 Absolutely. Right, good afternoon ladies and gentlemen. Welcome to this month's non-farm payrolls webinar on Friday the 5th of February 2016 and the first day of CMC Markets PLC because we IPO this morning. So it's a day for celebration and hopefully it'll be a profitable day for you guys on the currency market. First and foremost, I have to get the housekeeping out of the way. Risk warning just to basically say that none of what you hear today will be or can be construed as direct trading advice. What we'll try and do is try and give you an idea of direction but also key support and resistance levels and hopefully the likely destination for various currency pairs over the course of the next week or so. But certainly I think in the context of what we've seen over the past few days I think it's going to be a very, very interesting payrolls number and as such we could well see some significant movements. I think the theme for today has to be really US dollar weakness and the US dollar weakness that we've seen over the past two to three days. The biggest US dollar decline we've seen since 2009 and we're going to look at some of the reasons behind that but I think what we also want to look at is also what that means for say for example the Bank of Japan and also the European Central Bank because I think it's going to make it that much more difficult for them despite the fact they're pushing interest rate policy into negative territory especially if you're putting it into negative territory to devalue their currencies. So Colin, I know you've put an estimate of $225,000 for your payrolls number so you've gone high. I can explain that. Basically so I was the big outlier last month at $100K and totally had my head hand between me so I backed off a little bit from being downish. I still don't really believe that. I still find it hard to verify them that the US added that many jobs last month. I did suggest in my note we probably get a downward revision to last month but I've decided to come back a little bit closer seeing that the ADP was basically in line with or up a little bit a little above $200K and I figured okay well maybe we'll get the same sort of thing out of non-farm. I do think we'll get a bit of a downward revision to last month. The reason I've gone lower at $150K is because of the weak ISM employment components that we saw not only in the manufacturing sector on Monday but also the non-services sector or the non-manufacturing rather that we saw I think it was Wednesday. We saw four point moves lower in both employment components which suggests to me that there's a significant slowdown I think in hiring in January and also I think there's a seasonal factor involved because I think if you look at hiring in January seasonally there usually is quite a big drop-off in the pace of hiring in January because November and December are boosted quite significantly as a result of temporary hires, part-time hires in the lead-up to Thanksgiving and obviously Christmas. So this is the non-farm payrolls numbers for the last couple of months and this is the green column. So we've got $292K and $252K. If we go back to last year we had $329K and $423K so they were really, really, really big numbers and then in January we got $201K which was quite a significant slowdown and then in subsequent months we got a series of weekend numbers. Now obviously I think there were some weather factors involved in that. We did have that big storm in the U.S. in January and I think that could well also impact on hiring as well. Maybe that's going to get factored in. Maybe it isn't but I think the reasons why I've come in so low is really as a result of the weak readings in the ISM and also the fact that we did see significant storms on the Eastern Seaboard in January as well and that could have affected hiring patterns. It doesn't appear to have affected it that much on the ADP which is in the yellow column over here but we've still seen a significant drop-off over the course of the past few months and actually if you look at previous months in the ADP we did see some downward revisions so there's certainly a slowdown. A big question I think is really not only what the pace of jobs for growth is but I think also the average earnings numbers and these are obviously the key factors that Colin and I will be looking at. I've also put the Canadian employment numbers up there as well because I think they're going to be very, very important in the context of the direction of the Canadian dollar and those of you who attended the webinar that Colin and I did a couple of weeks ago we talked about the Canadian dollar bouncing back quite considerably didn't we Colin? It sure has and it sure did. That particular trade has really played out well so shall we start with that because I think that's probably going to prompt I think the biggest move in the markets. I'll just mention my Canadian jobs forecast while we're on this. As Michael noted, we do have a couple of things going on in Canada certainly the lower oil prices hit the oil patch again but the winter up here we didn't get hit with the storm that the US did and only a little bit in the Maritimes and it wasn't that big of a deal up here so we had a there was no and in fact the winter has actually been pretty nice for a change so that's actually could be positive for hiring in terms of that we do get the seasonal pullback I have calls for a decline in retrenching in per time jobs I think that will get made