 Okay, very good morning and a happy Friday It's the 6th of September got plenty to talk about because obviously today is US non-farm payroll So of course we can have a run-through of what the expectations are for that and how the market might react before we cover it Obviously live later on Couple other things to have a look at this is obviously a chart you can see to the side of me I thought was an an excellent graphic to sum up the current state of play You've probably seen this before this is the the trade war cycle It's kind of this isn't the adverse feedback loop although albeit slightly similar in a sense that you can almost follow this through to a To a tee and the red obviously dotted line Showcasing where we are at the moment US equities touching their best levels in a month yesterday after we had that article This time in the briefing on Thursday when we're talking about Bloomberg breaking that exclusive report about US and China I'm going to be looking to Recommend talks in October so markets rallied you had some good data yesterday, of course ADP very strong beaten expectations Same with the ISM non-manufacturing as well. And so lifted just general mood from what had been a little bit dampened after we had that particularly disappointing manufacturing activity data from the US a few days ago, so Market rallies Temporarily on news positive phone call on trade talks with the data and now we're in this positive phase However, just to quickly explain this cycle that then Inevitably leads to no real progress happening irrespective of even if they do meet this tends to be what happens And then Trump gets a bit frustrated The administration is then tough on trade with China because as the equity market has had this phase of relief and rallied Almost feels like it gives Trump more manoeuvre to get more aggressive And then the cycle continues market then starts to sell off on the fears of the trade talks escalating the ramification on global growth and if it sells off enough and then the administration starts to hint at a resolution and Then we go full circle again. So I would fully expect this to repeat multiple times Over the course of the coming months for sure The important thing I guess with this type of graphic is understanding of where we are at this present point in time And I'd absolutely agree we are right here at the moment And so now it's about between now and the coming weeks of now that they're going to meet face-to-face and trade war being The key macro risk to markets. Do they actually make any concrete headway and not really headway? Do they freeze any looming tariffs that are still yet to be triggered at this point? So yeah, quick look at the charts though this morning Just all I was talking about it's a little flurry of backs price movement. We just put it on a minute Perhaps a little range break just on some of those highs just getting over that initial High print about 10 minutes ago or so looks more likely the case if I actually look at the backs here on a range if I just remove some of these Technical studies here. You can see probably just a break there of the the high print that had Restricted some of the price action in yesterday's session as you can see a little bit of an extension on the run As I'm delivering the briefing then if you're looking at the backs just keep an eye on the upside I'd be looking at that overnight Asia-Pacific rally that we had on the back of that Chinese Report that came out that positive one could be an upside target there 12 163 and a half. Should we continue any higher? But otherwise elsewhere equities obviously generally quite positive yesterday amid the trade talks and the data that came out as the states So if you're looking at the US 10 year, you can see here in the bottom right hand corner We actually sold off a significant amount and that obviously reflected as well in gold that Comes and the important thing here is it all comes ahead of the Federal Reserve interest rate decision Which is only literally a couple of days away. It's going to be What a week and a half September 18th and The prospect well, let me just quickly jump to it now and show you on a graphic to make it more straightforward This time yesterday, we were looking at the federal funds rate futures and the short end was pricing in a probability Majority of a hold but of around a seven and a half percent probability of a 50 basis point cut After what happened yesterday on the developments on both the political and the economic information that we had that's flipped now and 50 basis points is completely off the table and now there's a six and a half percent chance of a hold We don't even cut at all So the overwhelming majority here and I still firmly believe will be the case that the Fed will cut 25 They're just interested to see how quickly and how fluidly the situation can change Quite rapidly and so as such as that Kind of change of perception given those new data points and markets got a reprice so the yields seeing a bit of a lift and Gold just unwinding some of the the elevated moves that seem more recently having busted through 1550 in the last couple of days Otherwise currency markets Dixie's pretty flat I've had a little again break of the Asia Pacific range and cable finding now some near-term support of pivot in the futures market That Asia level kind of really defining