 Okay, very good morning to everyone Tuesday 3rd of March Anthony here good to be back and Going to talk over a couple of key things to it to think about for the session ahead Then as per the normal routine Sam will come on and look at the markets for a more technical perspective but obviously I was out of the office on Friday and yesterday, and I just wanted to have a bit of a Stocktake on things a look at a few different Areas as well of things to be aware of because we've had an almighty ride over the last week or so And I know Sam did a good job putting this into perspective on Monday But I just wanted to reshare and kick things off with this graphic again Because it will probably help make a little bit more sense at why we had a somewhat 1300 point bounce and a dowel Yesterday was because if you actually look at the severity of the sell-off on the week-on-week change in the S&P from last week There's only been a Handful in fact five occasions where we've sold off more than what we did last week The financial crisis the dot-com bubble black Monday in the 80s Hitler invading France and The Great Depression itself So, you know context looking at historical size of price movement last week was fairly Unprecedented in the sense that you know, this is looking at pretty much hundred years worth of price activity And you're talking about you know monumental Historical events of when the last time the market have moved so much So a little bit of a bounce from those loads certainly was of the order yesterday And this is just a look at the major US equity gauges all climbing 4% or more It's first time that's happened looking on this graphic here on Bloomberg going back since December of 2018 and you'll remember what happened in December 2018 that was when the market was getting hammered through Q4 kind of a process of fears about synchronized tightening at that point of Global central banks in terms of the rate policy with the escalation in the trade war saw that big shakeout in the market however, soon as the Fed kind of said they're going to stand pat and China started opening up the various arsenal of fiscal and monetary responses Markets smite back aggressively and so similar type price activity of which what we saw yesterday in step with that as you Would expect oil as well What moving in tandem with that move and Reversing some of the significant losses. I mean I did see that price chart. So as we'd been looking at for a number of weeks There was kind of that key Threshold in oil that we saw breached last week, of course, which was kind of just around that $50 level that kind of summer of 2019 low as soon as that broke you saw that run down in price what we had Last week so a bit of a bounce. We're trading up about a dollar at the moment just short of the $48 handle With the DAX already up in the futures about 175 just taking the lead from the the positive close obviously on Wall Street and the feed through into the Asia-Pacific session one of the things that people are looking at this morning is this talk about the G7 and There was quite a lot of whispers at the end of last week about some kind of Coordinated central bank Response just given as I've said the the historical Size of that sell-off that we are seeing was phenomenally large and it's very rare that you see such persistent selling And really and certainly my career the only time I can remember that was in the depths of the financial crisis And when you do get a run on markets like that Typically, it's it's born out of fear more than anything else I think that certainly is what grip markets last week But what's helping some of that bounce and what's going to be quite key going forward as to now Today and also the rest of this week is what of the G7 got to say now the last time that there was from a central banks point of view a Global coordinated rate cut I do remember it quite vividly because I remember I was covering the US desk at the time in my previous job and This was back in March of 2011 And you'll remember March 2011 was a really big year or big period for markets because that was when that Catastrophic earthquake hit the northern part of the Fukushima And that then caused massive devastation at the time big market movement And so in an attempt to ward off any economic downturn from that event We saw a synchronized simultaneous global interest rate cut so included the likes of not just the BOJ But the ECB the Fed the BOE the SNB everyone else as well. So that type of thing as I said is Incredibly uncommon And one thing obviously people have been looking at is I don't think you're gonna see I think the likelihood of a Synchronized move all at the same moment in time back in 2011 when they did that It wasn't as part of any type of meeting They just all did it at the same time and if I remember rightly it was around midday London time Talking of midday. Well, that's when the G7 are gonna be meeting. So the G7 finance ministers basically and The heads of central banks are gonna be meeting today on a teleconference call Now this report is suggesting that drafting a statement on how they plan to soften the global economic hits of the coronavirus But importantly and not yet making specific calls for new government spending or Coordinated central bank rate cuts according to a G7 official this of course comes after the likes of The ECB Christine Lagarde late yesterday Said the outbreak is a fast-developing situation Which creates risks for the economic outlook and the functioning of financial markets She said we stand ready to take appropriate measures and targeted measures as necessary To help address these underlying risks So a lot of that yesterday from Lagarde and if we were to look at