LIVE FOMC - 29th January 2020

All right, let's kick things off then from the top. So yeah, apologies for that, thanks for the heads up. Let's, let's begin. So I'm gonna have about 15-minute conversation. I'm gonna go through and give you a bit of an update of how we at Amplified Trading would go about as macro traders tackling this type of news-driven event. I'm going to go through and just kind of break down, you know, monetary policy in general is fairly complicated, but I think trying to break it down into very small, definable, actionable parts is the only way you can really tackle this type of event. So I'm going to do my best to try and achieve that over the next 15-20 minutes. I'll then hand you over to Sam. Sam North is one of our senior traders. He also looks after some of the guys here in terms of their development and risk managing them. And he definitely looks at the market from a, from a technical perspective. So he can add some, uh, a look at charts and general setups that he's looking at, and, and that will complement then my fundamentals, hopefully, is the goal. So two-part event. We're gonna have to wait for the announcements coming up in— let me just move my window slightly so I can just keep an eye on, on things here. So we've got about 27 minutes, and then we'll have the press conference a half an hour after the main event. So what are we looking out for? First off, this is a, a good graphic that I always like to look at ahead of time, and this is basically Goldman Sachs. Their analysts put out what would be a mock FOMC statement. So taking this right from the top, What does a— what does an FOMC statement look like? Well, one of the things here is that if you're not used to watching monetary policy events, language changes from a central bank are very cautious. They're very well telegraphed. Central bankers are highly in tune with the fact that markets are very sensitive to changes in their forward guidance. And what that basically means is as language changes, as they describe their perception of the current economic environment and start to explain about what they might do in the future, they know full well that people like us who are influencing the value of these assets that we're trading are hanging on every single word that they say, and that could potentially then by default be market, market moving. So that comes down then to this. This is the statement. If you've never looked at one of these before, it's a fairly generic kind of statement in a way, in, in terms of the, uh, the structure of it. So you have a top kind of section where they talk about economic activity, they talk about the jobs market, and they talk about inflation. So that's one of the key paragraphs. The second one is then kind of validating the actual rate, if any change. And then the kind of sentence structure around what the judgment was that led to then the policy decision that they've taken. And then there's kind of some added detail as well on the point of inflation and other economic indicators. It's always very, very formulaic in this sense. And as I said, it's a very nuanced thing trying to trade then a policy statement. You're looking for very subtle changes. And that's it. Now here, what Goldman's do is they basically— this is their proposed expectation of what they think this statement is going to look like, and they've basically scratched out what would be then the removal and the new addition of a word. So here, basically, the month's changed, that's, that's absolutely nothing. So here, although household spending has been rising at a solid, strong, solid pace, so basically just dropping the word strong. But overall, that's not going to have any real implications for what markets are expecting for the Fed going forward. So overall, main point here, we're not expecting much in the way of a statement change, and that's the first kind of batch of headlines that we get with the main interest rate decision. Now, a couple of things then that can be quite important to monitor. This is the first meeting, of course, of 2020. And every year, basically, the, the construction of the Federal Open Market Committee, the FOMC, the people responsible for making these Fed decisions, they have either a Board of Governors, which would be comprised of people like Jerome Powell, who you know is the chair, the vice chair Clarida, but then you have board members here that you can see, but then you have a rotation of other reserve district presidents. And going into every calendar year, you see a subtle change then for the people who are able to place a vote at every one of the 8 Fed meetings. So as you can see here in 2020, you've got the addition now of Kashkari from Minneapolis, who is the most dovish in terms of his view on monetary policy. The uber opposite of him would be Hawker and Mester, who sit way more on the hawkish scale. And you can see year by year this tends to fluctuate. Now overall, what did 2019 look like? Well, the actual removal and additions, if you like, of people and rotating on these 12-year format or 12-month periods has been net-net very little change overall. I wouldn't say it's going to make a big impact on to -based decision. However, what have these guys been saying? And so this is really broken this up into two parts. Part one is, you know, how do we base our expectations of what it is that they might say? Well, we've got to look at what have they said in the build-up to this event. Now obviously it's January 29th, but you can see here the last comments here were made on the 15th. Last comment by Harker. Now, why the 15th? Well, if you, if you're unfamiliar with the, the process, there's a blackout period, which is a period of a week ahead of the announcement where no Fed official is allowed to publicly speak. Now, a lot of that is to counteract any type of leaks or rumors coming into the market. So here then, what were they saying? Well, Harker— go back one slide here— Harker is the most hawkish of the FOMC voting members. And Harker last said, quote, I don't think we need to move rates in either direction. So if you were looking for someone who potentially could dissent from the pack, for example, these outlying members, your most hawkish person has said actually, you know, even despite things like at that point, what, Jan 15th, we're going into the signing of a Phase 1 trade deal and so on. Obviously this was pre-coronavirus, uh, and so here, stand pat, don't move rates, is what they're basically saying. And if that is at the extremity of a policy view, then you would think then as a group they're probably going to be of a similar disposition, i.e., holding rates. That was about, um, officials largely agreeing that policy rate is firmly on hold. So from the rhetoric from the central bank, the forward guidance, which allows us as market participants to base our expectations on what could happen today, they're basically saying there's no need to move right now. Uh, the other thing that they've said here, this is looking at some other comments, that despite better trade news— remember, we have locked in now a Phase 1 trade deal— Fed officials do remain worried about global developments. And as I said, this predates remember the blackout period, we weren't really looking at the virus outbreak that we've had in China. Here, most people then, the other bigger perceived risks to markets after what I feel from my view is that the market restores stability rationale once this virus— I think we start to move back to then the trade story and so on— is overall the trade dialogue between the US and China, but also the implications of the tensions with Iran and the Middle East, which still are key risks for the market. This is what Fed interest rates look like at the moment. Very familiar, of course, basically zero interest rate policy adopted through the recovery of the financial crisis. And then you've got this incremental rate rise of multiple rises from December 2015 all the way up to the peak that we got at 2.5% in the federal funds rate. 2019, obviously escalation of the trade war at the time, even though the stock market, okay, had episodes of pulling back, was hitting all-time highs. A lot of this was based on the monetary policy response of cutting rates in order to counteract a global slowdown that was kind of manifesting itself on the, on the trade talks. So that's where we are in context of where we've been. Now, what is the implied probability of, uh, of what action they're going to take tonight? Well, if we look at the short end of the interest rate spectrum, uh, in federal funds rate futures, the implied probability of a hold in interest rates tonight is 85%. And actually, if anything, there's a 15% probability they might hike rates. If they hiked rates tonight, uh, this goes from a non-event to a really explosive event. The idea here being that that's not going to happen. Obviously there's a very small probability if it does. If it does, the dollar is going to rocket through the roof, uh, and yields are gonna spike. The T-note will get slammed, gold's gonna get hit, would be the type of move. But again, you can think about these as very outside-lying strategic things that you might do in that what-if scenario, but I wouldn't be dwelling on that as a base case scenario. A couple of other key points, and then I'll hand you over to Sam, that I thought are worth mentioning. This is one that you might have heard about or read about quite a few times, this thing called the interest rate on excess reserves, otherwise shortened to the IOER. Now, what is that? The IOER is the interest rate paid to banks for the deposits they hold with the Federal Reserve above those required by banking regulation. Some analysts have been talking about the potential for the Fed to lift this by basically 5 basis points to help keep the benchmark federal funds within range. Um, what do people think of this? Well, a move up would guide the IOER back toward the center range after officials tweaked it lower as part of what they were doing when they, when they needed to at the time during the financial recovery. The point being here, to underline this without going into it in too much detail, as HSBC have said this morning in a research note, a likely 5 basis point technical increase in this rate to nudge the Fed funds rate to the middle of its target range should cause no reaction. I just want to make clear then that this is more of a technical adjustment of the mechanics of the, the kind of implementation or transmission of monetary policy into the system. It's not an outright policy type of thing that we'd be looking at that means that they're doing QE or they're cutting the actual Fed funds rate. Goldman Sachs, just as, you know, most banks are thinking they're going to do this technical adjustment. Again, we're not expecting that to have an impact on markets, but Goldman's do think they're going to do that. That, but they're likely to more to wait for a month or even later in order to action that. A few other things, um, growth. This is one thing I just quickly wanted to mention. Obviously we've got some GDP numbers, the advanced reading coming out this week, which is going to be particularly interesting in terms of where growth is at the moment. I just wanted to show this, which is the Atlanta Fed GDP model, which kind of tracks and updates then where GDP is at at this moment in time. And you can see from where we were in November to where we are now, even though now we're slightly off the peak, there's certainly a decent recovery and upside surprises that we were seeing over the course of the last several weeks in generally US economic data that has kind of lifted the idea then that actually now the trade deal is done, has that eliminated a lot of the biggest near-term risks at least for the moment, for the market. This is another thing that you need to look out for, for tonight, and this is probably the one singular more market-moving thing that could occur. And this is about the Fed's balance sheet. So what I'm showing you here on the chart is the total assets at the Federal Reserve. Now, this— to just explain what we're looking at here, you've got the timeline on the bottom: 2016, '17, 2018, 2019, and the current day. And then you've got US dollars in trillions, right? So prior to the advent of quantitative easing and the 3 rounds the Fed executed post-financial crisis, the Fed's balance sheet went from roughly $800 billion to $4.5 trillion. Now what we've had in a commencement from really late 2017 is the Fed began unwinding its balance sheet. So instead of QE, QT. Quantitative tightening. Now, this was all coming as generally, you know, remember the Fed were hiking rates because the economy was performing. But what had happened is getting down into 2019, trade war escalation, other external risks, global growth slowing, inversion of the yield curve— you'll remember not that long ago— meant that then we've had a bit of a funding squeeze in the repo market in America. And the Fed have had to step in and start buying Treasury bills— bills being short-dated maturity bonds, if you like— from the central bank at a pace of $60 billion a month in order to, to mitigate any liquidity issues. And so what that's meant is their balance sheet shot back up. Now, what could be market-moving in this meeting is this: any clearer signals of an intent to taper, i.e., stop the expansion of the balance sheet, could have an adverse impact on risk appetite and boost the dollar. Yeah, so basically boosting the, the balance sheet is a form generally of, of what would be indicative of more dovish measures supporting the economy. Taper would mean killing that off, then could see quite a strong reaction in markets. I don't think Powell's going to say anything near that explicit, but if he did, it would be important. Final things, he's going to have a press conference. This is the second part of the event. I'm going to recap this before it begins, but a quick look at it. Deutsche Bank have done an excellent checklist. The outlook for policy rate forward guidance, persistently low inflation and how it relates to the policy review. Remember, central banks even in Europe, we're under Christine Lagarde. She's doing a quite a monumental thing, which is a complete review of monetary policy reform at the central bank because the fact that inflation has remained persistently low. And is that now, uh, something we need to monitor when it comes to Powell when he's questioned on it? Funding markets and whether the T-bill purchases are in fact quantitative easing. This is exactly what I was just talking about with the balance sheet. Then financial stability risks, uh, coronavirus the trade war, so on and so forth. Implications then for the global market. The wild card here, according to Deutsche, and I do agree, however I think the likelihood of probability of him saying something explicit is minimal, the wild card is Powell discusses the coronavirus outbreak and how the Fed may approach any possible economy slowdown that results. Now for me, we're way too early in the development of this virus to have any type of foresight as to its economic implications so far. So I think Powell's going to swerve this question, although it's going to be one of the first ones that he's going to be— he's going to have to tackle. All right, I'm going to leave it at that, and I'm going to let Sam come on and have a quick look at the charts, and then I'll jump back on when the release comes out. But hopefully that was useful. I'm going to be in the chat now if you've got any questions, and then I'll be on to cover the event as it happens.