a lot of the downside Lows from yesterday's range if you like that was holding so a break of that and Interestingly euro just finding a bit of support around that same similar low point from yesterday's price action Well, it's his Gold I'm looking at here firstly, but let me just pop to the euro and see what's going on Yeah, the euro he has it says similar in a way that there's not really a great deal going on A little bit of resistance found at the the pivot level But gold on the on the top right as they said finding a little bit of near-term technical Support around the the initial blip on the low that we had Shortly after some of the data points yesterday Let's get straight in then to some of the news But before I do you can see the DAX and again This is just a way for anyone who's not really used to trading the DAX as an instrument This is quite typical price activity. You get a technical breach of a level The DAX is very much a kind of momentum-based speculative product in a future sense You can see how then these short-term fast money moves tend to target the most obvious near-term technical levels of Relevance we hit that mark and you can see profit-taking and now we get quite an aggressive pullback already So nice little breach then hit that target then the DAX I'm sure there's a couple of you in the trading live room that would have got hold of that So if you did I start to the day to get things underway Getting into some of the headlines having a look at Brexit start with what is going on at the moment. Well continued really kind of criticism of Boris Johnson as much as Sure, whether it's quite as warranted because as I've said many times before I do think in a general election is still going to happen. It's just a matter of when not if But Boris Johnson's foes look to push election to late October. So what the situation is here is yesterday? Boris Johnson was up north and what was he hoping to be the first of his Election campaigning period, but obviously that hasn't happened yet. He was speaking at a conference with a group of police officers talking about again law and order and I've already seen actually the Advertising pushes on my social media feeds about Trying to get me to sign up to join the police So add 20,000 new officers on the streets, of course, which has been his pledge The point being is that he said he he was questioned by the press What would happen Boris if you had a general election or if you didn't win if you couldn't get that request What would happen? Would you resign the idea about what if it got delayed as per the legislations? We've had this week that's passed what if Brexit was not delivered on October 31st, would you resign because you've put such a definitive marker on that date and He Swerved that question. He basically failed to answer But what he did declare was that he quote I would rather be dead in a ditch Then agree to another Brexit delay. So still very much of that that line and and using very strong language To deliver that message now. He said he wants the election on October 15th or indeed earlier But what's happening and what this report on Bloomberg is suggesting is that according to people familiar with the matter? Labour Party leader Jeremy Corbyn is in talks with the SNP's leadership Over blocking Johnson's bid and asking for an election late next month the date that's being tabled by the opposition is said to be October 29th as the most likely at this point now I would imagine then their strategy being then that you're right up to the wire Giving as little wiggle room as possible for Boris to pull anything Because the date obviously would be two days later at that point the other big piece of information It came out yesterday, of course not that this does have a meaningful translation into the immediate impact of the pound But obviously the press will make this, you know, kind of a bit of a mountain out of a molehill This is obviously Joe Johnson, which is Boris's younger brother a conservative member for many years And he resigned he announced it on Twitter basically said that there's been a lot of tension in the family And it's either putting national interest or his loyalty to his brother and he put national interest first as an MP should right But what does this mean for Boris again? I don't think it really matters to be honest Obviously it is his brother, but you know these two guys There's there's other things going on here and there's other ambitions underlying certainly what Boris is doing So overall, I don't think this is really anything from a market traders strategy point of view It's just an interesting headline and that's where it begins and when it ends. So Overall, obviously the pound has rallied aggressively this week Boris losing his majority To the legislation passing obviously that needs the Confirmation still from the upper house to come back down to the the commons to get full approval But there's I don't see any barriers to that and that meaning then that the prospect of a no-deal certainly The immediacy of that has been put off at least for the moment and then the potential Delay that could come which has all been reflected in appreciation of sterling despite that week and a half ago Or so when we broke 120 so I'd leave Sam to look at the charts on the intraday I'd say in the short term It's going to be more of a dollar Derived