up by a bit of a bounce on the full time side so I've called for the 15th little bit above street here. Okay so I mean basically what we've got here is the daily chart now initially our analysis was based on the weekly and we talked about the bearish engulfing week which suggested that we're probably going to see a significant reversal that is in fact what we have seen we've also broken below this area of key supports around about here on the left hand side but we are approaching a very important uptrend line as well as the previous highs that we saw in the middle all towards the end of last year around about September, October so we've seen a significant down move we've seen a significant correction there's quite a long shadow on that particular candle there which does appear to suggest that maybe we are a little bit oversold the oscillator does appear to reflect that so certainly while I think the Canadian dollar is probably prone to further gains I think it's going to be very, very difficult given what we've seen over the past few days and the declines in the US dollar as to whether or not we see further Canadian dollar gains and dollar losses as we head into the weekend at a time where... On that no Michael? Oh sorry. On that no I was going to say we've got the oversold reading on dollar CAD we're also seeing a little over bar readings on Euro dollar and gold it's a theme we'll continue to go through over the next few minutes so what's important is we may get a trading reversal but if we do it's likely to be a short-term trading reversal that these are major long-term trend breaks that we've got going on here overall but because we've moved down so fast we could get a bit of a bounce for the US dollar short-term if the numbers good. Which brings us mainly on to Euro dollar we've seen a massive breakout here in Euro dollar this is a four hour chart and we broke higher after what is in an incessant sideways range over the course of the last couple of months but we've now broken out of it we've hit our minimum price objective of 112.5060 but that's not to say that we can't actually carry on going higher but again we're very very overbought on the four hour oscillators if we look at the daily chart we can see that we are starting a little bit over extended this is the last couple of days we could do and I think this is really in the context of what sort of number we're expecting I think if we get a good number and a good number I think is anything about 210 to 20 then we will see a dollar rebound and the dollar will basically send the Euro back down again and then what will happen is potentially on the downside we'll probably get support coming round about 110.80 and resistance at 112.6570 maybe 113 certainly if we look at the resistance level on this chart ladies and gentlemen we can basically see that we have seen a significant breakout and we've seen a significant break above some very very key levels but given that we're coming into the weekend we may find any further dollar losses caps around about 113 but certainly on the downside we could actually come all the way back to the 200 day moving average around about 110.80 and that's sort of around about this sort of area here on the four-hour chart where we are also very overbought and I think it's going to be a similar story also on Dolly Yen and Cable I don't know whether there's anything you want to add Colin just jump in if you feel that I've missed something out similar story I think we're right on the Euro the other one I watch for is on the Euro dollar is 111.11 interestingly enough it's a kind of almost a round number but it's also a Fibonacci level on a short term so we do see some action around there but that's the way we're looking at it it's likely we've been taking that from Colin are you taking it from these lows here around about January? yes it's a shorter term Fibonacci anyway the missing thing is that I agree with Michael what we're looking at here we're heading into the weekend we've had some big moves we could be primed for a bit of a reversal here but it is a trading one the trade change was on Wednesday and I think also we've got to remember we've got Janet Yellen speaking on Capitol Hill on Wednesday Thursday we've heard some what I would call fairly dovish rhetoric this week out of Fisher and Dudley these guys are both permanent voting members of the Federal Reserve Board therefore their word has a lot more weight because they're closer to Yellen and as such I think given the strength of the dollar given the really strong rebounds that we've seen in mining stocks this week on the back of the week of dollar I think we've seen a significant trend change and I think the dollar you know the breakouts happen I think we've topped out on the dollar and I think now it's about time for Cable to sort head back to around about 148, 150 and I think Euro dollar can go all the way back to 115, 116 I'm not saying today I'm talking about over the course of the next three or four weeks I think the bias has shifted and I think the bias shifted away from a stronger dollar to a weaker dollar the last thing the Fed wants is a stronger dollar and that's certainly borne out I think in terms of the commodity prices I'm going to quickly blast through these we'll cover the rest of everything else later after the payrolls numbers because we are running into a you know a bit of a countdown here we're looking at crude oil prices now Colin and I talked about this at our last