 Okay, very good morning. I hope everyone had a great weekend Monday 16th of September Obviously by now you've probably heard of the big news over the weekend and the market reaction last night when Electronic trade got underway on globe X where we saw WTI and Brent spike biggest intraday moves ever I think an initial open when I was watching it was about 15 and 20% respectively at the initial opening price So of course gonna have a look what exactly happened the roundup of the attack on The Saudi Aramco infrastructure in Saudi Arabia. How has that impacted markets this morning? And then obviously Monday morning. We've got to discuss not only that but what's on the agenda for the week ahead We've already had some interesting Chinese data, which was weak overnight Further kind of accelerating the economic downturn apparent in their economy But for the moment Continuing to increase then expectations remaining high that the Chinese authorities will need to step in and counteract that And then throughout the week, we've got some obviously interesting events the headline of course other than this developing geopolitical renewed risk on the table is that of the FMC interest rate decision that of course is coming on Wednesday night We'll be covering that the team and I on YouTube live for that event. So do join us We'll kick that off at 6 30 ahead of the event at seven and of course Given we're in September. There is updated dot plots. It's the summary of economic projections with the press conference and Definitely going to be an important event for markets. That's on Wednesday We've also got the Bank of England on Thursday But ultimately not really going to see too much from them Not a great deal that they can do without any clarity around particularly this Unknown quantity which is the deadline as it remains at the moment Even though law has been changed on October 31st as we're going to discuss Boris Johnson still threatening that he will Not adhere to that request and he will not ask for an extension. He is meeting with Jean-Claude Juncker today So we'll circle back to the calendar At the end and have a bit of a recap before I hand you over to Sam But let's get straight into the charts this morning and Cross-asset class impact to the situation that's happened in Saudi Arabia So, let me just quickly show you the oil chart and some of the others first and then we'll go through all of the headlines So this is the big spike up. We had WTI crude futures last night So obviously this was Friday's closing price closed at 54 82 we reopened at 61 48 so, you know decent $7 bounce High volatility at the open obviously this happened actually on Saturday So everyone was informed about the news knew it was going to be a bullish signal Sam and I were actually talking though first thing this morning and Obviously we were we were over both of us in in Tuscany at the weekend So unfortunately, we weren't able to really Do too much given the fact we got back quite late last night But what we thought would be particularly interesting was a lot of people might as well got quite badly hurt You know just blindly getting long at the open Almost too late and you can see here. I know Sam will go over the technicals With a lot more detail, but we came up to a real quite clear technical point Coming up to the kind of June low of 2018 the high point of resistance. We had in May of earlier this year and I'd just be The high volume because it would have drawn a lot of attention, but also Potentially going into a little bit of a liquid situation It was a Japanese holiday respect for the aged day overnight so their markets closed Which might as well is just exacerbated conditions that made it a little bit more tricky So it's not always quite as one dimensional As just trying to just jump in and get long because as you can see from the initial high point that we've seen overnight Well, let's go back to the 60 minute. We actually got a intraday higher 63 35 From an opening price of 6148 so you kind of decent kind of two dollar rally before then you know quite a decent pullback And we're pressing now down to a 59 dollar handle Which would be you know a good three four and a half dollar reversal from that initial intraday high seen overnight so certainly You know you need to be I guess quite agile overnight if you're looking to take on those those types of situations impact across asset classes though because this does heighten obviously geopolitical risk in the Middle East In in the Persian Gulf given any type of military response or at least threat of coming out of the US in particular Donald Trump and so typical flight to quality moves gold bottom Excuse me gold bottom right capping up slightly Gold top right doing the same. Excuse me as t-notes bottom right capping up gold doing the same Gold remaining up about $10 at this point equities and gapping lower and FX markets pretty unmoved in response to how much the other assets did Move in the overnight session. However one thing to be clear of here Given oil already kind of giving back some of that initial move the equity markets also in kind Reversing from the initial pressure seen overnight And likewise in the 10-year and gold so it's not like a runaway move Definitely it was an overnight trade if you were part of it I think now looking for a continuation of that you can see is already It's kind of run its course almost in terms of the DAX we've already got above the opening high point in the futures Now potentially a gap fill would take us up to around the pivot if we were to get up there today So quick look at the headlines. What exactly did