagged in the minutes of the December meeting and also the November, but more sharply in the December meeting, which related to whether or not we were going to get a bounce following the election and potentially greater clarity, and whether or not the global economy was going to turn. And literally what I did was repeat what was in the minutes to say there is a debate at the MPC. I mean, there was a debate. There was a debate then and there was a debate over the course of this month, and you'll have to wait 8 years for it, but in the course of the actual meetings of the deliberations— the majority of the committee came down on the side of holding policy because—

You just got the German CPI coming out, out, but just to reiterate, obviously we've had all the German states come out, so the pan-German reading is not market mover.

Data needed to fill in or else some additional stimulus would be required— would likely be required, I should say— to reinforce the recoveries in GDP and inflation. Last thing I'll say is that the premise to your question, as you probably know, is wrong, because you had a 45 to 50% probability in the market of what we would do at this meeting. The market was not— I'm sure people who were priced on one side you've spoken to who say X, but there's a lot of people on the other side. That's what a market is. And market can read the data, and different people in the market have different views on what the right decision would be or what our decision would be. But we're the ones who take the decision and the judgment is laid out and we'll see how the economy evolves consistent with that. Okay.

Lucy and Lucy.

Governor, could you give us a little more guidance on what you— what we should make of you dropping the limited and gradual guidance?

The minutes now say some moderate some modest tightening might be needed, but the forecasts indicate inflation only really hits the target with a cut.

So how do we reconcile that?

Well, you have two things, Lucy. I'm glad you reinforced that. One is that the— we use a conditioning path, as you know, which gets set in, set in stone a few days prior to the release of the report. So it's a 15-day conditioning path which rises to about 60 60— rounds to about 60 basis points. So there is a reduction and then a pickup in the market curve that we have used for the forecast. That, as you would have clocked, that leads to inflation being slightly, well, above target at year 3, so not consistent with the— with the remit. And certainly— and we're not in exceptional circumstances at this time. We haven't flagged that. It isn't consistent with sustainably returning inflation to target. But it does get to the point of, well, how much— what's the curve that would necessarily— if the other aspects of the forecast are accurate or if the economy broadly follows that, what's the path of policy that would be consistent with returning? You know, there would be, said some modest tightening, it actually is the opposite of what Phil said because— that's two things that were the opposite of what you said— because the point— I mean, limiting gradual— things are gradual if there's multiple. Things are modest if they're not.

Okay, Russ and then Jomana.

Russ Lynch from The Telegraph.

Governor, I thought, given your slightly more pessimistic view for the economy's supply potential, what you thought of Chancellor Javid's recent comments about his ambitions to raise growth to 2.6-2.8%.

Do you think it's achievable? Well, I think the— I'll say this. Which is that the Chancellor's focus on these issues is very welcome. I mean, it's consistent with the issue, which is that I know he personally, the government in general, people up and down the country are disappointed with the underlying performance of the economy and recognize that some fairly— potentially, I'll leave it to others to I'm not going to decide exactly what, but potentially large structural changes need to be made in order to get that rate of growth of supply up, because ultimately that translates into higher real incomes for all of your readers or listeners. The Chancellor— the Chancellor speaks for himself, but would recognize that This is not something you change overnight. It's something that's developed over a period of time. It takes concerted effort, investments or policy changes which have longer paybacks to them, but paybacks that keep giving because if they're effective they've actually raised the rate at which the economy improves, people's incomes improve over time. So I think that's— I don't, then I'll stop here. You know, it's, it's a common issue. We're just calling—

