 Okay, very good morning. It's Anthony Chung here Amplified Trading. It is Friday the 15th of May First of all don't forget to like and subscribe to the channel two new videos We're going to drop this weekend on Saturday my colleague Eddie You've probably seen on the channel before he's going to be doing an exclusive video about Negative interest rates explained essentially everything you need to know and it's obviously been a real talking point this week But how does it work? What are the repercussions? How does it then affect different asset classes? How can you expect the communication changes to come into play from the likes of what Andrew Bailey was saying from the Bank of England yesterday? He's going to cover all of that. So that's going to come out on Saturday morning and then Sam North is going to drop a Weekly going forward now Sunday peace about technical levels and trade setups for the week ahead So make sure you subscribe to the channel to catch those If you're interested to find out more about my trading the link is below It's in the red bar on this video. So do check that out when you get time but let's just take a look at the charts this morning and It's a relatively quiet morning You US index futures relatively flat at this point after what was a generally firmer clothes on on Wall Street and a positive Or be it moderately Asia Pacific session Tokyo Hong Kong Seoul or higher Shanghai a little bit of fluctuation. That's This morning then in Europe is trading at the moment Up about 94 just following that lead But the US futures as I said pretty flat in regards to the down the S&P for the moment Elsewhere in the FX markets The major pairs a little higher in terms of euro dollar and cable so touch a dollar weakness T-notes pretty flat gold still relatively elevated and oil has been a bit of a standout and just on that point I just want to have a quick look at some of the charts and the equities first I'll tie in the look at the Oil chart when I talk about the fundamentals and I'll wrap in some technicals to be aware of as well But this of course is that Chart that we had marked up from yesterday So if I just remove my camera feed for a moment you can get the full kind of narrative of the last couple of weeks and Yeah, yesterday we saw as we were talking about a briefing quite a lot of negative developments yesterday and Markets did eventually come off through the European session at least And we dropped through some key levels. Remember these were the rectangles at that point in time in the morning We were right in the middle of that main kind of Trading area or band of resistance and support We broke through there went through that other target Which was that low on the fourth and then got close proximity to those lows that were seen down on the 24th before then we had You know an almighty rally really as Europe left the market the US came in and really just being fired things back up Couple of different things here. It was interesting when Jobless claims came out because post jobless claims We actually fell in US equities and my reasoning there was at the time if you think about it if the jobless claims number wasn't too far away from Expectations and what that means then is it doesn't really force the hand of the Fed to move sooner toward negative rates and Equity markets generally particularly US stocks Typically like stimulus and so we had that previous day sell-off on the power speech where he kind of pushed back on the notion of deploying That as a policy tool anytime soon and then the jobless claims came out because they weren't horrific enough Then it doesn't bring in forward the expectations of that negative rate Being a real tangible prospects anytime soon. So actually is actually sold off The reason behind the rally. I don't have one if I'm honest with you I mean it has been quite interesting though. If you look at the price patterns here, you remember on Tuesday night We had that big sell-off which really wasn't sparked by one singular headline There was a couple of technical key areas of support that gave way There's a little bit of apprehension about the trade war the Secondary waves virus sure there's a few things in play But the severity of that remember we came in the next day and the markets actually bounced and then we had the big shift Lower we've had the shift lower. We've bounced. Yes, albeit the bounce this time has been way more aggressive But yeah, it's gonna be interested to see how we finish Today for sure because it has been a fairly bumpy week But overall fairly negative one in that sense gold then has continued to just remain supported in that extent It's just looking here At gold there's a few key areas now where we had a big bump up yesterday So net net, you know gold playing It's own tune slightly from that equity move. I said equity is coming off I guess it's a natural relationship in a sense that then you get a bit of a bump in in a flight to quality and gold going bid But a lot of the the fund managers I've read in the FT this morning talking about look Obviously, there's a threat of deflation in the short term Of course, let me just put my feet on There's a flood of deflation in the short term Of course given that the massive drop-off in in demand just given the situation of the lockdown But they're looking at the longer term and they're thinking well There could be some real inflationary threats down the line just given the mammoth scope of the stimulus provided on the fiscal and monetary side and Perhaps you know gold offering that you know that kind of hedge against future inflation Helping things as well as just generally then some some negative developments We've had this week has been particularly kind of challenging for the equity market After rallying post payrolls this time last week when we're up those highs and and so gold still offering a degree of I guess exposure for many different types of investors and and technically there's been some nice Areas to get in I mean that that move was fairly rapid when we went high yesterday But if you look it came right down to quite a nice strategic point of entry I know a couple of the guys were looking at this yesterday where the price came back down to around that 35 and a half level And you can see that was the Honda 8th and also on that one of the points of that trendline test come back on the 30th a nice entry point for the long and then just taking the position up Taking some off then on the move back up to the the respective R2 on the