webinar and in particular these bearish reversals that we saw here on the daily charts they were quite significant in signalling a rally we are finding a bit of resistance in crude oil around about $36, $36.20 but you know and that does keep the pressure on the downside but overall as long as we stay above this area of support on crude oil I think there's a good chance we may have seen a short to medium term base you hear an awful lot of narrative about $10 a barrel, $15, $20 a barrel I think that's overblown I think that's overblown and I also think when you start to hear that in the mainstream press that's time to sort of think about taking money off the table and looking for a bounce that's precisely what we've got unfortunately oil prices can be very unforgiving we saw a 9% move in oil prices higher the other day so it's a bit too rich for my blood but in terms of direction I think it's increasingly important in the context of the dollar story and it's a similar sort of the only thing we're missing is the Economist cover yes indeed and it's a similar sort of story in WTI as well fairly strong move we are looking a little bit overbought which does suggest that maybe we could see a bit of a pullback but I would be surprised if we make new loads on crude oil prices through the course of the next few weeks because I think simply speaking it's getting a bit of a crowded trade and it's not just about overcapacity now everyone knows that there's too much oil everyone knows that there's overcapacity in not just crude oil but metals it's out there it's out there everybody knows that we've come down from $80 a barrel we've come down from $100 a barrel how much is already in the price I could end up with a go over my face with respect to my prediction here and if so then I'll take it on the chin but ultimately I'm going with my gut instincts and Colin's been in this game for long enough to know 20 years, I've been in it over 20 years my gut feeling is that potentially everyone is talking the same way and sometimes you need to take a little bit of a step back and think well actually can we see lower prices yeah potentially we can but will we and on the balance of probabilities and a weaker dollar I think it's going to be much more difficult to make new lows in crude unless the dollar rebounds very very strongly so yeah I think we could level out around here because I had figured you know what by the end it was like yeah it could hit a certain level whether it's 25 or 20 or whatever but it probably won't stay there long and that's what ended up being the case because it's just gotten so washed out here and we have 25 seconds to go we do so basically if we get a number above 200,000 we should get a bit of a dollar rally keep an eye on Dolly N for that big support on Dolly N around about 116 if 116 goes all bets are off so if it's a bad number I would be surprised if we get a move much below 116 if it's a good number then I think we could get a rally back through 117.30 here we go numbers are out 151 and I get 150 oh my word look at that so that's a very poor dollar number so 116 we're going to have a look at 116 on Dolly N which really is the big big number and a revision higher is it higher or lower that's lower than the down about 30,000 so we did get the downward revision so we've got downward revision as well so and average earnings is 0.5 but look at the unemployment rate it's dropped to 4.9 and I would imagine the reason the unemployment rate has dropped to 4.9 is because the participation rate has dropped as well I need to check that on my Bloomberg so let's quickly look at that right now and no the participation rate has gone up so what about the U6 unemployment rate have we got that now it's still 9.9 so participation rate's unchanged unemployment rate has dropped to 4.9 but the payroll's number is disappointing and that reinforces the lower dollar narrative which means that Mrs. Yellen's speech next week is that much more than important which takes much more importance so let's have a quick look so it's a poor number we're pretty much expected that to be the case we should be dovish but given how far we've come we've got the spike lower in the dollar but I think it's going to be very unlikely that we'll get a follow through on the selling that we've seen already this week so here we are we've got a bit of a spike higher on Eurodollar but I think it's going to be very difficult for the market to sell off much more particularly with the weekend coming up and Yellen's speaking next week now that's not to say that we won't see further dollar losses but I think overall what we've seen today pretty much suggests to me that Yellen will probably be dovish next week and I'm just looking here Michael at the minute chart on the dollar index and it spiked down right on the news then it kind of spiked up and now it's just kind of unfolding just above where it was before the numbers came out so I think here we were even though we got a dovish number that just confirms to me the sell off we've already had and because we've gotten a little bit over extended on some markets it seems to me we're looking more at a pause here than continued declines but that's just for now maybe for a day or two while everybody waits to see what Yellen has to say I've just been asked should I buy Eurodollar then I wouldn't be buying Eurodollar here certainly not ahead of the weekend I think leading into the weekend we're going to see an awful lot more froth