yeah, just, just to jump on the mic before you all fall asleep, because obviously this is, this is getting, this is getting a little jarring to watch. But, you know, it's kind of the nature of the beast, I guess, these, these policy events. And as I think Simeon said earlier, uh, Carney's just, you know, he's highly unlikely to put a foot wrong. And so that idea of him saying something inappropriate and causing a kind of spark of activity is, is pretty much close to none. So at the moment, I, I guess if anything, he hasn't sound dovish. But rather than just kind of add and continue to move higher, I mean, I guess take into account the fact that we have already moved a pretty decent distance just on the back of what occurred earlier anyway. I mean, if you look at where we were pre-release trading, really that, that range of the last 24 hours, the break of that, we were at 1.3047. Now we're trading up, you know, a decent 60 pips above there at the moment. There's obviously an area of resistance sitting just above, so the fact that it hasn't pulled back, I think, satisfies the notion that this is a little bit of a hawkish surprise, just in general summary. And he hasn't come out and tried to tame that in any way with sounding dovish. So we've just held that 50-pip gain. But again, I don't think it's, uh, I don't think it's a real game changer medium-long term. As he was discussing in the first couple of questions, there's still certain assumptions around a, a smooth transition with Brexit, but obviously we know that that's not straightforward. Forward thing. And, and certainly the implications that the bad negotiation can have and its, its impact on the pound, as, as that gets priced in, can have its economic consequences and therefore policy reactions. So at the moment, again, it's, it's not particularly interesting for now, and I don't think so far that it's probably likely going to lead to any type of move now. I kind of see a plain sailing now to conclude this event, but we've got US GDP coming up, so I'll leave it to about quarter past the hour and then we'll come off of this and then we'll do a little preview for the US GDP number. So I'll leave it with Carney for the moment.

When you took over the bank in 2013, 2013, bank rate was 0.5%.

As you leave, it's 0.75%. Notwithstanding what you said about low equilibrium interest rates, if you'd been told back then that the process of normalizing rates would be so slow, would you have been surprised?

I mean, the short answer is yes. And you inserted the right caveat though to that, which is that— and I think, I mean, I guess one of the disadvantages but also sometimes advantage of being a governor is everything's on the record. So if you look back at the speeches at the Bank of Canada in the run-up to it, you know, talking about living with low for long before I came here. Now, but I wouldn't have been as— my view then would not have been that equilibrium rates would have been as low as they have turned out to be, first point. Secondly, I do think my view— step back from the Committee, although there is as an MPC framework, which is consistent with what I'm about to say, but different members of the committee would have different views on where R* actually is in the UK, is that UK R* has been lower than global R*. The equilibrium rate in the UK has been lower than global R* because of— in part because of the uncertainty the economy has been working through. And up until very recently because of, you know, a sustained fiscal contract— contracture— consolidation is a better word. Now, the latter is going away, shifted with the spending round, so we're in expansion mode. We don't know what's in the budget, but, you know, signals are that there may be more fiscal stimulus to come. All things being equal, pushes up a bit equilibrium rates in the UK. And one of the questions is around uncertainty. We've seen the bounce in the surveys. It's corroborated with our own agents' work, you know, at least directionally, that uncertainty has gone down, investment intention picked up. But that's a— you know, it's a very short time series on that. And I think we're all conscious that, less than 12 months to negotiate and implement a new trading arrangement. So we'll see to what extent that is sustained. But if we do get that reduction in uncertainty as well, in a sustained reduction in uncertainty in the UK, that's another thing that would push up equilibrium rates on the margin. But still, it's relative to history, relative to— including my— what would have been my expectations in 2013 when I came here, it's still— even with that, even with those tailwinds, if you will, to equilibrium interest rates, it still would be lower than I would have expected then. The last thing I'll say, though, is that the revealed outturns on inflation, not just in this economy but globally, validate that view that equilibrium rates have moved down quite substantially. And there was a lot of noise in 2012, 2013 when a few of us were talking about this, that this just couldn't possibly be right. But unfortunately, it is. Francine. Francine from Bloomberg TV. Governor, is the coronavirus actually the biggest risk at the moment to the global economy? It's— I, I, let me answer it this way. I mean, I think the first thing we should recognize that the virus is, as you know, affecting a number of people, and we should acknowledge the, you know, the difficulties and the pain for those directly affected and the anxiety for, you know, literally, I suppose, hundreds of millions of people now whose lives have been at a minimum disrupted by the risks around this. And all of this taking place not just in the world's largest economy but now spreading out to other economies. So we need to acknowledge that. It's very early days. We are, like others, monitoring this quite closely, as you would expect. And, you know, like Chair Powell yesterday, I don't want to speculate in terms of orders of magnitude of impact on potentially global activity and the flowback to the U.K. But it's something that we will be looking at very closely. And yes, it is now moved from something that wasn't there prior to the start of the year. I mean, it was really only identified, as you know, on New Year's Eve— Western New Year's Eve, not Chinese New Year's Eve— December 31st.