Okay, hi guys, happy first FOMC rate decision of the decade! Are you all excited as I am? We'll have a quick look over some of the charts, uh, we're gonna bring in the S&P, although you know, with these decisions, this would always be the, the last one I really look to trade unless, uh, you know, they were to completely shock the markets. Uh, that low that we made, uh, on Monday seems a distant memory away now. Up, well, literally to the tick now, 50 points. If we were to go another 50 points, we're almost at all-time highs. So pretty, uh, pretty key level you can see traded here. So I would be keeping an eye on this if they're was that coronavirus talk and they would take some sort of action from there. You can imagine this high, i.e., Friday's close, the gap fill that we had early hours today, the couple times we tested it, it's a key level. So a break above there, certainly from a technical point of view, you can imagine there would be people looking to get long, uh, on that. So, uh, we'll, we'll see what happens, uh, around there. Break above there, you've got the 3300 handle, which is also a low that we had back on the 21st. Third, just above the R1. So there's quite a few key levels that I would absolutely have marked up just on the off chance we were to see something, uh, come through, um, however unlikely that may be. Uh, to the downside, you can see a bit of decent price action this morning where we actually opened, uh, last night, 11 PM on the futures. That was a really good base for some support earlier on. That's still acting as a decent enough level. Pivot came down, tested, uh, after cash open. That was a good area people looked to have got in. So, you know, along with some of those highs from yesterday, these would all be levels that I'd have marked up just in case there was anything significant that was to come out. So to the downside, obviously, if they were to be ultimately a bit more hawkish. But you may, you may have, you know, certainly over the last couple of days, you may have some dovish bets potentially priced in here on the off chance that due to the, you know, the coronavirus, the Fed might turn dovish. So if it was completely in line, it wouldn't be the most surprising thing in the world to see us just drift lower. A break of this potential trend line and that pivot, then you could be looking to target around 3262. I don't think that's out of the question, uh, but like I said, not expecting too much. Quick look over at Gold, which has been incredibly choppy today as expected ahead of an FOMC decision. The euro-dollar, the same kind of picture in up-down price action and quite unusual— uh, quite usual, I would say, sorry, before a decision like this. You can see here very little going on in, in the way of a clear trend. However, just going to put this on the 240 and This is— there's a trend line that I would look to have on, on here, which has been quite well respected. Hit it. And now drop it down to the 60-minute. You can see, hit it in the early hours of this morning. So if we were to see a hawkish release and that trend line goes, then you could get a bigger move to the upside. The area that I'd want to, to break for me to be real confident about further long would be 1582. Reason for that You can see after we pushed higher on Monday, uh, on Sunday evening, Monday, 1, 2, 3, 4 real big tests of support, then a really nice test of resistance. So line in the sand where the sellers would want to take over. Above there, you know, can we get a, you know, a dovish reaction and a continuation through to maybe test some of these trends that also, uh, those highs from those trends as well. But again, not expecting too much from that. 5-minute trend line, you can see, worth perhaps having on for a shorter move. Little break of that to target some of the lows from the early hours of the European trade. 1572 is somewhere I'd have marked up. But that price action we've just seen here, it is now in the EUR/USD on a 60-minute. It's, uh, it's pretty ugly. A couple of spikes, a couple of breaks of lows where you think it could go down, and really it's just stuck in the middle of that range. It is quite an important area, you would say, for the euro. Certainly how we finished yesterday was promising for, for the bulls, and let's just mark that up. Whether we can finish above, above or below there will, will certainly gather some sort of interest in a bit of a trend channel as well. So where we close the day, uh, will be worth keeping an eye as well, uh, on that, uh, going forward. The Dixie at some interesting levels as well for those that do follow the dollar index. But certainly for the, you know, this, this with the release, I'm not expecting fireworks, uh, at all. But that level on the euro, I would say, is pretty key to the upside where you could get more confident about a further move higher. You can see this low that we broke down in early trade was also almost, uh, the, the high on the break, uh, of the, the S1 today as well. But we're getting squeezed from both directions. Chances are on the, uh, announcement we're gonna break out of this nice little charting pattern here either way. And you can target, i.e., to the top side, that area there, and then to the bottom. But it's not big, it's not going to be a big move, uh, you would suggest from the way it's talked up. And, uh, here, just going to bring in T-notes, US 10-year government bond. The price of that. Similar to gold, and it gapped higher, it didn't quite fill the gap. So that's somewhere if we were to have that hawkish release, just be aware of it. Certainly if you're trading futures here, you can see that could act as a level of support, much like the S&P did as a level of resistance. So just be aware of that on the 60-minute. Uh, we almost reached it in early hours, uh, trading this morning. So if we do get a bit of a hawkish reaction, definitely have that marked up. I take profit no matter what on there, to be honest. To the upside, that dovish reaction, R1 is key because of this push we had lower yesterday. Just going to bring that in a bit, uh, clearer here. Nice level support, sellers really taking over. Also on that mathematical level of the pivot, so almost worth calling that a bit of a range that it could be in, uh, there as well. So Let me know if there's any questions or any charts that you want to, to go over. Let's have a quick look here now at any of those to see if there is any other charts you want, want to have a look at. But those will be the ones to focus on: euro-dollar, gold, T-notes, and then also with, with equities as well, the S&P 500. Comment from Goris: there's a low rate environment in QE, reduced volatility in the currency markets. These moves in currency market very small and range-bound. It's hard to make money out here. Well, look, I mean, with the, with the FX space, volatility is, is certainly, uh, at, uh, record lows. And this is bringing that euro— it's a, it's a frustrating market for, for those that want to see decent price action as such. This doesn't remove everything off here, uh, and this is, you know, if— and I'm actually going to bring in here the weekly level before we, we go down to the daily. And this is why, from a trading point of view, what I would love to see today is a bit of hawkishness just for the break of these trends lower down. And then I think, you know what, it's not going to be quiet no more, and a break of that could lead to a a further push down. We're stuck in this trend channel at the moment, so that'd be something where I'd be looking for, you know, a cleaner break. But here, going back to 2017, let me just make sure you can see that. Uh, this would be, you know, I feel with FX at the moment, it's just waiting. It's waiting for a big push for levels to come through. A couple of shouts for Bitcoin. I would love to give you, uh, some honest analysis on Bitcoin, but the truth is I'm not clued up enough to, to, to give you a view on that. Looking at the Dow, well, same, same as the, the S&P really. You can see decent, uh, move higher over the last couple of days. This trend line is one that I had on. I actually had orders waiting to buy that pivot this afternoon, didn't quite get in unfortunately. Anthony Cheung would be nice now, obviously would have unwound, but that's a key level for me. Support from earlier, this potential trend line was in the mix there as well, the pivot. Let's have that on, and, uh, this trend line, just adjust it perhaps for later in the, in the week, in the, in the session, I should say. The gap actually hasn't been quite filled on the Dow, so just be aware of that. If we do get a dovish reaction, likelihood is you are going to see see a bit of selling come in there, very similar to what we saw with the S&P in early trade. Just here, we're bringing in that gap fill. There's your low, there's it filled, and the sellers love it. The sellers love it. We've got just over a minute, so I'll let Anthony Cheung come back on. But any, any questions, please put them into the chat as well.