happen? Well oil jumps most on record after attack cuts Saudi Arabian supply So it was the biggest ever intraday jump after as you can see here It's going to impact about 5.7 million barrels now. This is of country Which are you produces just under 10 million so talking about half of the country's supply? And this is of course the third largest oil produced in the world after America and Russia And it does mean that at 5.7 million barrels per day being impacted. That's about 5% of global crude So when you put it in those terms Hence the reason why you get such an aggressive reaction in markets at the recommencement of trade overnight It happened on Saturday After 10 unmanned aerial vehicles struck the world's biggest crude process pressing Excuse me processing facility that one singular facility accounts for 50% of all soundly supply in fact And also there were attacks on the Kingdom's second biggest oil field Also just seen headlines a few moments ago. The Houthi military spokesman has said Saudi Arabia Saudi Aramco plants are still a target and is warning both companies and foreigners that Saudi should stop their aggression and blockade on Yemen And obviously this of course is that ongoing proxy war From Houthi backed Iranian rebels via Yemen and Syria and so on That's causing this friction to escalate at the moment Now a few other points that we can go through Going to this chart here. How bad actually bad is this disruption? Well, here's a graphic that might make a little bit more sense in terms of historical precedence For oil markets, it's the single worst sudden disruption ever at 5.7 million So passing the loss of Kuwaiti and Iraqi petroleum, which would be going back All the way you can see here the Iranian Revolution Was back in the late 70s the Israeli war on the oil embargo in the early 70s then going back to the invasion the Iraqi invasion of Kuwait in the 90s in terms of that rural specific region as well, so Yeah, definitely a really surprising event. Obviously we'd seen threats of And gradual escalation to the point of where a drone was shot down US military drone Obviously in contested waters capturing of vessels in the Straits of Hamoos But I don't think anyone was really quite expecting this quite dramatic event to unfold in such a way like this Importantly Saudi Arabia According to people familiar with the matter because importantly Saudi Arabia have not made official comment as yet They've said they can restart a significant volume of the halted oil production within days But needs weeks to restore full output capacity So I do think that's an important point obviously how quickly can they get these facilities back online is going to be quite key now from a US perspective obviously Donald Trump And obviously interesting from a timing point of view He was tweeting. I think it was about seven minutes before the futures reopening last night So definitely looking he knows oil is going to spike higher oil prices is obviously counterintuitive for what his political narrative is which is he wants to Control that price at the pump for the consumer particularly going into an election year in 2020 So he came out and first of all talking about you know pinning responsibility Well, he said Saudi Arabia all-supply was attacked There is reason to believe that we know the culprit and importantly he said we are locked and loaded Depending on verification But are waiting to hear from the kingdom as to who they believe was the cause of this attack We're under what terms we would then proceed That was from the president But if you check out what Secretary Pompeo said he said Tehran is behind nearly a hundred attacks on Saudi Arabia while President Rouhani and Zarif pretend to engage in diplomacy Amid all the talks for de-escalation Iran has now launched an unprecedented attack on the world's energy supply There is no evidence the attacks came from Yemen. So Absolutely, there is no doubt in his mind who this has come from and if anything Trump has been a little bit more diplomatic this time despite using the words locked and loaded so again This helps fuel that initial move and reaction Interesting reports though this morning We're kind of saying Trump's in a little bit of a lose-lose situation here Because if he goes into some sort of military engagement, that's going to be very costly Could be quite damaging as well for popularity Going into this election period to come over the next 18 months or so But if he doesn't engage does that mean Tehran will think that they've got impunity and they can just continue to Cause such disruptions which is going to threat that oil prices can continue to go higher. So That's why I think Donald's been a little bit more delicate here with how to respond Letting someone else within his administration take care of the business of delivering that line So it doesn't come from him allowing himself more Optionality to respond in either way because I don't think they've quite worked it out as yet Would be my take on that This is one of the other things that the US said was that Trump has authorised The SPR the special petroleum reserve oil release after Saudi Supply disruption now the SPR has been tapped in the first Gulf War hurricane Katrina and the Libyan crisis And the reserve drawdown may help counter potential oil price spikes So what Donald said was based on the attack and which may have impacts on oil prices Authorised release of the strategic petroleum reserved if needed in a to be determined amount Sufficient to keep the markets well supplied. So again, he knows he needs to counteract any particular ongoing continuous spiking prices