this as well I was looking at the Fed watch tool Don't ask me why but on my day off and One of the things here once it loads up that I thought was I Still can't quite get my head around it, but you know, you can't fight what markets are pricing Markets are 100% priced for a 50 basis point 50 basis point not 25 rate cut from the Fed in about 15 dates and So all of this again as I was saying is this idea that they're gonna take a proactive Coordinated some type of approach. However overnight what I think might be a little bit of disappointment from this Reuters exclusive Is that according to these sources? They are not yet going to make specific calls for new fiscal and monetary responses If that is the case well does a little bit of that Relief if you like from yesterday just fade a little bit yet to be seen 12 o'clock London time is when this is going to be happening So 6 a.m. In the morning in Chicago 7 a.m. In New York if you're watching it from the other side of the pond so Key thing to look out for One of the things though we've already had is the RBA the Australian Central Bank They have come out overnight and they've cut interest rates to 0.5 percent Low the governor says the government's to assist most affected parts of the economy Difficult to know how large or long-lasting the impact will be so very much the virus Right Square Center given around a third of all of the exports that come out of Australia go to China if they've been significantly hit economically that's gonna reverberate and impact Australia directly That as well in context of the already Weak economy and this was even before the bushfires which are also going to have a meaningful effect as well. So First of the big ones you could say of the major central banks to lead the way and the RBA have cut But they've only really got about room for one more Until they're pretty much at the lower bound and then they're going to have to start looking at things like QE Which they've not gone into before So this is one of the biggest I Guess frictions within the various different councils on the central bank level is Interest rates already really phenomenally low Exing out the Fed Then if you look at the lights the BOJ and the ECB there really isn't a lot of wiggle room So I would suggest there's probably quite a lot of resistance to taking any immediate type of action at this point Remember how central banks operate they've kind of hinted Almost verbally intonated towards policy action and the market responded yesterday as long as they can keep that response going Less a need then to take real physical impact So I think perhaps the strategy might be that by calling this teleconference with the G7 Finance ministers with all of the heads of central banks gives this the market a sign that these powers that be are Being proactive they are willing to active needed and is that enough in itself? To alleviate the pressures and the nervousness in markets to cultivate a bit of recovery if it is then I don't think that you're Going to see this kind of cross the board Coordinated action and that's not to say as well the thing I was talking about in my weekly piece on Sunday night If you did read it was about this idea that there's a lot of politics to manage as well and to think that a fiscal Kind of silver bullet is going to be forthcoming I think is a little bit wishful thinking when there's other narratives and objectives to manage in a lot of these political Situations in the likes of the US and and elsewhere and some of the mainland European countries as well One thing that I thought was quite interesting from the news this morning was this this was a Bloomberg report and it was talking about hedge funds and It was basically saying and obviously this would be You know that the idea or the analogy of trying to catch a falling knife But the data suggests that hedge funds kept buying the dip in stocks Towards the end of last week despite the large route that we had Hedge funds that make both bullish and bearish equity bets bought the dip last week as markets plunged into a correction fund managers were net buyers of airlines Hotels and restaurant stocks if you remember those three specifically out of three that have really been hurt on the back of the Corona virus induced selling that we've seen you know, particularly the airliners that the whole The kind of containment areas that have been put on lockdown the fearfulness of then further Transmission of the virus has meant that those sectors have been beaten down Badly, which does that add value and there's calling to these hedge funds It does so, you know quite an underlying interesting thing being observed there from the the real money in the market Just quickly going back to OPEC not forgetting as well not only have you got this g7 Conference call happening at midday today. You've got the OPEC meeting happening on Thursday and Friday Now to give you a flavor of what to expect from that meeting all but 29 of the analyst surveyed so an overwhelming majority Predict that OPEC and its allies will announce new curbs with an average expectation of 750,000 per day additional cut to their production quotas So that number has gone a little north as I guess people are expecting that really they've got to go with a little bit of a Further or deeper cut them before when it was talked about at 600,000 remember when we initially got close to threaten that $50 level a few weeks ago They said about 600,000 cut at their technical meeting markets bounced now They got to do more Otherwise the market will be disappointed and it's not going to be a self-defeating move because if the markets are disappointing They're still cutting production and they put their back