Stocks Consolidate Near Highs As US Yields Continue To Decline

Okay, very good morning everyone, hope you're doing well. In order to practice what I preach, this briefing is not going to take long because there's not a lot going on. So I definitely want to convey the idea that when it comes to monitoring, aggregating the news, that sometimes there is just not a lot of new information that's relevant really for for the market open. And that today is kind of one of those days. So I'll keep it, keep it relatively brief. But looking at the charts this morning, things are basically flat. The Dixie's unchanged. Oil is unchanged. Equity index futures are broadly flat. So if anything, a lot of consolidation happening at the moment, particularly with the US indices after the rally that we saw on Easter Monday, with the slightly lighter just general volumes with UK and Europe out of the market. Them coming back yesterday didn't really add too much in the way of a great deal. They're certainly not in the way of any new real fundamental catalysts in, on a macro sense. Volumes on US exchanges actually slipped below 10 billion shares for the first time this year yesterday. So from that perspective, one of the quietest days we've had so far of the year. Asia then overnight, not too exciting, mixed to flat. So again, not a great deal to comment on. A few things that have just happened as I've switched the record button, um, just to be aware of. In the currency pairs, seeing a bit of a divergence at the moment. Euro-dollar, more positive dynamics, and the pound more negative. I'm just speaking to a couple of other analysts. They're noting a technical break in euro sterling. Again, nothing from a fundamental news catalyst perspective, much more technically driven this morning. But euro-dollar here just having a bit of a break out of what was a restrictive area of upside resistance, both late in the US session and the Asia-Pac session. So EURUSD just having a push-up through to the 119 handle, whereas on the downside, cable continues to decline, having gone through the low that we saw from yesterday evening UK time and the 138 handle this morning. Otherwise, elsewhere, T-notes have just broken as well, um, a short-term double top that was seen just before the close, kind of really towards the back end of US session. And so some further upside there might contribute, as we have been seeing of late then, further decline in yields, a softer dollar to support that euro move. Generally as well, that yield backing off, as we were commenting on yesterday, which is in step— we've been seeing some dollar weakness has been supportive of some of the commodities. And gold, which was flat just a few minutes ago, has just seen a bit of an upward move there with the 10-year just breaking out, a little bit of movement in the rates market. But overall, as I said, very quiet. Overall, not too much to really comment on, so I'll get straight to it. And a quick update on the COVID vaccine situation. And this is one of the major headlines coming out Bloomberg this morning: Moderna COVID-19 vaccine being rolled out in the UK for the first time. Still going to be, I believe it's about 2 more weeks before it actually does get officially rolled out and administered or available to be administered. And it's going to be focused in Wales specifically. But what's happening here is that this announcement has come where the vaccine from Moderna is going to be with us 2 2 weeks earlier than expected. Now I guess the question mark there is, is that positive? Is that going to help make any real definitive change to the vaccine speed in terms of the program for the UK? And consequently, could it have any impact? And the answer to that is no, not really. To give it a bit of context, this is what we're looking at at the moment. And so as we've— as we, you guys I'm sure are probably aware, the basket of vaccine orders from the UK is heavily tilted on AstraZeneca. Of which we, we've talked about many times before. If you actually look at it, Moderna is the smallest order. It's right down here at the bottom at 17 million. And, and as to what we could expect for manufacturing and supply, um, kind of timeline, we're talking hundreds of thousands of shots to get this thing up and running. So in a sense then, it's fairly inconsequential in terms of really moving the needle on the roadmap, which the government has still said that they're looking to do, which is the final kind of reopening of the 4-step plan on the 21st of June, and then more broader nationwide inoculation by a month or so thereafter. In context as well, what, what we have had, of course, in the UK, as announced a few weeks ago, is supply issues with the main AstraZeneca drug. And obviously that's really important because that is the key one to facilitate the rollout program in the UK. Now, why has that happened? Well, lots of supply issues coming by way of India and Serum and that, that batch of 5 million, but then new production coming out and so forth. So a lot of what's been happening is a halt to new first shots being administered, and therefore then what we're seeing is a convergence, if not a change, of second doses on a 7-day average exceeding now the first shots, and without Astra being available in terms of their vaccine, we've had a various inventory and still supply of the Pfizer-BioNTech drug, and those people are coming due for their 12-week second shot then, and that's what they've been receiving. So a lot of what's been happening has been more focused on second shots while we await then to get first shots underway in the coming coming weeks. So overall, the Moderna news certainly is a, it's a positive thing to hear, um, from a COVID, um, kind of health crisis point of