in the market between now and I think there will be better opportunities to buy Eurodollar but I certainly wouldn't be buying it at the highs of the week so for me I'd wait till next week see how it shakes out over the course of the next couple of days because I think as we head into Wednesday and Thursday Mrs Yellen is going to have some very interesting things to say about the direction of travel with respect to US rates and I think the unemployment rates drop to 4.9 but the fact of the matter is you look at what average earnings have done and you look at the unemployment rate you're going to get people who are going to spin that in a positive way to suggest that potentially a rate hike is still potentially on the table because what's been missing thus far wage growth average earnings rose 0.5% in the January numbers now I'm going to see what that does to the overall annual numbers and if I pull my Bloomberg over here ladies and gentlemen you can see what I'm talking about here so that is going to be if I can find it here we go 2.5% and 2.7% was revised higher for December so now we're starting to see wage growth but we've seen a poor payroll's number so you pay your money you take your choice Michael? Yes? Can we shift over to Indiesies for a minute because I want to talk about the US 30 because I'm watching this thing drop out of bed I'll talk a little bit to that. Sure, no problem at all so we're looking at the US 30 do you want me to look at a short-term chart on it? Sure, I pull up I'm looking at the one-minute chart and so what I wanted to mention here is that the things we've been watching for with news as it comes out over the last two months related to the Fed and related to stocks is that stocks are driven by two things one is expectations of earnings and how people feel about the economy and the other side is liquidity so today's news with a lower job number suggests that the Fed could hold off on raising interest rates keeping the easy money party going so that was good for liquidity but what are we seeing in stocks? We're actually seeing the Dow is broken it took out $16,390 and it's down to about $16,330 so it's actually falling on the news which is telling me that people on the stock side are more concerned about what does this mean for the prospects of market suggesting a little bit of softness in the U.S. economy could drag on earnings we've had weak guidance out of a lot of U.S. companies now what is going to take place longer term but it may take a quarter or so to sort out is if the U.S. dollar starts coming down all the companies that have been complaining about the high U.S. dollar might start to back off of it but that's part of the short term we're looking at the street on the stock side has been taking this as a bit of a negative hit here so we've got the U.S. 30 down, the S&P down and the NASDAQ falling on the news If it's chopping quite a lot of the moment the currencies I will be surprised if we see a significant move one way or the other in the wake of those numbers simply because we've seen fairly good earnings growth over the past couple of months but the payroll numbers have been disappointing and the market is going to be confused it's not really going to know what the Fed is going to take or place put greater emphasis on because they've been on about the fact that they haven't seen any payrolls growth they're now starting to see that but the payroll's numbers are starting to slow down so it's going to pull them in both directions but I think overall the underlying narrative does still remain the same and that is for a lower dollar the biggest question I think for me as a trader and an analyst do we get a pullback in Eurodollar do we get a pullback in cable and do we get a rally in Dolly Yen and for me at the moment I'm not 100% certain one way or the other so if I'm not certain I wait for the market to come to me and in that case what I will be looking for and I reiterated it earlier if Eurodollar drifts back down towards 111 then I might look to pick some up round about those sorts of levels I'll probably be very, very cautious and as far as cable's concerned 14480 is probably going to be a very nice support level as well as obviously this series of highs through here between 14410 and 14420 for pulling back because what this candle chart here is telling me if we look at the long shadows on these candles there does appear to be quite a bit of selling interest up around the Wahai 145s and 146s because it's not really holding on to the gains which suggests to me that there's not quite the impetus there yet for a renewed move higher in cable and obviously you can translate that across into Eurodollar as well so let's have a quick look at gold because I think gold is very, very important in this context because it's got a dovish thread and we're going to give gold prices a little bit of a pep so if we look at the gold price we can see again it's very, very overbought we've seen a very significant move higher or above the 200 day moving average that's significant and it's significant in the context of the last time that we saw a break above the 200 day moving average we weren't able to sustain it for more than two or three days this move here looks much more impulsive and as such I think even if we do see a little bit of weakness in gold prices I think we could well find support coming around about 1130, 1140 but overall we now look as if we're probably heading back towards these highs that