day and then the final part of the contract off You're holding that position and then taking it off of that initial spike high that we had yesterday post the jobless claims So yeah, no nice setup there technically we've had a fail push above that at the moment It's attempted to if we did move higher Then really it's quite clean air for for an extension of the move on there on this trend That we've seen materializing over the last two days really and you've got the R1 just above But but really technically there's nothing really too much then until we start getting more further up to around 1759 and a half up that to that kind of area there But in order to see that happen in the intraday session I think you've got to be looking for a bit more of an equity kind of meltdown going into the weekend Whether that will happen or not is yet to be seen, but I would be watching those correlations Otherwise you might get a bit of a push down and perhaps then we kind of we're in this area here now Consolidation before then we make a decision So we either see a bit of a break higher and equity soften or we play this Consolidation and then perhaps we start to reverse the move if we break the range And if that were the case well then the next levels that I'd be looking at these highs So coming back down to around 28 and a half down here So that's the gold kind of story in the equity story I'm going to look at oil a bit more detail in a moment, but let's just jump on to some headlines I'm going to start with this. This was the Industrial production in China overnight shows some signs of improvement in April signaled that generally, you know The government stimulus that they've been doing fairly heavy-handed is helping out Helping improve things here domestically retail sales though were Disappointing so obviously industrial production is one thing that they can immediately stoke or renew demand Because if the government comes in and says right we're going to spend this money We're going to build this it's going to require this action in terms of industrial production You can't quickly switch on and off the consumer in terms of their confidence so quickly And as they have this cautious reopening obviously we saw in Wuhan this week I think since April they've retested a huge proportion of that 11 million population But we have that secondary outbreak this week and Hence their lives a bit of an issue with the consumer really just getting back and spending again a being confident and B Having the physical ability to better just go out Inter shops restaurants bars and so on and an act in a more Normal behavior that we would have seen pre the pandemic So yeah a bit of a disconnect there But certainly a few people looking at this this morning just given the strength of the balance if you look at it We've pretty much in that one sharp V eliminated all of that negativity that was seen in the prior readings And it's getting a bit of attention comes in the context of course of Trump yesterday One of the headlines was he said he doesn't want to talk to Xi as China tensions rise the president muses about severing ties with China Trump says you are looking at Chinese companies on exchanges. I mean Severing ties with China. I mean when he's talking back doesn't want to deal with them at all. I think that is absolute nonsense You know the the relationship that these countries had is so integral to one another and it's so Embedded on so many different levels, you know, Trump is just saying what Trump needs to say at this point in time And that then leads me on to an important point. I want to make which is this, you know, when you think about Trump and The the next couple of months you have to think about it in terms of what is his political agenda as much as his management of the current and future economic situation Now as we know there's a US election happening a bit later on this year and what's important to understand for me is the timing around when you can expect the rhetoric from Trump on China to intensify and actually I think that you can roadmap that out pretty accurately and That's a good thing to know if you're trading short medium term because it puts you in a position of knowing where there is increased risk Where Trump really starts to push the envelope a little bit and start saying these quite Outlandish things but could be received quite negatively in the markets if they take it seriously So here what I'm looking at is a map of United States, but I've got colored here a couple of different things So the red obviously solid Republican the blue solid Democrats a California state of New York and so on I don't care about those they are going to remain in the hands of those political parties more likely or not the ones I am more interested in or the most interested in is the yellow ones and the yellow ones are the toss-ups So although they're faded blue and yellow ones or the faded blue and pink ones are Leaning one way or the other Fine, there is a potential that they could flip political allegiances, but it's the toss-up ones that I'm focused on and so for me Trump then his administrative team of course will be focusing the battle goes on in these Several states, you know, there's no need to spend campaign energy and and financial power on the likes of California if you're a Biden because he's got it sewn up already. What is he going to do? Well, how about he focuses on an area like Florida? For example, where a lot of people in the Northeast might go for retirement because of the warmer weather that helps their General health when as they get older for example, so the two candidates will be battling it out trying to get attention and voters Sway their attention towards their party in those areas Now if you know then when Trump is going to be Landing, let's say in Wisconsin or Michigan or Pennsylvania I think you can get a pretty good feel for when then you can get the timing of when he's going to ramp up the anti-Chinese kind of slogans in that in that sense and Guess what yesterday? He was in Pennsylvania. He arrived in Allentown He was doing the rounds in a distribution center He was delivering remarks, you know and so on and so forth and what that means to me then is that There's an increased chance that he's going to start saying these types of things So instead of it being just so reactful and just just waiting for news to come out Trump says this Trump says that I do think that you can pretty much plot out the The what he's likely to say and when by knowing