now Some of you may Have heard of the SPR some of you may have not but a couple of details here. So a bit of context So you're aware for future purposes the SPR is the US government's Complex of four sites of basically deep underground storage caverns created in salt domes Along the Texan and Louisiana Gulf coastline Now the caverns have a capacity for 727 million barrels and store emergency supplies of crude oil owned by the US government Now at the current level of 695 million barrels So there is some spare capacity there the SPR holds the equivalent of a hundred and forty three days of import protection So obviously they can release some of this in the situations as we've seen here in the Gulf War or Anomalies in the weather which can have large impacts in production in certain regions But then they can kind of replenish those diminished stocks in those situations So as far as we're aware that hasn't happened as yet, but the US have committed to the fact that they're willing to do that Possibly not needed because you actually look at the price of oil this morning We were already backing down. We just had a flirt with $59 as I've been speaking So what was a sharp gain in WCI crude and a dollar terms of kind of $10 is now just $4 at this point Okay, so, you know, that was the big headline obviously the reaction other markets equities Airliners down this morning implications of their non-foreseen Spikes in oil prices. However, oil firms getting the benefit of that in a very short term is kind of way But overall a lot of the move already being retraced for the time being Okay, quick look at some of the other things that are happening overnight as I mentioned Chinese data was weak It continues that pattern of really Reflecting the weakness ongoing in their economy and the real necessity that they have now for further action from the central bank likely to come in adjustments to policy in a variety of different forms as we've already seen with cuts to the triple R within the last two weeks or so But also from fiscal measures, of course from the government to look to prop up the economy because industrial output rose 4.4% from a year earlier in August that is in fact the lowest for a single month since 2002 while retail sales sales came in below expectations. Let me just flick over to this chart here so as you can see The blue line retail sales below expectations and that industrial output figure Coming in the worst in about 17 years for a single month print even though it was still positive because again that number tends to track at an average of around 6% and Finally fixed asset investments slow to 5.5% First slowdown we've seen in eight months. I believe in that figure. So again China struggling Certainly continues to warrant further global central banking interventions as we've discussed in recent weeks Moving the moving the geographic needle over to the uk This is the latest of course over the weekend. Johnson talks up a brexit deal as he heads for yonkin meeting Again, this is all political Management if you like of what his intentions are So he was at the weekend saying that he's working him him and his team Absolutely flat out to try and get a deal in time for that october 17th 18th european summit So that then if you go by the existing legislation passed in parliament in the last week and a half would mean that if he has not struck A deal then by october 19th He needs to go to europe to request an extension to january 31st beyond the current deadline that he had self-imposed of october 31st so he's kind of suggesting then that look he's working flat out so that kind of Addresses that notion as we saw with the resignation of amber rudd That basically all preparation is being done for no deal and nothing's done for negotiation So he's looking to try and You know facilitate the fact that getting the hard brexit tears on board Of course that better to get a deal over the line and to delay again And also of course it works with the management of public perception He him showing that he's trying to do all that he can to deliver the will of the people on balance And this comes of course with your one of your Opposition threats not being labor, but liberal democrats who've come out at the weekend and said they've pledged to revoke Article 50 if they win the election. So no more. Let's have a second people's vote which they've been Pursuing for the last three years the liberal democrats have now upped the ante and they're saying we're going to cancel brexit Now what's the strategy behind this? Well, you know, I think the strategy is quite clear Obviously the vote to leave was what a four percent or so margin So can you capture and and make more ground from just having these 18 MPs in parliament that you have at the moment To something more substantial not to win of course, but to be a power in parliament as we've seen to cause Disruptions to the status quo like we've seen through the inability for Johnson to govern as we did with Theresa May But then also obviously teaming up with other political remain parties like the greens and labor depending on which way they go With Jeremy or not Then this is probably a strong strategy in that respect to capture the absolute opposite side of those who want You know a full cancellation of the whole deal. So this definitely is an election Move from the liberal democrats for sure And as I said before not a matter of if but when that general election does occur So brexit headlines you can expect a couple today. Johnson and Yunko are meeting later But is there going to be any type of headway made? Absolutely not. I don't think so