we saw over here and actually let's draw in a nice little trend line here and we give us a bit of an indication as to where we could go to there we go we're bumping right against that upper line there so that's just to me that gold prices are probably a little bit overbought at the moment and could be vulnerable to a little bit of a pullback but as Colin and I have said on a number of instances in this particular webinar we've had some significant breakouts this week and I would expect them to continue over the course of the next few weeks absolutely and gold is looking a little overbought it is looking for like a bit of a pullback here some potential support initially around 1155 that was actually it broke out over earlier today and it's retested as the support so far is held we'll see if that continues actually through support off of the news has kicked in about 1154 so far if that starts to give way then we could see a bit of a trading corruption in Boulder a little bit deeper Okay so before we move on to other currencies is there anything ladies and gentlemen that you would like to specifically focus on that we haven't already covered because if not we'll move on to the UK100 because the thing what we've seen here is quite significant in the context of the overall moves that we've seen in the latter part of this week actually before I look at that Can we just do dollar CAD Oh sorry go ahead Michael here very briefly the same kind of thing as a number of other currencies that's had a big move down it's moving off in here around 13750 the on the news the softish Canadian jobs and the soft U.S. jobs dollar CAD spiked up for about 2 minutes up to 138 it's come back to where it was before it started so I think we are seeing that a lot of this news was probably already baked into the market but it's actually interesting we can more on the Canadian jobs reports so I think people are focused more on the U.S. one Yeah and you've also got this series of highs through here as you say around about 138 which it needs to get back through to suggest that we're going to see a broader correction a lot of it as you say is already baked in and I think an awful lot of people will now be looking to see what Yellen has to say next week but I was going to look at some mining stocks because I think the mining story is a very, very big story in this turn around certainly in the context of say for example Anglo American well we've seen some massive gains this week I mean if we look at Anglo American it's still down 70% over the course of the last 12 months but if we look at what's happened over the last few days here I mean we've seen a 30% rebound well actually it's been more than that 50% rebound in the stock price of Anglo American from the lows that we saw in the middle of January and we're higher again today by quite some distance and I think all of this is on the back of a weakening in the US dollar so if we look at this from a technical standpoint there's been an awful lot of what I would call turn around in terms of commodity stocks which have been absolutely battered over the course of the last two years similar sort of story I think if you look at the Chilean copper and gold miner sorry about that that's one of my comparison charts just bring up the ordinary chart again a similar sort of story here we've broken above some very key resistance levels which was previous support in the past week or so and that's just to me a significant turn around in settlement particularly with respect to the commodity space have we seen a low if we look at copper prices sometimes they're a good bellweather and again we've seen a bit of a rebound looks a little bit overbought at the moment and what I would like to see there I think to confirm these mining sector breakouts is a break back through those peaks that we saw in December to suggest that potentially our base is in copper prices but certainly the direction of travel there does appear to be suggested not in the short term we could drift back lower again but certainly I don't think we're probably going to see I don't think we're going to see any significant losses strong losses over the course and new lows over the course of the next few sessions okay so anything else ladies and gents we have a question here about the impact of US dollar on US transports okay go on I'll let you answer that one young man alright so we have the impact of you and the question here from Steve is the impact of the US dollar on the US transport index which is trying on Thursday for a near horizontal breakout for the January and February period so we don't have we don't actually have the US transports on our platform but we do have perhaps we could take a look at one of the railroads why don't we bring up Union Pacific as an example yeah Mike will certainly do that or Burlington Santa Fe yeah Burlington would be fine because those are the ones we want to look at the companies like the FedEx the Burlington let's try FedEx Union Pacific there we go there we go and get rid of that I mean overall you would overall lower lower fill prices should be fantastic for transportation companies that's one of their biggest cause this should be a huge time for them the higher US dollar it depends on I guess the impact on transportation but we've got the US economy itself has been doing reasonably well a lot of the weakness has been overseas interestingly enough for transportation and shipping and things with the actual miss that