against the wall So they've either got to go kind of go big or go home in some respect anything short 750 There's going to be a bearish probably outcome for oil Anything north of that a million plus we'd probably get a little bit of an initial kick higher How long lasting those questionable because ultimately as we're going to see in forthcoming economic data It's probably going to show that consumption is going to dwindle over the course of the coming months as the hopes of a v-shaped recovery are probably a little bit of wishful thinking particularly giving how Shockingly bad that Chinese PMI data was I'm sure you saw at the weekend The other thing I wanted to mention before I give you to Sam is this Today is super Tuesday a quick overview of what does this mean? I don't want to talk about it too much because the coronavirus and the ensuing sentiment Implications on that is still the main story However, you're probably going to see a lot of headlines on this later today and certainly tomorrow So the reason why it's so important is this is a map of the United States of America 14 states will vote today super Tuesday now If you think about it, what have we had so far? We've had these other area Caucasus we had Iowa, which was a surprising win for Pete Buttigieg We then had New Hampshire where Bernie Sanders performed well And what have we had and why is this important? Well, if you think about not just the number of 14 states, but you get the kind of super states i.e. California and Texas specifically now a couple things to think about Super Tuesday accounts for about one more than one-third of voters who elect their delegates And so if you perform particularly well today Then that again Surprises of pretty much the bulk of then getting your the nod to be the Democratic Representative going forward for the president presidential election at the end of the year now a couple of things Biden who was looking Really bad only a few weeks ago. He was severely lacking In the polls has made a sharp comeback and why is that well? He's taken a bit of boost because Klobuchar and Buttigieg have both pulled out of the race now one thing I was talking about in my kind of weekly strategy piece about two Three weeks ago was the fact that you have a very Splintered center in the Democratic Party which meant by default then Bernie Sanders was taking a lot of gains out of the fact that the centrist vote was split Meaning that there was no credible backing for one candidate to go against Sanders. What's happening now is Klobuchar and Buttigieg pulling out they've now both backed Biden And that's a big game changer actually for what could happen today now looking at this Here are the polls looking ahead of Super Tuesday and you can see Bernie Sanders still well ahead, but just check out California and Texas the two major areas that will be under the spotlight today and look at Biden Biden's taking a sharp blip on the upside to now move into second where pretty much he was more like fifth place before and This is because now it's almost a strategic move from those more Center type of politicians in order to back a more credible candidate in Biden He's probably got a better chance when then going against Bernie Sanders when you look talking about particularly older voters In the Democratic Party now. What does this mean? Well? Biden is probably the worst case for Sanders Obviously a well-established and well-known politician and you can see as these latest moves have happened The bookies odds have narrowed Sanders taking a hit and Biden jumping So we're seeing the two drawing in towards each other Whereas check out Mike Pence and this is a really great strategic move From the the kind of marketing master, which is Donald Trump, of course So you probably would have heard that Donald Trump has nominated Mike Pence as the coronas are that pretty much is Like a poison chalice because now if you're Donald Trump think about the strategy if coronavirus Becomes an issue and grows Let's say numbers of confirmed cases and deaths in the US increase. Well, it's not my fault It's Mike's fault. So I'm sorry Mike You got to take a hit for the team and so this is an absolute stroke of genius from Trump He's basically just laid it on Mike Pence's Table and I'm unfortunately Mike is gonna have to take the hit on this one for the benefit then of Trump Disassociating himself already for many virus, you know, this is what Trump is Extraordinarily good at is trying to pass on the blame The other thing of course is the blame on the Federal Reserve and this was some of Trump's tweets He was tweeting actively only a short while ago and who was he tweeting about? Australian Central Bank, of course He said the RBA of cut interest rates stated It would most likely further ease in order to make up for China's coronavirus situation and slow down They reduced to a record low other countries are doing the same if not more Whereas our Federal Reserve has us paying higher rates than many others where we should pay less and then he finishes here Jerome Powell Led the Federal Reserve has called it wrong from day one. It's sad So again Trump being particularly active where he's putting himself Strategically in a position where it's win-win for market recovers All good if it doesn't it's powers for if the virus then Slows down the US economy. It's Mike Pence's fault Trump wins So, you know, what does this mean for intraday markets very little? But I just wanted to show you that you know at the moment Trump in my mind It's still looking a rock solid in order to capture a second term at this point And that is even irrespective of whatever Super Tuesday throws out But just keep an eye out for for Biden tonight. It's