his predefined schedules So obviously the scheduling is very important, you know I'll share this with all of our guys his day-to-day schedules I think it's just important anyway to know Generally who he's meeting what his movements, what are the timings when could he be tweeting and so on But again, if you look at this graphic, this is again look at United States on a state level So we can see all the different areas, but here what I'm looking at is Not just the political disposition, but now I'm looking at the severity of the rolling weekly unemployment estimates by county and as you can see here Pennsylvania, Michigan, for example, two of the worst hit areas due to the COVID-19 lockdown So for me then Pennsylvania, there's a lot of people losing jobs The local economy is really suffering on the back of that And so that is an area where if I was Trump and rolling into town I would be absolutely banging the drum about how this is a Chinese virus. It's the Chinese fault You know, I'm gonna do every stimulus package I can afford in order to assist this area someone or so for so again, just wanted to explain The way to think about this type of thing in order that you can be a little bit more savvy beyond just that of just Blindly looking at an economic calendar or a schedule for the week You should also be thinking about this because it's probably going to become more and more increasingly important Because the verbal threats are going to increase and intensify most likely over the next few months You know, given how bad the economic situation is This is a little bit worrying because it means Trump really does need to go pretty far now in order to convince the general public in these areas That it really isn't his fault. It's China's fault. It's Powell's fault. It's the state governor's fault or whoever Lies on the blame The other thing then was this You know, don't don't get confused with what Trump says necessarily means will be reality I mean if I got paid a pound for every time Trump said something to what he actually Goes and follows through. I mean he says a lot and he follows through on very little Henses his his kind of managing of situations And this is that kind of infamous trade war cycle here Not probably this dot needs shifting over a little bit to down here Because this week we've had a little bit of a market sell-off as the administration's got tough But lo and behold and I'm sure this will materialize in the coming days Weeks the administration will hit a resolution markets will feel quite comfortable again And then there'll be a lack of progress and then around we go again and again I don't think this is going to change in terms of how then, you know As long as equity bounced like they did last night I think Trump can continue to push harder and harder on China It's only when we get a continuous sell-off And a little bit of the problem that we had in the last couple of days is that POW Pushing back against negative rates means then if he pushed back some negative rates But the trade war escalation goes up Well, the balance is then markets need to go down if negative rates become more of possibility And then he pushes on China will then cut it equalizes each other out but again, we go back to that whole idea of You know how far does Trump really want to push things because if he really did push it He could force Trump power's hand because if the markets continue to fall and we've got nowhere near that point of this This present point in time But then power doesn't have any any other choice, you know His job is to manage the economy and also to manage financial markets in a sense that you know stabilization there generally then Creates confidence about the economic future. So yeah, couple of things there to think about that. I thought I'd go over Moving on though, let's have a look at oil And oil set for a third weekly gain on supply cuts and demand recovery and let me just switch over to the oil chart and Actually, I'm just gonna go over to here So looking at a 240 candlestick and actually I think we have broken through quite an interesting area yesterday And that is, you know, I've kind of put two rectangles here of the price movement that had really been Defining the range of May so far on the upside was around 2770 They've had a couple of tests of that area back on the fifth and the seventh third in the month And in the low end of the range more like 2450 type area now yesterday evening There's some positive catalysts which I'm going to go through that created the break But now we've got the break you can see the market using that previous significant level as a bit of a An area of support now for the next push higher on the push higher the area then that's just being found as an area of Resistance initially before the move that we've had this morning was around these types of areas here and Then we pushed up just getting rejected Short of that area here and here the low on the 16th of April and on the 20th that acted as then quite a significant level for what was a break at the time K back up to that level before the pushback now So here's quite key just before we get up to the R1 today Which would coincide with around the $29 handle any further follow-through on that then I'd be looking up at around this type of area 2941 but why the positivity in oil well a couple of different things and Developments really they were happening yesterday that caused that late late session kind of rally Saudi and Ramco. They're slashing their sales to key buyers The up and that's helping on the kind of demand side the IEA of course Said the market is showing signs of improve improvement and they're boosting their 2020 demand forecast by around 700,000 barrels per day They also said the decline in oil demand in the first half of this year is not as bad as they initially feared So that that was a little bit of a bid on the back of that yesterday morning OPEC plus has cut their daily exports by almost 6 million barrels in the first 14 days of this month according to petro logistics Or global oil production now is on track for a pretty historical decline. In fact This month will be the lowest level of production globally in nine years so really coming through with the promise that they made in that historical agreement on the 9th of April when OPEC plus and those G20 energy Producing nations all came through with that coordinated effort to counteract what was then The big breakdown in oil prices that we saw and then we've had things like China