Cool, thanks, Sam. So yeah, let's, let's just focus in now. I got about 90 seconds till the, the announcement, so I'm going to put the squawk on. For any of those not familiar with the squawk, I mean, it's pretty much impossible really to, to not have one and tackle these types of events. A squawk being, as you'll hear, analysts that we have who monitor all the major financial newswires and will break the news as it happens. So they're going to call the news out. I'll keep my mic open. You'll hear them talking. I'll hand it over to them. So I'll come off the mic now. We'll listen in.

10 seconds. Unchanged. IOER hikes to 1.6% from 1.55%. Unchanged for the federal funds rate. IOER hike of 5 basis points to 1.6%. Fed keeps target rate unchanged. IOER hikes. Repeats, will continue to buy Treasury bills at least into Q2. Said to continue conducting term and overnight ops through until April. We'll conduct overnight reverse repos at an offering of 1.5%. Repeat, job gains solid, inflation still below target, household spending rising at a moderate pace, business fixing, investment, and exports remains weak. We'll continue to monitor incoming data, including global developments and muted inflation pressures, judge its current stance on policy as appropriate. To support economic expansion, strong labor market, and inflation returning to its symmetric 2% objective. Unanimous decision. Yes, and just note that household, um, has been downgraded there to moderate. Remember, we flagged that potential downgrade. It was previously strong pace. It's a little bit bigger of a downgrade than we were thinking. However, not much reaction going on at the moment. So just to recap on these headline rates, unchanged, but that IOER hiked by 5 basis points to 1.6% as some had expected. It will continue to buy Treasuries at least into Q2. It will conduct term and overnight repo ops at least through April. It will conduct overnight repos at an offering rate of 1.5%. And just like those, uh, reverse repos, that was produced at 1.45%, and as we mentioned, that's been lifted in line with the IOER hike as well. Repeats, job gains solid, and that categorization is unchanged there. Inflation still running below target, that categorization is unchanged. Household spending has been rising at a moderate pace. Now, as we flagged up a few seconds ago, previously it did judge that to be at a strong pace. Some thought it would be downgraded to a solid pace, but at moderate it seems to be a bigger downgrade on that front. Business fixed investment and exports remain weak, that's an unchanged assessment. Repeats will continue to monitor incoming—