It's whether or not he can get any type of concession over the backstop on the northern island issue is is the one to look out for of course But I don't think that that's going to be forthcoming not given what we heard from his trip to Dublin Only in the last week or so Going back to the calendar then to wrap things up and then Sam can go to the technicals. So As far as today is concerned Chinese data already out and a disappointment you know U.S. New York empire state manufacturing now That is important because you've got empire today You've then got u.s. Industrial manufacturing production on Tuesday. You've then got u.s. Philly fed manufacturing index on thursday so activity Um economic data in the u.s. Has been particularly interesting It's been one of the main reasons why the federal reserve are going to cut interest rates I believe the probability is priced at about 79 or so for 25 basis point cut on wednesday Is because of the impact that the trade war uh, the threat then pessimism growing over a looming recession with the inversion of the yield curve Over the slowdown in activity data because as we've seen consumers have kind of remained Relatively robust at least for the time being and so we're going to get the latest updates throughout the week on that situation On that u.s. Note the fmc obviously key as I mentioned Not just the decision or the basis that they're going to cut rates, but how many more times do they commit to at this point in time? Um, actually on that note, let's just quickly get up the fed watch tool on cme For those not familiar with that the fed watch tool allows you to see the implied probabilities of Interest rate moves defined by the short end of the curve in the federal funds rate futures So a cut of 25 basis points is currently priced at 84.2 percent and there's actually 16 of the market price for a hold In the meeting on wednesday, which is quite interesting given where we were just a few weeks ago Which was a lot of people talking about this idea of 50 that definitely has been put to bed more recently If we go to the end of the year though, given the fact that we're at 200 to 225 basis points Well, actually the market is priced not just for a cut On wednesday, but for another subsequent cut before year end They've on balance the market position for 43.4 percent that will be in a fed funds range of one and a half to one 1.75 percent The other thing from the uk Aside from the politics you get latest inflation data cpi rpi ppi on wednesday That then setting us up for the bank of england interest rate decision the bank of england will just be A regular one so no quarterly inflation report So we'll get the actual announcement on rates and of course everyone expecting unchanged And unanimous nine nil But we'll get the updated minutes as well from the line by line discussions that they had that of course the uncertainty around brexit kind of Just shackling any really near term decision from them Okay, that is it from me. I'm going to hand you over to sam. Let him go over the technicals and I will wish you a great week ahead Thanks very much Yeah, hi guys. Good morning We've all had a Good weekend As well start off here with with the oil chart You see as i mentioned getting up to 63 35 there on the the futures and just resting on 59 dollars The handle for now, which uh, well, you can see this the importance of of that whole area is a little bit below where we're trading We've already found support initially on that first retest of the The 31st of july level and then just a touch below there Which is currently the low the day was the high that we had back on the 10th So uh, just six days ago as a level goes on in the sand for the day and the week Pretty good area of support to consider of course already down quite heavily and Still, uh, well heavily from that high as it says still up just over four bucks From where we finished and closed the day on On friday and just bringing in that daily chart. You can just see The that high level going back to to may last year and of course that trend line, which was choppy choppy But then we did eventually get that sort of closed through And one about this one starting in may you can see that we've got that breakthrough We're just from the high from last year to then the april high But also just finding a bit of support on that now as well So as an area goes literally that low of the day is is pretty Important and one to definitely consider also looking at uh longer charts bringing the the s&p which Gapping lower as many risk assets did and we're just starting to We'll put this on a 15 minute before we look daily. I should say we're just starting to get A trend from the bottom Of the day to here and then we're not far away from that coming in It's the same of course as you'd expect in the dow Jones as well those trend lines Here you can see it's been respected A lot more so to keep an eye on that especially if the the dax was to come under pressure and break It's similar pattern which you're about to see here now Just from those lows a bit more choppy But again, you wouldn't necessarily disregard that for for the dax and the euro stops Alike which you can see it just drift in lower than it may well lead to a fall down In u.s. Equity so worth having those trend lines on If you like there's a line in the sand daily chart of the s&p Obviously, we weren't too far away from the the all-time high on the finish on friday the 13th Just draw that up you can see we Well, if we had had a similar day to the thursday, we probably would have made that In terms of levels to to be aware of and of interest around 29 60 