overnight the industrial production figure output increasing in April for the first time since the outbreak has really Go some way is then thinking well if China gets back on its feet and domestic situation starts to settle Then that has implications as well to help bring back that imbalance that we had between supply and demand So supply basically has come down rapidly And on that note, we've also had of course this situation not just on a forcefully cutting but Financially oil firms in America are also being forced to close because it's not economically viable to run those operations anymore and US Or on a gas rig count fell another 29 To 369 that's a ninth straight week of double-digit declines in operational rinks in America And that means since mid-March when all of this really started kicking off on the pandemic on a global scale The rig count has dropped around 55% So big drop in supply and demand kind of gradually started to creep up again as we go through these phases of Loosening the lockdown and that's giving a bit of a bullish scenario for the moment for crude oil Okay final points Just to give you an update because we were talking about this yesterday You know the focus has been Wuhan South Korea and Germany Well on the German side after what was a pushback up to around nearly a thousand new cases the highest in five days yesterday We've had quite a record drop now So it continues to be quite up and down in these these cases at the moment I think the R-rate the reproduction rate of the virus in terms of its one person spread to Another multiple of other people. I think it's dropped to around point seven or point eight at the moment in Germany But they recorded a steep drop in a number of new corona virus cases The daily death toll fell to the lowest in four days and the infection rate declined. That was yesterday On the Brexit front, I actually think that this has zero bearing in terms of the price for today And I actually think this is Absolutely unsurprising they still remain firmly of the belief that they're not going to reach any type of deal At this point with the final summit coming up in June is those last round of key trade talks The current round finishes today Just to give you a flavor with where we're at at the moment the UK Reportedly is refusing to compromising key areas most notably the conditions that the EU wants the country to accept in return for a trade deal But also on fisheries the role of the blocks courts The EU and the UK fundamentally have different Interpretations of the way the withdrawal agreements protocol in Northern Ireland should be implemented That almost sounds like I'm a bit of a broken record Sounds like we've moved forward zero in terms of Brexit now Although the UK government has been resolute and Boris Johnson continues to say these quite bold statements You have to understand that this is purely political management You know he campaigned at the end of last year on delivering Brexit He cannot now backtrack on that but what he will do is blame of course The coronavirus has has caused them an inability to deliver these talks and so Personally, I think he will have no problem at all with now Requesting the extension in June to continue these talks then because remember Although the current phase of transition ends at the end of this year If he needs longer than that then he needs to make a decision by that June summit in order to then get the extra one Or two additional years for negotiation and just given what's happening economically with the The government's time and energy taken up with the pandemic response It would be absolutely expected that they're going to have to Reluctantly extend these talks of transition but politically I don't think that will damage Johnson at all because he'll be able to just pin it on to the onto COVID-19 So yeah, I don't think this is a big deal for now, but just I'll get you up to speed because we are Coming towards the end of this initial what was supposed to have been the delivery of the of Brexit Looking at the calendar for today a few things to look out for the German flash GDP numbers They're coming out later on this morning. This is for Q1, but remember this is Q1 data It's going to be negative, but you know kind of like what we saw in the UK earlier this week Yes, deep contraction, but it's Q2, which is going to be way more impacted by this current situation So yeah, it gets a little bit of a look in and some attention But I think the markets are fairly comfortable with the notion that these these contractions have begun in Q1 given the late March Reaction to the pandemic increasing in mainland Europe then moving on to the late morning You've got the flash estimate for Eurozone GDP as well as the flash employment readings So a couple things to look out for then in the US you've got retail sales today and remember last month in March We had a pretty record-breaking figure, but according to Reuters survey economists retail sales in the US today Will likely have collapsed by around 12% in the last month That would be the second biggest decline since the government started tracking the series in 1992 Retail sales fell 8.7% as you can see there Last month so things have basically got worse as you would expect April was kind of the trough if you like of the most impacted There is a range here of minus 20% to minus 4% And again a lot of people will be looking at this as to one of the key metrics or components for their model in order to Think about then how deeper contraction would be a printed in the second quarter Given you know the relevance of consumers and consumption as a driver of US economic growth This type of reading will give us a pretty good barometer to just how bad that contraction in Q2 will be Then you've got industrial production coming out cap utilizations after that you've got University, Michigan This is the preliminary reading from May so be interested to see just where sentiment lies and that respect And then you've got the Baker Hughes recount coming out later on that evening For equity index traders you do have the options expires across the various different index Contracts this morning. So just be aware of that as well. All right, that is it So as I said, don't forget to subscribe to the channel two new videos coming out this weekend And then I'll see you back on Monday. Any questions, of course, just leave a comment I'll be responding throughout the day. Otherwise, have a good session ahead. Have a great weekend. Thanks very much guys