And— He's just talking about coronavirus at the moment. Kind of the inevitable question, of course. And yeah, a few of you just commenting. Yeah, it's a tricky one because obviously there's two ways of looking at it. There's the real disease and the outbreak and the spread, which is undeniable. It's a difficult situation for those involved. But from an economics point of view, yeah, it definitely is going to have an economic impact. But the point, I guess, from a trading perspective is, well, what are the markets expecting? Because if the markets are expecting a negative economic impact and that has in a sense been now factored into prices, well, then it getting worse is not necessarily a bad thing for markets and not a, not a big deal. So again, it's a fairly gray thing to try and quantify in regard to when you're looking across assets to see Well, what, what would then be a negative development beyond that of a negatively mindset market? But as I've kind of suggested in the briefings, and you know, let's just quickly transition my screen, so have a quick jump back to the live coronavirus portal, if you like. And yeah, I mean, the total confirmed case is still tracking just under 8,000 I just saw a headline come out just while Connie's been talking. Hubei, which is that region which the capital city is Wuhan, has had 317 new coronavirus cases Thursday as of, as of 12 PM. And I would say, I don't know, my take is those numbers are pretty small. I think the way that the market general feel and sentiment at the beginning of the week. You remember when the, the S&P got really whacked, one of the biggest down days in multiple months. I think people were more fearful that— I think if you asked people in a survey on Monday or Sunday night, what do you think about the total confirmed cases and deaths of coronavirus on Thursday, Friday, I think most people would have given you a much bigger number than what actually has materialized so far. And that's not I'm not saying this number is not going to go north, and I'm not saying that perhaps this number is a little bit light because it's hard to get an accurate reading on this actual situation. For the moment, it's a contained thing. And so, you know, as per what the Chinese economist was saying yesterday about the impact of around 1% on China, I guess what, what's important now for markets is about does that percent become 1.5%, become 2%. This would all be contingent on further expansion across the region, more cases, and it growing quite considerably from this where it's at, where it's at at the moment. And then also any potential extension on this, this lockdown period in an attempt to contain it by extending the Lunar New Year holiday. Remember, Chinese markets are set to reopen on Monday, but it could be quite a difficult thing for them to actually enact that. And I don't think it'd be wholly surprising to see them bump that back maybe another few days, just because they don't want people out going to work and using transportation and all these things are currently in lockdown. So going back to the pound though, let's go and have a look because we've just— we're just having another push up at those highs again. I mean, I don't think he said anything particularly whilst we we've just been having that, that conversation on the virus. I think this is all just in fitting with what we've been interpreting from the beginning, is that he hasn't really talked it down in any respect. And so it still remains relatively on a more bullish or hawkish bias. We're right at that point now of the— an area of technical relevance. I'm looking at the cable futures here, so I'm interested to see if we do get another little squeeze on the upside. If we do, probably be looking around that area as an upside target, then beyond that point. And then just using some of this other price action, if you are managing that trade with, I guess, multiple contracts, those highs— let me just get my ellipse— so they move beyond here kind of these lows here and that, that candlestick print on that high, that would be up at 31. So you've got 21, 31 here as key levels. 21, the, the bigger barrier, I would say, to some of the price movement at the moment. Again, as I said, what could be quite interesting is when this GDP data comes out. If we get a weak GDP, given the setup now post-Brexit, post-Bank of England, that could be the ignition then to see us you know, push on. Uh, let's have a look at GDP actually. So this is what I mean by get a soft GDP. I mean, we'll have a look what is soft, but the notion then you get a break higher, perhaps a pullback, and then we start to push on in that respect. But, you know, we're looking at pretty sizable move then of, you know, a point and a half or so if that was to materialize. I don't think that's impossible by any stretch of imagination. Um, well, let's have a look. GDP is coming out. Let's jump back to the calendar. Let's leave Carnie for a moment. So this is the economic calendar. Let me just blow this up a touch so we can see exactly what we have. So Q4 advanced GDP, uh, as per normal, the market is going to react to the first kind of input, that being the headline You know, if you were going to look at the weighting of impact on the initial moves, it definitely is highly geared towards that one singular number, even though there are components to be aware of and secondary data also coming out in the form of the regular jobless claims. Jobless claims, I would say, just brush them aside, uh, it's going to be severely outweighed by this reading. Now, expectations are for a 2.1% reading. Now, what does 2.1% look like? Well, that's 2.1%, exactly the same as what we printed in there in the prior quarter. And if you actually look at 2019 as a whole, obviously we, we rocketed higher right at the beginning of the year to kind of return, if you like, after we had that record-breaking government shutdown at the beginning of— really, this time last year, the economy came surging back, and