just going to turn them off for a second. Um, really, you can see, uh, yeah, without me even going into explaining this, how much the market has just taken it in its stride. There's nothing here that jumps out on, on first glance that would be particularly unusual. Um, just having a look here at the statement This is the statement. So you can see the changes here, of which there are a few, but they're absolutely minimal. So this is, this is the type of situation where, you know, as a macro trader, you spend a lot of time preparing. You have a base case scenario. You have kind of bullish, more optimistic or hawkish scenarios and what you would do as a course of action. You have dovish plans. So you go into these events as a, with a strategy of multiple different ways you would execute depending on different outcomes. But, you know, this is the reality. The reality is it's exactly as, you know, most expected, which is it's a non-event, and therefore it's not really a trading, a tradable event. And, you know, this is where you've got to understand that, you know, with these events, it's— you've got to kind of have your finger on the trigger and a real plan to execute and what you would do. But if that doesn't materialize, then it's to discipline and not to be chasing markets or thinking, you know, I've waited for this event all day, I've got to jump in, I've got to maximize this opportunity when there really isn't one. Now that's not to say that something might not develop and we start to see a trend form over the course of the evening. Perhaps an opportunity might arise, but The initial first glance is here, there's not too much, but there's a press conference to come. And, you know, this first part was always going to be a bit of a dull affair, and so the press conference really is the more interesting one because that's where he's going to be questioned on a lot of these key things. A few of the other comments that he did make, or the Fed have made, sorry, was about the, the, uh, they've lifted the OIR, but that's a technical adjustment which which we were very much expecting. They extended the repo operations at least through April. They had already talked about Q2 before, so again, it's all in fitting with expectations there. So just having a look, equities just seeing a, a very ever so slight uptick, and I guess that is a little bit interesting from a technical perspective. I mean, I'll get Sam to jump on in a moment, but if you look at where the S&P is trading at the moment, we're right at the top end of that range. Which has been holding a lot of the price action over the course of the Asia-Pacific and European session so far today. And, you know, let me just mark this up to give it a bit of context on the chart. This was the gap down on the, on the virus, which is what we're looking at here, and then the recovery of where we had. So if you actually look at the markets and the, you know, Monday, Monday session from the gap down to the the low, which was basically this area here, that was the biggest down move that we've had in the S&P in about 6 months. And if you actually look where we are at the moment, where we're trading, we're exactly where we closed on Friday. It's almost like the virus didn't exist as far as the, the equity pricing is concerned at the moment. So yeah, keep an eye on that. Perhaps then if we can see a simultaneous break across a couple of the other indices, then perhaps this gets a little bit more interesting. The DAX as well at the level of, of resistance at the moment. Let's just have a look at the Dow where we're trading there. Uh, pretty similar setup. You've got the R1 and the daily high to break through that we saw briefly around just before the open before we dropped down to pivot. So if that S&P is really going to get its legs on and start to bounce or move higher, really got to see the NASDAQ break the, uh, the, that range high through the early part of the, uh, before US came in and thereafter. Currency markets pretty non-event, uneventful. Oil, no real movement, largely borne out of the fact that the currencies haven't fluctuated. Oil tends to move as a secondary, uh, product, if you like, as a domino effect rather than than explicit in this type of reaction. Guys to the side of me, anything you want to add? Yeah, okay. So, well, look, the press conference is coming up in half an hour. Any questions though at this point in time that we can answer, let me know. Sam is here as well. Alex is here. You might have seen a guy called Alex Clark in the chat. So Alex is part of part of Team Amplify, so hence the reason why he's been just helping out and just putting a few comments and answering a few questions in the chat. But yeah, let us know if there's any questions. Sam, do you want to come on? Yeah, Sam's got a few things he wants to comment on. I'll hand you over to him.

Yes, it's interesting. Keeping an eye on the S&P and US stocks and stocks in general. Uh, it's quiet, but if we can get that 15-minute close above these highs of the day, you gotta, you gotta favor a push to the upside. I know we've got the press conference in 23 minutes and absolutely be careful, but if we can confirm a break above this, this level, and for me that 15-minute candle closing really at the top of that circle will give me a bit more, uh, belief that we're going to— that could be a sign that the bulls have won, bears are about to give up, and, and we can push on. However, you know, there's 7 minutes to go, anything can happen there. It could well be exactly what happened, uh, what time is this, 11:45 to 1:30, where we spike and come back lower. Not the highest volume, not much expected, so I want extra confirmation to to get long. That 15-minute close would, would help that. You can see here the NASDAQ just hitting that high, and it's the same for me as well. If we can close 15-minute above that high, the S&P above that gap, and then the— let me bring in the Dow, Dow Jones as well. You know, you'd want, you want something similar. Uh, so yeah, let's, let's wait and see. Let's wait and see where we close. I mean, if you like a reversal, you know, if we were to, you know, close below that 3290, why can't we drift back lower? But, uh, you can see here just that advantage of just being patient. Uh, the 5-minute close, you can see, would have made you want to get into this market. And fine, in more— in higher volume periods, the 5-minute close is okay. I just think, just given how quiet it is I just want a bit more confirmation before, before getting in on that. Euro, I mean, spiked, spiked lower, back to really where it was before. It'll be interesting to see, you know, what Alex has to say because I know he looks at the dollar index a bit more and he's, he's got a couple of, you know, views on, on the euro, certainly, uh, more mid— well, short and medium term about where we perhaps finish this day. So it'd be be good to get him on, uh, shortly. But just back to that S&P here, you can see, you know, if we're looking at that 15-minute close, you've got 5 minutes from now. Where do we, where do we get that confirmation? Now that's, that's what I'm waiting for. Gold got a bit jumpy, got a bit jumpy, but you can see now that's, uh, well, let me just clear off the— so I want that trend on. Let me just clear this line. You can see we're just coming to the top end of that trend line from earlier yesterday to this morning. If we can close above there, then this market, you know, could perhaps hit that— oh, sorry, this is the pound. I'm bringing— sorry, gold. Um, you can see we're just coming to the top part of that pivot. So while we test this a lot earlier, it got very choppy. So unless we can, you know, confirm again, a 15-minute break above there. I wouldn't really want to be too interested in, in getting in. 5 minutes until that, uh, 15-minute candle close. S&P currently below there. Earlier you would have seen in the chat I posted a copy of that statement that you can click on there on Twitter and a couple of comments that come through. Um, so do, do click on that. Ian, good question. Uh, would DAX follow? Well, let's just have a quick look at the DAX. The reaction is, is similar, albeit a lot smaller. Uh, so that high that we had from this morning, I'd be looking for something very similar, that 15-minute candle close above. And while I wouldn't necessarily be a fan of trading the DAX at 7:15 in the evening, the opportunity for a little push towards that R1 or some of those highs we saw on Monday 8:30 could be the opportunity. But certainly, just how quiet it is, I want as much confirmation as possible to consider taking this trade on. Yeah, Euro cable and gold are up, but slightly, but slightly, you know. And the S&P doing the same. If we look at the, you know, the, the last sort of 5-10 minutes, yeah, they're up all, you know, signaling a slightly, slightly dovish release. But really, it's a nothing, isn't it? We know. Let's have a quick look at that, uh, that's the S&P. We'll come back to that, uh, shortly. Uh, Alex the Alex, do you want to have a pop on? So just gonna— I know if you've, if you've watched the briefing, you would have seen Alex before, but, uh, I'll get him, him on now. Um, I'm just gonna open up TradingView, uh, for Alex here. I'm just going to bring this into picture. But same as, as before, guys, any questions you have, just post them into the chat. Let me just transition my screen one moment.

Hi everyone. Cheers, Sam.

No worries.

Oh yeah, I've got to make sure that I'm in the right place.

Come over a tiny bit more. There we go.