Amazon had a couple of weeks ago did kind of surprise me because everything from them had looked like they were setting up to do amazing and of course they're a huge distribution and shipping company as well big big customer of the couriers and so on but look at this though this is an awfully nice turn up for Union Pacific here so we have the low oil prices I mean oil prices I think are still going to remain relatively low even if we went back up to 40 that's not going to impact them too much I didn't think it was going to stay at 25 anyways but if you're in this 30-40 range it should be generally positive for them if the US economy holds up that should also continue to be positive for them as well those are the two forces we're looking at here strength of the US economy so in fact a little bit of a weakening in the US dollar should actually help them even if fuel prices come back up enough it should help to up the US economy a little bit because one of the biggest complaints we've been getting from companies was the impact of the higher US dollar so if that drag goes away a little bit that should generally help the sector so we're seeing you Michael's putting been kind enough to put up the UPS chart here that's quite a rally up off the bottom and even the Union Pacific upturn as well as helping so generally speaking it should look reasonably positive for transportation companies is going forward on the commercial side certainly what we do need to see is I think from here we need to see recovery back above the long-term moving average 200-day moving average we look as if we are heading back towards that and certainly there's been a big correction lower on Union Pacific so there's certainly I think more room to go there but we need one other thing with that would be commodity prices as well certainly there are big shippers on the railroad side there's certainly all big shippers of commodities too while we're at it let's look at the DAX because the DAX is a massive key support level on the daily and weekly charts 9,300 we can see it here these series of lows over the course of the last few months here, here, here and here it is looking a little bit floppy at the moment and a high euro will not help the DAX so if euro goes back to 115 then I think it's very likely that you could see it's very difficult for the DAX to make any significant inroads higher but more importantly if we look at the 200-week moving average as well and the long-term moving average we are heading back towards that as well so 9,300 I think is going to be a very, very key level over the course of the next few days and if we break below that then you could see a very nasty correction in the German DAX so keep an eye on the German DAX keep an eye on the euro dollar if euro dollar starts to wedge back up again then we could well see downward pressure exacerbate on the DAX I'm being asked about Royal Dutch Shell so let's go and look at Royal Dutch Shell because I covered that the other day so we'll go to my energy watch list and go to Royal Dutch Shell B shares and look at the chart here and again here we've seen a decent rebound from the lows that we saw in early January admit to early January for me here we need to get back through this series of levels through here let's get rid of this line here and I work on a very basic premise support and resistance, resistance and support in their roles. For me I think if I want to get some conviction that we've seen the lows in Royal Dutch Shell we need to get back above £16 and get back to this 200 day moving average looking at the long-term trend you don't need to be a genius to work out that this trend here is pretty much well established we do need to get back and retest this series of highs through here so momentum does appear to be in Shell's favour is this potentially an inverse head and shoulders in the making with the left shoulder here the head here are we going to form a right shoulder over here if we do form a right shoulder then what I would expect is for any pull backs to not take out this line here, 1423 so what will happen potential head and shoulders reversal plays out there's a nice island gap there, it's a good spot especially there so you've got an island reversal as well which is a nice little island gap and then there's a little bit of a gap there as well but I think we could well trade between these two levels here as long as we don't take out this low around about 1423 then potentially we could see a bit of a reversal and obviously the BG group deal has gone through or in the process of going through certainly Shell appears to be in a much better place to rebound the current price structure than say for example BP okay so that's Shell I hope that was informative for you, are there any other questions okay right if you do have any other questions that you can't think of at the moment but suddenly occur to you later contact over myself or Colin on Twitter where I'm at M. Houston underscore C.M.C. Colin is C.Cizinski underscore C.M.C. thank you very much for your attendance and your feedback I hope you found it useful we are recording this so you can listen to it back if you so wish otherwise thanks very much for listening and we will talk to you all again next month, four weeks today actually nicely it won't be because it's a leap year this year isn't it it won't quite be four weeks but it will be pretty much close to it thanks Michael and have a great day treating everybody cheers thank you guys