really Biden and Sanders and so let's see whether the backing of that more credible candidate or let's say Let's say credible. Let's say more established candidate in Biden makes it makes a difference to then try to Bite into Sanders's lead. All right a quick look at the calendar for today. What have we got? So this morning you've got the UK construction PMI coming out You've then got the Eurozone flash CPI that will be a watched number however Midday is probably gonna be a big one. That's when the call begins now Haven't read too many other details other than that But what I would say is that you want to be vigilant Probably from midday till one and that would be any outcome of that meeting that starts to get leaked via financial news Services like Reuters or Bloomberg, but also via Twitter any noises that come out of that and the way to kind of think about it is My base case scenario, I don't think they're gonna talk about any Specific details the question is does that disappoint markets after the strong bounce from yesterday or not? I don't think it will a great deal because I don't think you can expect them to really commit to too much at this point But the fact that they are talking and having these discussions I think is positive enough so let's see how that plays out And I think the technicals and what Sam has to say are gonna be quite key to playing out today This afternoon from the US session not too much in major data. You've got the API of infantry later on tonight as usual a couple of speeches Banking there's outgoing governor Carney does speak but really not too interested in what he has to say now obviously Andrew Bailey is the main man And then this afternoon and this evening a couple of speakers for the Fed not until much later Feds Mester and feds Evans. All right, gonna leave it at that. Let Sam come on. Wish you guys a good day ahead. Thanks very much Hi guys. Good morning. We all had a good Monday. Is the recovery on oil up to 48 bucks? I saw this morning Dow up nearly 200 points as of trade right now and just testing the high that we had overnight yesterday as well dollar just recovering a touch after Getting hit yesterday in an early trade throughout that morning. So a quick look over at the S&P just to begin with is this level we're Testing now 31 hundred obviously the handle but also the low that we had back on Stays that the the 26th the higher the next day the higher of overnight I mean that's a pretty important level and a good line in the sand really, you know I know I used that word a lot, but if we can get through there It's a technical point of view what I was saying yesterday that you know, you know press can lead sentiment No better guide if we're above there Well a little argument before any fundamentals come into play where you would say the bulls have won that But one two three tests now. We're holding up. They're pretty pretty perfect to the downside 30 50 The low of the morning along with yesterday's original high around 3 30 Going to be an important level so 30 37 and then 13 points above that It's going to be a zone to the downside I would say you'd want to keep an eye on I guess we've moved like this as well probably worth getting on the The fibs from the previous all-time high if you're that way inclined Just have a quick look where we're trading on that the 50% just a bit above there as well Went through the the 3.8 to as if it wasn't there I think that gives you enough reason to perhaps remove those on for now but keep an eye on This whole level as we're going through the morning and of course if we do get through just be aware that There are a few levels just a bit above there from those previous days most notably on the 27th and 26th as well Obviously big ranges yesterday in markets. I think the Dow the bottom that we had in early trade yesterday morning To the highest price to get my maths tested here. It's almost 2,000 points, which is Just bizarre But have a look at this level as well here. It's exactly the same It's your lines in the sand that you need to have on breaks of that well done to the bulls if it's held The bears have got a small victory and you could look towards those lows of the day But at the moment testing that just have a quick look over at Europe just to to get a guide Perhaps what may happen the DAX has exactly this is Find a more correlated market in the world right now than then what or scenario than what's going on right right now You can see yesterday's high. There's the low there If we can get above there and close above you've got to imagine the US equities are also going to be doing the same thing Not to say that they're completely out the woods. Of course. There's quite a lot of resistances a bit above I'd like to look at this low the 26th in the DAX as a potential place where people could Look to take profit as well oil You know I'd you could argue I mean people that you know We're brave enough to take on the the oil long yesterday fair play to you I mean, you know, you're in a position now where you know, it's we're not gonna spike you out Off any sort of OPEC headlines and you could be pretty comfortable probably making this risk-free now and The thing is you could hold this. I mean, I remember I was saying last week just about the 5050 level and You know my longer-term bias of a trade if we can get above there is that we can get towards $60 So I'm happy to be be late and it just happens that would be seven dollars late on this trade But I'd write, you know, I didn't trade yesterday At all didn't really want to get involved in the first day of the week after what last week was and that's absolutely fine For me and for oil. I'm only really interested if we can get back