Evening guys and girls. Where are we on this Euro? I seem to see set this chart up. Quite interestingly, let's start off actually on the dollar index just briefly. And, um, we highlighted a couple of weeks ago this really interesting trendline support here. Uh, this is a weekly time frame. It's a big time frame, I know, but we'll whittle it down. Uh, we've got this quite bullish chart pattern here on the dollar index and this bullish hammer, which was the inflection point and the low before we moved up through this, uh, this bullish trend line. And if I— I'm just going to use a stochastic oscillator here, which just helps us sort of identify overbought and oversold conditions. I don't use it on— I said there was someone in the chat talking about that earlier. I don't use it on its own. I like to line it up with other technical tools. And this is the thing, is The balance sheet, we were talking about the balance sheet earlier. Anyone that wants to go back and look at the balance sheet, the balance sheet trough was in September of 2019, and that was the high point in September 2019 of the dollar index. And then they've loosened the balance sheet a bit, and it's perfectly correlated to the dollar index. And so keeping a close, keeping a really close eye on that. But at the moment, this, uh, this this technical setup is looking really bullish, and the next stop should be around this sort of— around the highs here. If we zoom in, uh, these highs here around 98.50 on the dollar index, and then above that you've got up towards the 2019 highs. Now, wouldn't expect to get there straight away, and if looking at this stochastic, right, and I think this is why we're seeing some of the reaction that we're seeing is we're so wildly overbought on this stochastic. We've been overbought since like 2 weeks, and it's just been— you can see here, we break above the trend line, we get a bit of a classic, we've got the, we've got the longs, and now, and now we just need a bit of a pullback. So where do I think we could pull back to? And we had some really, really nice— excuse me— we had some really, really nice shorts on the euro which work nicely, all based on this, all based on this sort of stuff. Uh, quickly, yep, that'll be fine. I've got the background there, quickly get rid of that. And so in order— risk and reward doesn't make sense anymore, right? This can't keep going higher forever, and so it needs to pull back. Where could it pull back to? Well, the Fib 382 here lines up with a 97.50 handle. Nice round number there. You've also got this really nice area of sort of these highs from back in early, um, January. You've also got these sort of highs. So these are areas of interest. I would certainly look for bullish price action. I don't necessarily know where the pullback's going to find a floor, but I do know if this stochastic starts getting oversold, getting oversold uh, bullish price action, then I might switch over to the euro and look for the opposite. So the euro, we traded it, we was, we was taking shorts up here, you know, uh, riding it all the way down, taking profits. And now it's too oversold. Look at this stochastic. Yeah, it's very tempted when price gets oversold like this to think now's the time to short, but you just need to wait for the bounce. And I think, where could it bounce to, to reload? Well, it's the same thing, isn't it? That 111 handle, you got the trend line there. And so, so actually that's a trade for in a couple of weeks' time. What do I think right now? I'll finish it up with this. Right now we've got some really, really nice— this hammer candle formed yesterday. What we'll notice here is that from the low point of 2019 to the high is a fib 618. And right on this fib 618. Yesterday's session, the bears drove it— so the session before yesterday, actually, was that Monday? Monday drove us down through that fib 618, and then the bulls said no and closed us back above. And then the following session, the bears tried again and drove us down through the 618 and then lost control, and the bulls said no and closed us back above, this time with a strong hammer. And we're oversold And today the Japanese candlestick charting says that if you get bullish candlestick pattern here, this low here should be support. And so I'd be fine with a, with a deep test of this level as long as we don't close below it. That's valid in my opinion. And it's the scariest time to buy.

Yeah, but then it comes down to risk-rewards. Good stop below, targeting that trend line where, rightly so, people would be looking to load up again. For that short. So yeah, I, I agree. I think we do a little pullback, and, and especially if we can close almost where we are now with a bit more, uh, then, then it could, could see, uh, some, some decent moves to come. Piggy in the chat, Alex and Sam, do you think pound will drop tomorrow? Ultimately, right now it's a coin toss. Uh, I would like to see from a trading point point of view, that trend line go for some shorts to come in. But anything about it that's hawkish, then, you know, the long would be favorable. If I had to give you an answer right now, I think we finish tomorrow higher. But really, that is me flipping a coin and probably wearing my pound hat on at the same time.

Oh, this pound chart, this trend line that you had on the other day, so it's just epic. Look at that. I mean, if one of these levels goes, it's going to be a big trade either way.

Yeah, yeah, that's it. And you know, people talking about is there going to be a Brexit bounce? Is, is the time— you know, a lot of people are talking about, you know, end of January, February is the time to start buying. But if that trend line goes, well, you know, there's probably a reason for it, uh, tomorrow. So yeah, we'll have to, have to, have to see. Mojo, I know you like trading the pound.

A quick, a quick taster of what could happen was a trend line break we had the other day. So massive level again off this 240-minute chart, and then the breakout. If we zoom in, you know, trading this— some of the guys here were trading this intraday. We had the big trend line here, which is this trend line resistance. Boom, off it goes. It's a monster move there, like more than 100 pips. Yeah, you know, getting along on the break of that, and then you've got the classic involved and all of that fun stuff. Uh, I've lost it now.

Yeah, but we're, yeah, we're going to be live tomorrow for that, and You know, while this one seems as, as close to a non-event as one could be before the press conference, I don't think tomorrow would— we'll do that. I think it will be plenty of opportunity, um, on that. And just put in the chat that it's priced in 55% in the favor of a hold. So I mean, you can't get much closer to 50/50 than that, which is good. I'm looking forward to it. Uh, the one thing— and we'll do the advice tomorrow— but one thing I would say is on the uncertainty of recent rate hikes that I— or rate decisions I've seen, the initial spike isn't always guaranteed that that is going to continue. So they could keep rates on hold, you see a spike to the upside, but they're incredibly dovish in what they say after that, right? And we come all the way back down. So don't, you know, get involved in that algo spike, don't trade it if you don't know what's going on, would be my, my advice for that. Seen many people get sucked into it, uh, as well. Yeah, let's have a quick look over just equities. And cheers for that, Alex. He'll be—

cheers, guys—

he'll be, you know, doing more of these. We'll get him involved tomorrow as well. And I just want to bring in the S&P here, which closed below there, uh, so unless we get a 15-minute candle above it, I'm not interested in buying. You can see if you did buy on the 5-minute, you've had a bit of pain. Your 4 points minimum offside, uh, 59.6, or 6 times 4, 24 ticks. It's not ideal for FOMC meeting. So just wait for that extra confirmation, uh, in, in these kind of trades. And you know, if it comes in now, well, suddenly it's 7:30, it's the press conference. So sit on your hands is, is my advice for that.