Certainly, you know while a fair whack away now 30 points or so It is a level that the bulls will will want to defend You can just see the importance of this whole area historically And again Be keeping a close watch on that below there obviously we haven't had a proper test of 29 45 So that's something I would still have marked up as well and that all-time high not far away another longer term Charts to want to keep an eye on of course We'll go through this in the the daily strategy a weekly strategy as you say later on is t-nights And it's going to put this onto a weekly Chart here and just the importance actually of of where we hit last week Um, you can see was the the previous high on the futures that we had in september 2017 and really We just bring up the currency tool just for the percentage. So last week's move give or take a couple of Figures, yeah 2% So the biggest down move in in t-note price since november 2016 Something happened in that month. I can't quite remember Anyway worth keeping an eye on this level that we're we're currently trading at here on on t-notes We found some good resistance before breaking through there back in july And we've had a good bounce off that Well from the obviously we've had to get higher but below there There could well be a bit more room for it to to fall down and a couple of decent trend lines as well I'd have on on the week which gives it maybe that last bit of support Before a bigger move lower just a bit below where we're trading on that trend line So that weekly trend here starting on the 25th of march 2019 that week anyway Worth keeping a watch on that of course it did get higher as did gold and and silver So a quick look at this just you know on that 60 minute chart. So I'm bringing that in we briefly got above friday's high and we're now just knocking around the r1 for the day for for gold which has you know come up a fair bit from that double top that we had Back on the 4th Of september 26th of august. We broke out that mini range. We tried to get above it a couple of times and couldn't And for now the r1 finding Quite good support on that and really i would say other than the initial low that we had On the spike higher the key level here 1508 I was at 0.8 maybe to to the tick 0708 That would be an area i'd be keeping a close watch on if things were to to break down there You might get support other ways because some important lines in the sand certainly coming into play It's not a case for me that i do believe equities are suddenly going to start coming lower just off this this headline But we know as mentioned there are some important levels In playing if equities were to recover I've got to imagine gold here would just be coming under pressure from From that low as well obviously big events happening Obviously the fed taking centre stage on on wednesday and and gold price most likely will Actually be Higher or lower depending on that having a look at uh, well, we'll have to look at the euro dollar You can see let's remove the pivots Remove the pivots. I'm going to look at How we're trading going into the week. We'll see a decent recovery over the last A couple of trading sessions the we similar to the pound wasn't it in that you make a new low multi-year low Only to then spike all the way higher and obviously ecb was The reason for that and and just that high really the The level or should I say the previous low that we had back on The sort middle of august 16th of august which can't close above that So lining the sand there you go. That's one that I would would have marked up for that Again as we come into the fed we'll obviously focus a bit more on on how this chart looks and you can see If we were to get above this whole zone now drawing that trend line on Well 112 113 and the high in between that of the 26th of august could become a formality and we we get through that So as an area to defend so far for the bears there In control as we we got that Failed test higher, but certainly that is a good a level as any to to keep an eye on in To the beginning of the week and of course the the fed later bank of england. Obviously not expecting Too much to go on there, but a decent push higher 500 ticks higher than that multi-year Low that we had around 120 there, which is incredible and This wasn't really interested in in this previous low around the 17th We also broke through that trend that came in around Here and obviously friday really strong push to the upside Ultimately, it will be brexit that really drives this price. We've seen on on big days for the us dollar It's not really interested whether that be positive or negative on this this market. So pound Against the dollar really being driven by by brexit headline. So we'll go into some of these levels in a bit more detail As we do the strategy later Today quick look at what the DAX is doing currently. We just had a bit of a You know, I never made that trend line bit of a push higher So we keep those trend lines on from those lows and any chance to feel that gap again Gold t-notes and the bund most likely to come under pressure And the u.s. To follow that the DAX through obviously oil as well is on That low the day which is such a key level as a line in the sand So keep an eye on that longer term levels of interest in play for euro And t-notes as well, of course the the s&p 500 as usual any questions. Let us know In the chat And we'll get back to you throughout the the day should be a pretty pretty good week So looking forward to to covering that with you guys But I speak to you later today. I hope you'll have a good trading day and even better trading week