movement rather than I'd say sterling so much same case for the euro really because today's non-farm payrolls and and obviously we are trying to ascertain what as to what type of language what type of Projections that the Fed are going to put out so data points are very important So the driver today is very much going to be dollar-led movement rather than I'd say specifically stuff in the pound Moving on then before we get into payrolls a few other headlines. I just wanted to go over quickly Obviously the the press coverage in regard to the ECB is starting to ramp up because we've got the ECB interest rate decision next week Draghi is seen overriding opposition with a QE push as gloom Deepens now we have had very mixed comments the kind of uber hawks the Germans the Austrians have been talking about There's not really any need to do QE and things like this and that's been counteracted by people like ease Oli Ren but Draghi if you think about Draghi as this this comes into his last kind of appearance before he hands the reins over to Christine Lagarde He has had this tendency to over deliver on the dovish side And definitely I think at least all things remaining equal I think he's gonna err on that side to kind of set up Lagarde quite nicely to counteract this Economic slowdown that we've been having in the in the euro area but again, just a refresh your memory. This is what the Bloomberg survey of economists over the last few days has Suggested on the base case looking for a 10 basis point cut to the deposit rate An announcement of asset purchases of which then will physically recommence in October and then Secondary cut to deposit rate then taking it to minus point six to occur at the end of the year now Reasonings being the next ECB meeting much similar vein to the Fed. We're going to get projections From the ECB staff and they are seen lowering projections for 2019 and 2020 in regard to growth and inflation so given Evidence and supporting case to to do what is necessary to prop the economy up by by cutting rates and also restarting QE The biggest risks to the euro area the black bar here Looking at the the highest risk the blue scaling in looking at the lowest risk and going from left to right the biggest Factors facing the eurozone at the moment global trade tensions Disorderly Brexit German recession euro area recession and the Italian crisis and obviously number one and two really Dominating here particularly countries like Germany and that being trade tensions globally and the prospects of a no-deal disorderly Brexit The Italian crisis actually seen as a much lower risk particularly given what we've discussed this week with the an Announcement of the new cabinet that new Finance Minister Guarattari and also this PD five-star hookup being much more An aversion of what could have been a much more nationalist kind of confrontational government And so Italy's dropped down the pecking order in that respect ECB is not the only one though Bank of Japan's governor Corroda came out overnight and has started making further noises about policy easing saying that deepening negative rates is among the options of which They're contemplating so again None of this is particularly new But it certainly encapsulates the global monetary policy environment at the moment for sure Right, let's have a look at what we can expect from non-farm payrolls today A couple of pieces of information to look at first this of course was ADP Which exceeded expectations by a large margin yesterday as you saw 195,000 one of the interesting things though that I did see Within the report itself was a hundred and ninety-one thousand was the top headline figure if you actually go into the ADP report You can see the breakdown by the change Specific to business size that classified from small one to 50 man sized offices mid-sized 50 to 500 employees and large 500 plus And what you can see here Which is very interesting I think comparative to what we have seen recent other reports is there's a really nice even split where small mid-sized and large companies are all employing usually it tends to be Slightly more elevated and stronger in one area weaker in the other and obviously what you want to see in a more positive situation is Increased growth across all three areas of which definitely the ADP report showcased yesterday so a decent report and again hence the reason why you saw such an aggressive downside move in T-notes and gold yesterday What other things then have we had this is the pre release? Checklist remember when we go through that series of employment related data in the US as to ascertain how this Labor report might might Come out as and so challenge a job cuts was one of the other numbers that we've had Excuse me and a number of corporate layoffs increased notably in August so ADP we were just saying was particularly strong, but challenger layoffs actually showed the opposite Job cuts have actually gone up a decent amount 38,000 prior to 53 and a half thousand That's a pretty pretty large jump as far as the weekly Initial and continuing jobless claims are concerned They've been fairly neutral the four-week average for the first time unemployment claimants is stable Around 215,000 very close to multi-year lows So that's not really an area to worry about ISM non-manufacturing the headline was a chart beat, but the employment subcomponent