then we kind of leveled off at around this 2% level, of which today's figure is expected to remain around that, that kind of point. We do though have a pretty, pretty wide range, I would say, as far as GDP estimates go. You've got the most pessimistic bearish, uh, call on the street at 1.7%. Got the most hawkish, or bullish I should say, at optimistic at 3.6%. I mean, a 3.6% reading, that's, that's definitely the best on this graphic. Let's go back on a 10-year, 3.6. I mean, you've got to be going back to 2014, last time we were trading that, or we were, we were performing that well. If we had a number that strong, well, you're going to get a bit of a reversal and a pullback then, uh, in this moving in cable for sure, because the, the dollar strength will outweigh and some of that initial sterling move. Equities Yeah, a bit tricky, you know. Is that a good thing or is it a bad thing? Because the Fed might then need to start, you know, intonating towards potentially more of a tightening talk if the economy is going to be firing in that kind of way. But even then, I don't think they really do too much drastic with, with, uh, policy. So it could be that it's just a clean positive. Obviously, dollar strength, gold would get hit, T-notes would get hit. But this would all be contingent if we get a 3.6% reading. If we get a 1.7, well, let's go back. Where does 1.7 put us just generally on this, on this graphic? Let me just quickly jump back. So 1.7 would be down here, definitely perhaps less surprising. Um, you know, if anything, the FOMC happening yesterday, would they be pre-armed with this number. Well, formal sense, they shouldn't have, but I'm sure that they, they have close monitoring of the economy and they're fully aware. And Powell didn't really make any real exceptions or anything to, to really give too much away of what this number could be. But again, I wouldn't really try to push it one way or the other and think that it's going to be strong or weak. Just play it as you see it. One thing that you can use as a bit of a barometer is something called the Atlanta Fed GDPNow model. And basically it maps a similar methodology as used by the, the Bureau of Economic Analysis and the BLS. And so it mimics then the GDP calculation by the government departments. And what this is saying is that actually the anticipation going on on the basis of recent economic data from the Census Bureau is that this number could be 1.7%, which would definitely be a downside bias towards the expectation of 1.2.1 and the range low of 1.7. So yeah, that, that's the deal, I think. So in your mind's eye, I'd say anything around 2, 2.1, 2.2, you're going to get a little flicker of price activity, but I wouldn't really be looking for too much expectations away from a trade. The one thing I guess that, you know, let's, let's just move away from cable for one moment. If you were looking at other assets, and I'll have Sam jump on as well shortly, but if you get a lowball number, and what I mean by lowball, you've got to break the lower bound of the range, get something down at the kind of low 1% numbers, then Certainly T-notes could break the upside of that range, and that R1— let's just have a look, any potential targets beyond that point. I mean, you've got to go back a fair distance, really. I mean, let's have a look on the dailies where we're at just generally with the price movement at the moment. So yeah, probably up and around 23.5, the bigger prevailing move up here. But yeah, you've got to see a pretty weak number in order to get that type of price, price movement. But certainly, yeah, 1.1, 1.2 type reading, then certainly you'd be looking for, for the 10-year to get fired up a little. Equally, gold, probably similar. Again, going on the premise of a low number you just want to be looking at potentially a bit of a pullback— or, sorry, an acceleration on the upside. Just looking here as gold just edging a little lower. Again, the targets would be the R1. You've got those highs that were printed earlier in the session, which comes up towards the highs that we had in the, the prior day's session. Any strong number, if we get that 3+ type number situation, uh, then, then certainly gold will come under a little bit of pressure. You've got the low point that we've seen initially at the entrance of European markets this morning in gold. So just looking at this here, that's what I'm talking about there. But you've also got that low point of the, the initial range that we were seeing post the pop that we had in the reopening of trade for this week on the, the coronavirus Anything pushed below there then starts to bring in some of that price activity from the movement we saw in the volatility in yesterday's session, and then back down towards the kind of top end of that area of consolidation that we had in yesterday's session, which coincides with around the pivot. So in that type of scenario, that would be the, the kind of levels I would, I would keep an eye on. But again, it really depends on on the outcome of the number. So as I always say, kind of plan accordingly on both sides. Okay, got a couple minutes. Carney's still going. Let's have a quick check back on the pound. Yeah, a bit of a snooze fest, quite frankly, after the initial, initial drama I always feel doing the job that I do that I need to apologize whenever it's not, uh, super volatile. So I, I apologize on behalf of the Bank of England and Mark Carney for being too good at their job, unfortunately. But hey, GDP's coming out. Let's see, let's see how that goes down. You've got about 5 minutes. Thanks. Jack Dutton, The National. So, Governor, my question is, um, on your announcement last month about climate change stress tests. And you've obviously asked for industry feedback. I was wondering what the feedback has been like so far and what you want to achieve with these stress tests. What kind of impact do you want, given your next role is going to be to do with climate change at the UN? Okay.