Yeah, just while Sam's here with me, away from the Fed for a moment and the charts, you know, one of the things that, you know, if you've not joined us before, I've got to give my— give the team a bit of a plug because I know not everyone who comes across these live events is subscribed to the channel. So please do hit the subscribe button button. Me, Sam, and I do a macro and technical briefing every weekday morning ahead of the kind of around the European Open. We also cover things like Sam just said, the Bank of England live tomorrow. So hit the subscribe button, put the bell icon, and that will turn on the notifications. You'll see everything when we go live. The other thing I wanted to mention was obviously there's lots of different ways that you you can trade. So this is more for those who may be new to this in a certain, certain degree. For me, there's kind of 3 ways you can trade. There's, there's, you can be quite strong on fundamentals, you can be a technical way of trading, so, you know, the kind of classic tools and that you can use as signals if you like, and then there's a third way which is kind of order flow reading the tape, you know, that type of thing, when you're looking at market profile and structure and, and you're kind of, you know, almost like the charts and the news don't really matter in that respect. But, you know, one of the things that we try to amplify, and I think the benefit of being, uh, of a macro approach, is that hopefully, as you can see from these types of events, from how we approach markets, um, you know, between myself, Sam, and Alex We're all quite different in the way of which we would look at things. The common shared thing though is we all have an appreciation of, you know, what is going on. I'd say for guys like Alex and Sam, it's about accumulating a decent level of competency on the fundamental side to make their technical way of trading better. And that's, that's by, you know, the judgment of timing, I guess, trying to eliminate unnecessary risk around a trade. I mean, Sam can explain it given this the way he trades, but the point I wanted to make here just briefly was for those who are new to trading is that, you know, the, the market— if you think about 2020, we're only in January if you can believe it, but we've had potential World War III We're potentially all gonna die of a virus. And China and the US— Meghan and Harry, Meghan and Harry left the royal family. I mean, we're only like 29 days in. But the point being is all of these are news-driven events, and you know, there's always a lot of news. But what's important from a fundamental perspective, which is what I specialize in, is you've got to apply a structure, a hierarchy Anthony Cheung, to all the different stories in play. And one of the things I've been talking about in the briefing recently is that if you think about it, since this virus outbreak has occurred, it's like all else in the world stops and ceases to exist. And that's why you've got to, you know, reevaluate the news all of the time and then think about then, well, what is the dominant macro theme that's going to derive then sentiment, and can move then direction of markets day to day. Very important when you're looking intraday, but also equally important if you're looking medium-long term. Because I've just picked up a few of the comments in the chat from you guys, and it was this idea of, um, you know, the pound. And I agree, the pound, you know, tomorrow is going to be exciting, but generally, comparative to where we were a few months ago, it's very dull now because volatility is died down considerably now that we've got at least some clarity with the formality of going through. Remember, Friday actually is Brexit. But that doesn't mean though that the pound will not become a renewed focus in a couple of months' time, which we get closer towards the new deadline, you know. And it's kind of having an awareness of the timeline of these key events of which you can— and actually, why don't I just bring up— there's a chart we were just showing some of our internal people on our learning platform, and I'll bring it up to give you a bit of context. And this is a great chart that gets done by the team at Nomura, and then we'll jump over to the press conference. So let me just bring it up and I'll transition my screen.

Cool.

Right, so this is the one. This is an event risk radar, and this is a particularly interesting graphic because I think it can be helpful both from a short and long-term point of view. And it's giving you an idea of where the potential risks can come. Now, this is applicable across all different asset classes. So forex, commodities. Now, when we talk about the implications of the policy that's being set, then, well, really what the Bank of England are going to do is highly dependent on what the outcome of Brexit is. So it makes sense then to monitor and know, you know, very closely what is the key pivots of the negotiation between the UK and Europe. Therefore, that will dictate then the likelihood of a lot of the action that might come from the Bank of England. Similarly for the Fed, you know, what is the political timeline of the, the Democratic and the Republican race for the White House again, and the trade war phase 2. And this is where you can look at these sort of charts and get pretty much a visualization of how you think. Then you can kind of judge from economic data what you think about the future performance of an economy, but then you've got to overlay, well, what are the risks to that view? Now, the risk might be that you make a, a judgment that that is not a risk, and therefore you can maintain the position, if you like. However, before you even place a trade, you should know then the rough timeline and duration of that trade and what it could be exposed to that could disrupt then it hitting its profit targets, in short. So yeah, I just wanted to cover that. I know it's a bit off topic of the Fed, but hopefully I, I think between the three of us, uh, it's quite a good complement of different skills. And I think Amplify, we are very much, uh, we, we love to encourage and support that as much as we we have specialists like myself and head of trading Piers in the macro environment where, you know, these kind of central banking events are kind of our bread and butter. You know, all of our traders have the freedom to trade as they see fit. However, they should have a competency in all of these levels, all of these certain ways of trading. You can't ignore the news, you can't ignore the fundamentals. As a minimum, you need an awareness of them. And so Certainly that's something we try to stress to our guys. All right, press conference is coming up. I just quickly wanted to share again that slide. Now this is from Deutsche Bank. Transition my screen again. Now Deutsche Bank, I put together a bit of a crib sheet. Thanks, Sam. Sam will come back on when it, when it all kicks off again for the, for the press conference. But just a quick reminder before he begins, and I'm just looking at the live shots at the moment, he's not yet taken the podium, but I'll let you know when he does and then I'll play it through the mic. But yeah, the outlook for policy rates. So does he give any hints on forward guidance? Persistently low inflation in terms of the ongoing federal policy review, which is really— we're not expecting anything for several months, but any hints towards how that's going, particularly on the metric of inflation, which is such a key driver of how they define and set monetary policy. The funding markets, this whole idea about are they basically doing covert QE by buying up $60 billion worth of Treasury bills every month, which has seen their balance sheet kind of re-explode, if you like, back towards or undoing a lot of the quantitative tightening that was happening over the last few years. And then the implications for global markets of financial stability risks just in general. The trade war is obviously the big ongoing one, and one that although we've got a little bit of clarity, and at least for now, I think China are going to get a bit of reprieve on that front in regards to the fact that they are going to suffer economically from this virus. The head chief economist of the China Stats Agency was talking about a potential 1% ramification as so far that their calculations are. That would mean that Chinese GDP at 6% would drop to 5%, which would put it at its lowest rate since the early 1990s. So obviously that's not good for China, but why haven't markets sold off on that? Well, Well, every bank on Wall Street has already calculated about 1% impact from the coronavirus so far, so it's completely within line with expectations. Okay, Powell is live now, so I'm gonna come off the mic. Let me get you a live feed of that, and I'll play it through the mic and we'll listen in. I will just reiterate anything important that he says, so give me one moment and I'll play it.

—manufacturing output has declined over the past year. Sluggish growth abroad and trade developments have been weighing on activity in these sectors.

However, some of the uncertainties around trade have diminished recently, Powell said.

Some signs that global growth may be stabilizing after declining since mid-2018. Nonetheless, uncertainties about the outlook remain, including those posed by the new coronavirus. Overall, with monetary and financial conditions supportive, we expect moderate economic growth to continue. The unemployment rate has been near half-century lows for well more than a year, and the pace of job gains remains solid. Participation in the labor force by people in their prime working years—ages 25 to 54—is at its highest level in in more than a decade. And wages have been rising, particularly for lower-paying jobs. People who live and work in middle-income communities and low-income communities tell us that many who have struggled to find work are now finding new opportunities. Employment gains have been broad-based across all racial and ethnic groups and all levels of education. These developments underscore for us the, the importance of sustaining the expansion so that strong job market reaches more of those left behind. Inflation continues to run below our symmetric 2% objective. Over the 12 months through November, total PCE inflation was 1.5%, and core inflation, which excludes volatile food and energy prices, was 1.6%. Available data suggests similar inflation.

So again, just while we're listening to Powell, He's probably not going to give away anything too much, I would say, in this part of the, of the conference. This is where he reads kind of an opening statement. It's the Q&A that's going to be interesting. Generally speaking, with central banks, the Q&A tends to have a pretty set kind of hierarchical hierarchy in terms of the, the press in attendance. So the kind of the bigger news agencies those who are the most kind of big-hitting journalists get to ask the questions, and usually the most pertinent ones, the ones that can influence markets first. And then it gets progressively kind of less interesting. So remember, it's kind of around the balance sheet, general risks, the economy, the coronavirus— these are key things that we're looking out for commentary on when we get to the Q&A. So the Q&A is going to be where we potentially could see some some movement, if there's any to be had, for this press conference.