view. From a market's point of view, it doesn't really make a great deal of difference, and we were expecting this to come at around this point anyway. In other vaccine-related news, University of Oxford has said that it's paused a small UK trial testing COVID-19 vaccine it develops with AstraZeneca in children and teenagers as it awaits for more data on rare blood clotting issues in adults who receive the shot. I haven't had a great deal of time to read in more detail into that story, but putting two and two together, I wouldn't really get too nervous about that announcement. I'd probably say that's normal procedure, if anything, just given the ongoing review that's happening for the shots in regards to some of the knock-on conditions that have happened after receiving that, that particular vaccine. And then elsewhere in the US, President Biden has come out last night and says he wants all American adults to be eligible for the coronavirus vaccine by April 19th, which is basically 2 weeks earlier than his previous goal. So the US continue to get more and more kind of ambitious with their targets going forward. A few other things to be aware of on geopolitical front, and we can talk mainly about oil now. Oil is unchanged this morning, but Iran have said that nuclear talks in Vienna aimed at restoring its 2015 nuclear deal with world powers have been constructive. They were talking yesterday, but they have stuck to their demand for the US first to remove all sanctions for any real progress to be possible. So it's kind of one of those where it's good that they're talking, but nothing's happening at this point. So there's nothing really— there's no meaningful impact for price for the time being. As we've kind of said before in previous briefings, this Iran negotiation is not going to happen quickly. It's going to be over many months. So I wouldn't be looking for any definitive kind of action on the back of this. And then we had the API inventories last night. Crude was a draw of 2.618 million. Cushing, 84,000 draw. Gasoline, a build of 4.553 million. And we'll be looking out for the DOE's later. Remember, it was only a holiday in mainland Europe, UK, on Easter Monday. So the US schedule for the inventories is completely as per normal, so it'll be 3:30 London time, we'll get the DOE's this afternoon. And on that point then, just having a quick look at the calendar, um, it's, it's a fairly quiet calendar. Again, this week is quite quiet overall. And so looking for this morning, we do get the service PMI numbers coming out of Europe and the UK, but these are final March readings, so not expected to be too market moving, if at all. Um, then looking into the afternoon— excuse me— there's no major 1:30s coming out in the US. We've got CAD trade balance. So then we look to the order book trades at 3:30, and then the FOMC minutes on today at 7 o'clock. And I've not really read a great deal about people talking about the FOMC minutes, and, and a lot of the time that says it all in the sense that it's probably not really that important. And I can understand that. The last meeting that we had, if you remember, just a few weeks ago, did include the summary of economic projections where everyone was looking for any movement in that dot plot, which we didn't see, where we saw rates then committed to the fact that they're going to rise still through 2023. Rates markets nonetheless have continued to bring forward their anticipated first rate increase now into the end of 2022 nonetheless, given some of the really strong economic data we've had out of the US. But what new information are we going to get out? The minute— probably none at all really. And so hence the reason why it's, it's most likely going to be a fairly dull event. Typically when they release the projections, if you think about it, we're getting clear indications about their latest vision about what the future looks like for unemployment, for growth, for PCE, for rates in terms of federal funds rate forecasts. So it's not like we were short of any information to then have the clearest possible understanding of where the Fed's heads were at at the time. So the minutes unlikely really to unveil much in the way of anything new, I would say. But one thing we do have is a couple of Fed speakers, Neil, happening this afternoon. In particular, the two that I'd look out for really is Fed's Evans and Fed's Barkin, both of which are voting members and generally have a neutral disposition in terms of where they sit on the hawk-dove spectrum. Evans is speaking on current economic conditions and monetary policy at 2 o'clock London time, and then Barkin is speaking at 5 PM London time. Daly, who is a voter and also neutral, Speaking on climate change and equality is also, as a side point, talking about the economy. And Mary Daly will be speaking at 6 PM London time as well. All right, and that is it. As I said, I was going to keep it brief, so I'll stick to my word. Any questions at all? I was talking to some former students in Bahrain actually last night, and they said that they still watch the briefing every day. So I'm going to give those guys a shout out to the guys in Bahrain. Thanks for joining me last night. But otherwise, for everyone else, have a good day ahead. Again, market conditions are very quiet. I know I've not really looked at the charts too much from a technical perspective, but certainly when markets are quiet from a fundamental news point of view, I definitely would be putting more of an emphasis on the technical setups of charts across assets as a, as a, as almost a more weighted component for market direction today. And with that, good luck. See you later, and then I'll see the others in the, in the Discord room, Amplify Live. Take care.