did decrease and if you look at the ISM manufacturing Falling from 51.7 in July to 47.4 in August So again a big disappointment on the employment index the subcomponent of the actual ISM readings University of Michigan That fell falling nearly 10 points. So that was a poor reading But then we've had consumer the conference boards consumer confidence index that was particularly high Remains strong exceeded expectations ADP 195 over 149 expected and job Jolt openings beat expectations. So on the balance I would say it's been relatively mixed Obviously ADP a standout Jolt's decent as our consumers in their general performance at the moment But the employment constituents of both ISM reports Particularly the one we saw yesterday despite the headline have been weak and challenger job cups are up So that's mixed however There are two very important points to look out for in today's jobs report. The first one is this Now this is looking at The seasonality of the headline creation of the change in non-farm payrolls And a very interesting statistic as you can see here is that the first reading of August Generally has a recurring seasonal bias where the August first reading is weak So discounting any further subsequent revisions that come August job growth has decelerated in each of the last ten years and it has missed Consensus eight of those instances So again, just to be clear here if you were Contemplating then on the balance we've been relatively mixed But if we're talking about a potential for a week report, well, then actually The August tends to have a seasonal bias to be weak Okay, excuse the background noise So someone's just Trying to test my mantle of if I could deliver through a coffee being made The other thing here then is So that's talking about potential for a week report. How about if we had a strong report now There's another secondary factor to look at here now excuse for a second the chart That I'm looking at the other thing that we're looking at is this Which is census hiring now, what is this? Well Temporary employment related to the 2020 census So the government basically having to employ temporary staff to carry out a census has Significantly lagged that of 1999 and 2009 when these were previously done however address Canvassing is now underway and Census have announced that hiring picked up during and ahead of the August payroll Reference week given this and given that the 200 plus regional census offices that were opened in late July Wall Street banks like Goldman Sachs expect a visible boost From census hiring to be apparent in today's report now. Goleman's are anticipating this is going to give technically a 15 to 20,000 one-time boost to the figure So this is it now So as payrolls as a whole if you're trying to ascertain the headline figure as a couple of things you need to kind of chew over Looking at the underlying employment related metrics heading into non-farms It's been relatively mixed and that would make you think yeah 160 sounds pretty reasonable But now which one of the two Potential factors here that are more anomalies to a normal monthly situation. Do you put greater weight toward? Do you put it toward the fact that historically there tends to be seasonal weakness in August or? Do you put it towards the fact that this time round? We have an extraordinary situation which doesn't happen every year, but we're having a census Conducted which has created now a quite extreme jump in temporary hiring which could influence today's figure I'll leave you to make that judgment call Beyond this of course those non-farm payrolls of course is much much more than just a headline change in non-farm payrolls although that will be important of course We are looking out for the average earnings figure that is expected to remain relatively consistent though at 0.3% A range of 0.2 to 0.4 so not really expecting too many surprises there on the actual range for payrolls We're looking at 110 to 206 to give you a bit of an idea of the actual range The unemployment rate not expecting any real surprises there remaining to remain unchanged in the prior reading at 3.7 is the consensus I guess talking from a market reaction point of view all in all I'm not really expecting too much from this I a distinctive shift in say Monetary policy thinking about what the Fed are going to do I mean even if you had a strong report, let's say high job creation We get a 200k headline. We get a positive net revision We get unemployment remaining where it is But we get a maybe a tick up at 0.4 in wages Well, that certainly discounts any notion of 50 basis points for me personally I think 50 is off the table already even without that kind of setup now Would that mean that? Equities are gonna sell off quite violently I'm not so sure. I think actually I wouldn't really focus on equities if I was looking to Give you advice and how to trade and tackle the situation what I would look at is I'll look at yields I'll look at gold. I'll look at the dollar as you saw yesterday Gold and yields were very reactive to that strong US data So if you did get that full clean sweet setup of a nice report today, I'd look to play those accordingly And dollar movement that a bit of appreciation of dollar. I think would be warranted cable I think there's scope for a bit of a pullback given the acceleration in price that it's seen of a good three