As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy likely will remain appropriate. We will be monitoring the effects of the policy actions we took last year, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the federal funds rate. Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. The policy is not on a preset course. I will conclude with a brief overview of our current plans for our technical operations to implement monetary policy. The plan the FOMC announced back in October to purchase Treasury bills and conduct repo operations has proceeded smoothly. And has succeeded in providing an ample supply of reserves to the banking system and effectively controlling the federal funds rate. In light of the resulting stability in the federal funds rate and money market conditions more generally, we decided to make a small technical upward adjustment to administered rates to ensure that the federal funds rate trades well within the target range. This action reverses the small downward adjustment made in September when money markets were —volume. As our bill purchases continue to build reserves toward levels that maintain ample conditions, the role played by active repo operations will naturally recede. Over the first half of this year, we intend to adjust the size and pricing of repo operations as we transition away from their active use in supplying reserves. This process will take place gradually and, as indicated in in today's FOMC directive to the Desk, we expect to continue offering repos at least through April to ensure a consistently ample supply of reserves. Based on current projections, we expect that the underlying level of reserves will durably reach ample levels sometime in the second quarter of this year. As we get close to that point, we intend to slow the pace of purchases and transition to a program of smaller reserve management purchases. that maintains an ample level of reserves without the active use of repos. At that point, as in the pre-crisis period, our balance sheet will be expanding gradually over time, reflecting the trend growth in the demand for currency and other Federal Reserve liabilities. All of these technical measures are designed to support the efficient and effective implementation of monetary policy and are not intended to represent a chance of a change in the stance of monetary policy. We're committed to completing the transition to our longer-run ample reserves regime smoothly and predictably. Of course, we will continue to closely monitor conditions.

Right, so as to be expected so far, there's nothing really a great deal being said, certainly nothing off kind of key in that respect that would create any type of movement. Again, the Q&A will be starting momentarily. That's going to be potentially the important part.

Bloomberg News. Mr.

Chairman, I would like you to— Okay, we're into the Q&A now.

—a bit more depth about one small change I've noted in the statement. It notes that policy will be appropriate to bring— the Committee believes— inflation back to the Committee's 2% symmetric inflation objective. That's a slight change from the last time when you were expecting it to bring inflation outcomes back near the objective. And I would put this also in the context of a comment you made at the last press conference where you drew attention to the fact that a number of policymakers had projected inflation overshoots 2 or 3 years out under appropriate monetary policy. Should we take all of this together to mean simply that the Committee is more confident that a 2% outcome for inflation is already baked in the cake, or that this is a signal that the Committee has a stronger resolution to bring inflation at least to the 2% objective and put— bring into play an informal makeup strategy for inflation.

Yeah. So in making that change, our goal was really— that was changing "near" to "returning to"— was to avoid possible misinterpretation. So you may remember in the December minutes, we noted that a few committee members suggested that the language that stated that monetary policy would support inflation near 2% could be misinterpreted as suggesting that policymakers were comfortable with inflation running below that level. Level. So we thought about that in the intervening period and concluded that it would be appropriate to adjust that language to send a clearer signal that we're not comfortable with inflation rising persistently— running persistently below our 2% symmetric objective. So yes, there is something in that. It's just that we wanted to underscore our commitment to 2% not being a ceiling, to inflation running around the symmetric asymmetrically around 2%, and that we're not satisfied with inflation running below 2%, particularly at a time such as now where we're a long way into an expansion and a long way into a period of very low unemployment when, in theory, inflation should be moving up.

Thank you.

Nick Timiraos of the Wall Street Journal.

Anthony Cheung. I want to ask about the balance sheet.

How many reserves are ample?

How many reserves does the Fed now think it will need to conduct policy in its current framework? And can you walk me through how you and your colleagues are arriving at that answer?

Sure. So, thanks for that question. I— why don't I say a few things about repos since I know that will be of interest. So, just to bring you back, after last September, Following September's brief turmoil, we took prompt and decisive action, and as a result, money markets have been operating smoothly since then. Just to review, those two adjustments were Treasury bill purchases of at least— of $60 billion, sorry, at least into the second quarter, and term and overnight repo at least through April. And I will get to your specific question. The purpose of the adjustments has been to assure that our policy is transmitted smoothly to the federal funds rate, which requires well-functioning money markets. That doesn't mean we're trying to eliminate all volatility in the repo markets. We know that some volatility is normal and expected in well-functioning markets. And as I mentioned, these adjustments have been successful in supplying an ample quantity of reserves. Money markets operated smoothly, including right through year-end, and the Fed funds rate has remained in our target range. So we know— we will know when these adjustments have run their course when reserves reserves are durably at a level that enables us to control the federal funds rate using our administered rates, interest on reserves and reverse repo, without the need for frequent use of open market operations. Based on current projections, we expect that the bill purchases will durably bring the underlying level of reserves to the ample level sometime in the second quarter of this year. And when we see that we've reached that level, we'll begin to gradually reduce our asset purchases purchases to the level of the underlying trend growth of demand for our liabilities. As our bill purchases bring the underlying level of reserves up to an ample level on a sustained basis, the necessary quantity of overnight and term repo will gradually decline. We've already begun the gradual reduction in the quantity of repo and will continue to reduce those offering amounts gradually as conditions permit. At some point, we'll also raise the minimum bid rate even after we reach an ample level of reserves, it's possible that repo operations might play a role as a backstop and support effective control of federal funds rate. And we'll continue to discuss that issue in reviewing our implementation framework. Coming to your question, in terms of the actually desired reserve level, we know that reserves will continue to move up and down over the course of the calendar year in a wide range depending on volatility in non-reserve liabilities, particularly the Treasury General Account, or TGA. In particular, reserve levels will need to be at a level high enough to remain ample even when the TGA peaks during the April tax season. Effectively what that means is that we need reserves at all times to be no lower than they were in early September, and I would say around $1.5 trillion, subject to learning more. Reserves are going to move in a broad range, as I mentioned, and we want to be clear, that will be the bottom end of the range. We want $1.5 trillion or thereabouts to be the bottom end of the range. So most of the time, reserves will be moving in a range substantially higher than that, but not going below $1.5 trillion. So it's not something that we're aiming at all the time. We know that reserves will fluctuate and be substantial.

Just while we continue to listen in, the moment to pound. He's talking about the balance sheet, it's quite, quite detailed for the moment, but start to see a little bit of currency movement. The Dixie just taking a bit of a move lower, perhaps coinciding then with a break higher in the euro currency. EURUSD just coming above that high print that was seen earlier in the afternoon session. That was also the low print that was seen 2 days ago, beginning of the week, in the afternoon. So just looking to move up in the futures up towards the pivot level. Cable still contained by that same pivot point at the moment, uh, but yeah, perhaps just a little bit of a, uh, a movement here. The dollar weakness, if anything, just keeping an eye on gold on the top right chart here, getting close to some of the volatility that was seen this afternoon just shortly after the Wall Street open. Just testing at the moment at 79.5. The 10-year also just creeping up a touch. So perhaps on a correlation point of view across the assets, a little bit of, of dovishness, but the equity market certainly unmoved for the moment. More questions coming from Powell at the moment. We'll continue to listen in. Steve Leisman just asking a question. He's generally pretty good. Let's see what Powell has to say, and we'll monitor maybe one or two more and then we'll conclude with a few summary points.