above that point However, a couple key levels to be aware of just on the R1 today You've got a little breakdown area from the 26th and then the highs of the 27th evening, you know mark that up Around 49 bucks as well to the downside pretty much the low that we just made you can see was yesterday's original high As well. So there are, you know, some very key support resistance levels that are being respected very well Yesterday's original high then was the low that we had yesterday Evening as well so very technical these markets even though driven overall by fundamentally what's going on You can just see how well respected these levels are Just like you saw yesterday evening and then again this morning on all equities as well Moving over to currencies have a quick look at the dollar which put this on to the daily chart You can just see how how strong that's gonna remove the pivots there how strong that recent push was to the upside I mean this time. Yes there was talking about how I'd bite your arm off for for this level here in the euro We are now just a bit below that is that going to be the false breakout? I guess it will be interesting to see where we finish the day There'll best certainly be arguments there to say that this is now an opportunity to get short and Potentially looking for us to drift back down towards 110 as well If we bring in the the trend channel that is sort of guided price Or be it roughly with a few false breakouts. Let's have a quick look to see how now that is traded It's it's choppy. It's choppy, but certainly An area now where the bears will start to get interested again I think for for this trader. Let me just put the pivots back on to You know potentially for later on what you could perhaps want to see is a clean break of this zone So obviously there's going to be a lot of support around there to then come back to it For that to be a resistance level to target. Yeah one 11 the handle and then some of these lows from before but the you know the Bulls, you know like the look of it where we finished yesterday was it was relatively, you know above this level will be it just Could be an opportunity for them to get in however. I do prefer that we start to now just drift down a bit For the euro pound Let's put that on that that daily chart It's It's certainly battling around all these levels, isn't it? I mean we we've saying yes say how that low that we made is this down the opportunity to get in for a more medium-term position I would be happy to you know what I was saying We'd be happy to be in that with the stop just below if it goes below there Realistically it's it has then got the legs to run down to the 126 area So I think from a risk-reward perspective. It's it's pretty nice stop just below the 127 Initially targeting up to 129 this area that we had a support and if that goes and fantastic We can get a bit of a push through Ultimately with this week with the the brexit comments Gonna be firing on all cylinders. It could be one that gets stopped out before it eventually works anyway Which would be frustrating for those that prefer perhaps the opportunity to get sure and look for those breaks There's gonna be a couple of trend lines that are starting to appear You can see here almost making that third test of that from the low that we had from yesterday So keep a watch on that of course if that breaks through we can get a further run down and start testing those lows that we had From the end of last month as well bit of UK data out this morning expected under 50 fine I'm not really expecting too much The reaction from that to be honest to the upside when I start to get excited again. Well We couldn't quite break above the 120 808 level and you can see the importance of this yesterday If we're above it we find support for the push high if we're below it and fail test and the bears take over So keep a watch on that. I think that's you know important enough and also the R1 yesterday evenings Afternoon high as well before a really key level which around that 128 70 Which I would say is that first real target to look for from a medium-term point of view gold Little recovery this morning from the the lows that we made last Last night, but it was relatively range band to her compared to a lot of the the markets I wouldn't be surprised to see us drift higher Over the course of the week to wars this 16 20 Level and I think that's going to be very key to see overall how no gold does go So central banks are going to be ultimately dovish today and even more so this week Then gold could be that opportunity for us to see a move towards that level And then you're gonna get there's people looking at this from Well, it's such a good support till we broke down Friday. What's the reaction that we're gonna get from there? It could argue we're just getting squeezed in for now, but I would just wait for you know the The move to come later on the news to filter through you can just see here It's not the best in the world But we are just getting squeezed from both directions and probably worth having that on for now Just to see how we we pan out Quick look over at equities which are just testing that level now. Can we get the close above there? That's something, you know really going to want to focus on the Dow just trying to get above The DAX not far from its level S&P or imagine following the Dow and is yet testing that now Key levels being tested here in equities if we can get a push above it looks like the fools might have just done enough to to see the lows Well, I guess until midday Hope you all have a good trading day any questions as usual, please do let us know in the in the chat But if I don't speak to you, I'll catch you all later on