Fed Powell's comments on the post COVID.......>

CABLE: Fed Powell's comments on the post COVID road to recovery acted to weigh

on equities, in turn denting the recent positive risk outlook. Sterling, which

has been a major beneficiary of this positive outlook, saw cable extend recent

gains to $1.2813 before momentum faded and risk outlook turned sour. Rate closed

the day around $1.2743 and with Asia taking over the risk off baton pressed rate

to a deeper corrective pullback of $1.2656 before finding some demand into early

Europe. However, recovery efforts so far remain shallow. As mentioned,

sterling's recent corrective move higher was fuelled by the move up in equities,

stock market analysts linking the demand to TINA ('There Is No Alternative' for

investors), which could suggest that these investors will eventually move back

in once this corrective reaction has passed. 

- OECD concerns for UK COVID effects, Brexit negotiations, BOE leaving door open

to negative rates, remain in the background, so far not being directly linked to

sterling's pullback.

- Light UK calendar, focus on US PPI and Weekly Jobless claims.

- Cable support $1.2656, $1.2620/19. Resistance $1.2700/10, $1.2750.