Well, in terms of— I mean, the feedback is ongoing. I would say in general the banks and major banks, major insurers in the UK who are going to be part of these stress tests are very engaged with the issue. And I think it's important to emphasize that these are not sort of gotcha stress tests. They're not stress tests that lead to a change in the capital ratios of the banks or the risk-weighted assets of the institutions, but they're really stress tests about the strategy of these institutions.

Okay, that's— they're talking climate change, so I'm turning it off. So I don't mean that to be offensive, but it's not going to be market-moving in the intraday, so I'm turning him off. All right, well, I'll put the squawk on. We got the GDP coming out in about 3 minutes, so all eyes on that now. I was just having a quick look at the S&P, marking up a couple levels, potential interest on both the up and downside. Quite interesting to look in context really of the week and where we had that gap down, the initial push down, sell-off on Monday, and then there were quite firm recovery as it, you know, the, the escalation if you like, probably not as wicked as some were fearing. With coronavirus. We've had some positive earnings, don't forget, as well from the US. That's going to be another consideration for the open. Although Facebook a disappointment, obviously Microsoft, Tesla were all particularly, particularly strong. So obviously Microsoft, one of the largest companies as well in the S&P and NASDAQ. But this GDP now is the focus. Got about 2 and a half minutes. Yeah, Raul, what a week. Earnings, Fed, Bank of England, virus. Yeah, January has been a— been quite a, quite a good week or good month. For a macro perspective. I mean, Iran, the US-China trade deal, the virus now, earnings season. Yeah, definitely plenty to get your teeth into. What is quite interesting, and I know I've mentioned this a couple times in the briefings, is that idea that it's just funny how though the markets tend to latch on to one dominant theme at a time. And you know, things like Iran seems like ancient history now. You never hear about it because obviously everyone's getting force-fed this coronavirus. It's just interesting how the news cycle works and how human behavior kind of responds to that. Okay, the Squawk should be covering the GDP then. I'll hand over to them. You'll hear the, the announcement coming out shortly.