And we know that the TGA will move up and down that. So they'll be much higher than that some of the time. But that's kind of the number, and we think we'll reach that sometime in the second quarter. That's our estimate. But we'll know it when we get there. We'll know it because we'll be able to control the federal funds rate without use of— without active use, ongoing use of open market operations. You know, our intention of these— for these adjustments is just to raise the level of reserves and to allow us to conduct monetary policy in an efficient and effective manner, and that is our sole intention. I pointed out on other occasions more than once the differences, the really specific differences between this and the large-scale asset purchase programs. We've been over that. In terms of what affects markets, you know, I think many things affect markets. It's very hard to say with any precision at any time what is affecting markets. What I can tell you is that you know what our intention is. It is to return reserves to an ample level. We expect that to happen during the second quarter. And our plan as we do that is as those purchases get to that level, we believe we can gradually reduce them and we believe we can also gradually reduce repo as we reach an ample level, as we're satisfying demand now more from underlying reserves, from bill purchases rather than from repo. And again, last thing I'll say is we're prepared to adjust the details of this plan, as we've shown ourselves willing to do, depending on conditions. Gina.

Hi, Chair Powell. Gina Smiley from The New York Times. Thanks. I was hoping that you could talk a little bit about the labor market. We've recently seen wages moderating a little bit by some measures, maybe even declining a little bit by others. As you mentioned, at the lower end of the sort of talent pool, it seems like we are seeing those wages climb up a little bit, but it doesn't seem to be consistent across the entire sort of average. I was wondering if you talk a little bit about whether you guys are noticing any cracks whether you're worried about that or how you're thinking about it.

Labor market continues to perform well. The labor market—

Okay, so I'm gonna, I'm gonna come off the press conference for a moment. Alex can keep me posted if there's anything interesting that comes out of it or the market starts moving, because a couple of other points I want to mention before we just look to wrap things up. So a few things I want to talk about. Firstly, thank you for tuning in, and I know there's some very familiar names that I can see— Mojo and so on— that I know you guys leave comments often on our daily videos. So thanks so much for watching, and I do— again, I'll repeat this, and I always say it to everyone— is anyone who hold on, Sam's getting called out by a few people at the moment. Anyone who has any questions at all on any of the daily content that we put out, absolutely feel free to leave a comment on our videos. I encourage you almost to do so. If there's anything you question on the macro side from me, or from the technical side from Sam or Alex, or from anyone who delivers any of our content, then leave a comment. We'll always try our best to get back to everyone, and so it's a great learning tool for you guys to bounce some ideas off of us. If we can help, we will. Again, a bit of background on myself. So I was one of the founding members of a company called Ransquawk, who you may, may not have heard of, but it's one of the biggest squawk companies in the world. So I used to be the head of market analysis for them for, for 10 years before I came to Amplify about 4 years ago. I now oversee the, the trader division, if you like. Amplify is kind of split into two halves, as you can see on this screen here. This is our website. You've got the side I oversee, which is the trader development kind of side. Then you've got this student internship training side where we basically have our own proprietary software software that's being used by pretty much most of the business schools, definitely across Britain, but also globally. It gets used in France, US, China, and this is basically financial markets training software, but it also gets used by big institutions, so Nomura, Bank of America, Credit Suisse, BNP Paribas, and so on. But that's in our technology division. If you have enjoyed the session, and certainly from a fundamental point of view, if there's— if it's sparked your interest, then just click on that trader button on our website, and that will take you then to this page. And this gives you a bit more detail about, you know, who we are, what we do, and so on. Some other members of the team, apart from myself, these the two co-founders of the business, Will and Piers, both former proprietary traders for a US firm called Goldenberg Heymeyer. So they both started back in— I think we've got to go back to the year 2000, so about 20 years ago. They formed Amplify about 10 years ago. But if you go on here, gives you a bit more information about our trader program that we, that we run. All of our traders that we have, whether backed or that are part of our trading community, have done our training either recently or over the last 10 years. And how this training basically works is it starts online. So if you go on this website and basically click this Start Now button— so if I just click that now, you'll see that there's a pop-up. And basically, if you input your details, there's a free 15-minute video from our head of trading, Piers. So this is Piers on CNBC, of which he's a regular kind of co-host in Europe. 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And that really is where you get to test out your you know, what is it like to trade in a real live environment taking positions of risk, and that's where we work very closely with our traders to develop them in that live environment. So I'll share this link now in the chat room, but I'll leave it really for you guys to check out in your own time. I'm not going to force it down your neck, so to speak. A few other points though of interest: myself and Sam, we're quite active on Twitter. Obviously covering our own unique kind of strengths. So me, I'll tweet anything from the fundamental side that I think is interesting. So obviously a lot of stats about the coronavirus, backtesting it against things like SARS or Ebola, and people would generally turn to someone like me as to have an opinion about these sorts of things. So hopefully I can help with that. But yeah, could be useful just to add into your Twitter feed if you use it. On that note, Twitter is a really useful tool for trading, both for learning about markets and also for generally keeping on top of the news. And I did a, I did a video here about how to use Twitter, and so if you haven't watched that yet, it's definitely worth a watch. I did it over Christmas while we were on the break, but a lot of people have said to me they found that quite useful, so If you get a moment, do check that out. So that's, that's me on Twitter. My handle is there on the screen. You can see it. Just search my name. And then Sam, of course, on the technical side, definitely worth a follow. So if you just search, his name is Sam North and his handle @snorth19. And then the Amplified Trading channel, or the Amplified Trading YouTube channel, I should say. So we're going to cover the Bank of England live tomorrow. The plan is to kick off things at 11:30 AM. It's obviously a monetary policy report release as well, so we're going to cover the full release. I'll do a preview, we'll look at the live event, and definitely it's going to be way more market-moving, definitely intraday, than what we've seen here from the Fed so far, for sure. So that's definitely worth tuning in for if you can. If you can't, then just go back on the channel, we'll have it recorded and uploaded, and you'll be able to access it here. On the YouTube channel, again, don't forget to hit that subscribe button on the right, hit the bell, and then you'll be notified every time we do something live or we update new content. We do it on a daily basis. On the YouTube channel, you've got the morning briefings, which is our daily kind of get ready for the session piece that we do first thing in the morning. You've then got the weekly one we do on a Monday, which is an outlook for the whole week. And you then got other interesting videos where How to use Twitter. This is a great video here from Piers about lessons he learned from one of his biggest losses. Pretty honest and open interview that I did with him, and the same with some of our other traders. And then you've got live sessions recapping breaking news events. There's a couple of lecture tasters here for the sort of things that we do generally day to day here at the office with our trainees and our junior traders. And some other bits as well you might find interesting, so do check that out. Okay, that is it. Otherwise, I'm going to wish you a pleasant evening. Thanks very much for joining us. For any of the guys, I'll see you tomorrow if you've been watching this from home, and we'll catch up and do a full debrief of this Fed event. Thank you, Sam, Alex, all the other guys here for sticking around. Joanna, hope you're well. Onda, Hamid, The P, Piggy, thank you very much. And as I said, anytime we post these daily market briefings in the morning, absolutely feel free to leave comments. I will always do my best to reply. Had some really good conversations on there over the last couple of weeks, so Long may it continue. Okay guys, thanks very much. Have a good evening. Back to it first thing tomorrow morning. Drew, hope you're well. Gary, thanks very much.