we get this US GDP data advance data Q4 headline seen coming in at 2.1%. We'll then have a look at core PCE forecast coming at 1.7%. The sales advance metrics seen coming in at 2.1%, deflator seen at 1.8%, prices advancing at 1.7%. Initial jobless claims forecast to come in at 215,000 from 211,000. Continuing claims forecast to come in at 1.733 million. So we'll start off with the headline for the GDP Then we'll have a look at the core PCE and then the following metrics. 10 seconds. 2.1% in line. Core PCE 1.3%, that misses the forecast 1.7%. PCE 1.6 misses the 1.7 forecast. Sales 3.2%, topping the 2.1% expected. Consumer spending advance 1.8%, coming back from the prior 3.2%. Deflator 1.5%, missing the 1.8% forecast. Claims 216,000, we had expected 215,000, prior revised up to 223,000. Continuing claims 1.703 million, Street was looking for 1.733 million. Very limited reaction thus far in security prices. Quick recap of that data. Headline comes in at 2.1%, and that is in line with the forecast looking for 2.1% and the prior 2.1%. The sales advance metric at 3.2%, the Street was looking for 2.1%, so it does top expectations. Consumer spending at 1.8%, that pares back from the prior 3.2%. The deflator 1.5%, the Street was looking for 1.8% there against the prior 1.7%. Prices advance— core PCE prices comes in at 1.3 as against the expected 1.7, so that is a miss. And the prior was 2.1, so it falls to 1.3 from 2.1, quarter on quarter of course. And looking at the PCE prices, that comes at 1.6 against 1.7 expected. Claims more or less in line at 216,000, Street Wall Street looking for 215, but the prior upwardly revised to 223 from 211. And finally, continuing claims 1.703 million. The Street was expecting 1.733 million.

Okay, so let me, let me just turn them down for a moment. So yeah, I mean, the reaction tells it all really, uh, in line. So 2.1% was the headline reading, completely in line with expectations. Uh, the one, one slight thing that perhaps is a little bit interesting is the core PCE prices is quite a bit weaker But remember, I would say Powell kind of already intonated toward the fact that they weren't particularly happy about how they've been targeting inflation and dealing with it. So perhaps that takes a little bit of the sting out of the fact that that's a little bit weak, because there could be a, a case for saying that on the balance, so the GDP is in line, perhaps slightly on the overall data is a little bit weak, but I'd say As I said, I don't think it's— I wouldn't want to read too much into it. Basically, this is pretty a flat release, and I don't think this really has much consequence for dictating proceedings for the rest of the US session, is my initial interpretation. If anything, I would say, you know, from equity's perspective, I'm quite interested now, you know, is this that kind of situation where it's a bit Goldilocks type, where you've kind of got consistent growth then, tracking at just over 2%. The Fed are going to remain relatively passive in what they're doing, and so therefore for equities, as you saw with some of these big companies and their earnings, it's, you know, it just continues, if you like. So I'll be interested to see if equities can now get a bit of a head of steam. Interestingly, gold having a bit of a breakdown. Just, let's just make that chart bit bigger. So we have just seen a bit of an acceleration on the downside, down toward the, the first kind of near-term target. Then we're testing it now in the futures at that around 1582, 81.7. You can see is that low and those corresponding high and lows that we had on Friday and Monday. So let's just see how it reacts here. And as you can see there, any fast money moves here just booking the profits on those shorts. If it starts to get a little bit more heavy on a break of here, um, we may be looking at some of these price levels perhaps, uh, where the price, when it was gradually moving higher, uh, in— this would have been the Asian Pacific session. But I'd say this is a good level here. It's kind of make or break. Either holds, uh, and we start to see a bit of consolidation here until we get really the cash equity open, or if we can get a break here, it wouldn't be too surprising to see another $1.50 or so run down the downside. So it needs to be monitored. Contingent on that, from a correlations point of view, I'd want to see equities get a little bit more bullish. That is starting to materialize a touch. Uh, the S&P's just had a, uh, it's just livened up a little bit, come backing up, or back up to around the top end of that range of the the kind of the session thus far. That's kind of the late Asia-Pacific high and then the European morning high. We're just having a test of that at the moment. All right, with that being said, I'm gonna wrap up the YouTube coverage, so I'm gonna go back to trading live. So just want to say thanks very much for everyone for joining us in on the YouTube session. So Razor, Mojo, Vern, see you guys again. Anyone who is watching this on YouTube and you are not currently subscribed to the channel, just a reminder, hit that subscribe button. Plenty more live events coming in future. All right, thanks very much guys. Back to trading live for everyone else. I'll see you in the, in the chat room.