and a half points This week if we get the reverse if we get say a sub 100 headline reading We get wages down Surprise break the range and comes in month-to-month on average hourly earnings at 0.1 With a negative net revision unemployment rate ticks up Yeah, I think you could see a bit of an equity push on I think we'll get a decent reversal then The US 10 year to pull back basically claw back the losses seen from yesterday in gold To move back up towards the higher end of the range breaking through its pivot and up towards that kind of 1550 area again but again With trading economic data, you're really looking at the extremities here and scenario building around what you would do under those Those situations I think my advice to anyone who's new to this is that as much as I've gone through the evidence to support What you think the report might come out as that's fine That provides you with your base case expectation of what might occur But ultimately you're not here to kind of force your opinion and expectations on markets You're here to strategize and prepare what's going to be the base case What are you going to do but then also be agile enough to adapt that if we did get a surprise on either side You also can take advantage of that situation in a short-term intraday environment all right That's it from me I'm going to hand you over to Sam and I'm going to wish you good luck for this afternoon I will be on the mic to cover that in full for payrolls But otherwise have a great weekend. Thanks very much guys Hi guys, hope yeah, everyone is is doing well just starting to see well in the safe havens and the risk assets just a bit of a reversal from the Initial push we had about 30 minutes ago for the Dax hitting up as its resistance points and the failing to Break over yesterday's high but it's stuck within that that range You can see Anthony's marked up and that could really be the Indicator for the remainder of the the morning session and what happens direction-wise between those two points yesterday's high And then this morning's overnight high as well and you can see if we look into just Well us equities and I've got this this chart up here and on the Nasdaq my own screen just looking then Potentially waiting for a break to the upside. I have to say I'm favoring Above this trend line once that was to break or could break I should say and and that may well lead to a further push To the upside which of course pulling Trump's trade comments from overnight yesterday Have have helped this market to the upside so favoring that but only looking to get in once that Trend line would break into the downside if the Dax was to break previous high of today Where you can imagine this trend line from yesterday's high into these lows would would come under a bit of pressure potentially later on pivot remains key Here for the Nasdaq though Potentially looking at that later on in the day and you can see similar for the S&P in terms of that whole area around the pivot 2965 Pretty important gold and silver have just had a bit of a bounce from from those lows going understandably On that area from yesterday Just keeping probably a close watch here now and on what happens around 1520 point 8 Which was a previous level support So quote a couple of these markets has come into it to key points Which could really determine the remainder of the the morning session, but of course with non-farms It wouldn't be all too surprising to see a slower morning for those US products whereas pound and euro which of course have Really been moving quite nicely in the morning Have already had a decent enough move so far the pound is finding a bit of support on the pivot So be keeping a close watch on on what happens there Understandably that 123 pivot level an area where people would have taken profit after we broke Well, okay a really key level support from yesterday on our one, which just couldn't break through But also from this morning five ticks higher Another area support so for any retracement to continue from this pivot and for us to really push on That zone there one twenty three twenty to twenty five Will remain key to the downside for the pound and and here if we have a look maybe longer term because of course It's now going to be about where we finish the week. Let's remove all of this 124 is obviously very important because of that the retest of that longer term trend line that we've had Going back to 2017 just put this on it be coming in Around there. Yeah, so 124 would be absolutely massive. Should we get a test of that at the moment technically? It still looks great for a for a for a short whether you would really be interested in holding that over the weekend or not I think you wouldn't really but also should we push higher worth keeping an eye on this trend here as well you can see Taking these highs of previous sessions and yesterday as well So some nice technical setups to think about higher up for the pound and then obviously previous lows as we come maybe Into the remainder of the week be keeping a close watch on around 122 69 Just from a price action point of view It's been pretty good in previous sessions as Determining whether we go higher or lower the break that we had yesterday. Well, this time yesterday Confirmed the push to the upside so around 122 69 would be a point I'll be looking at as we come into the remainder of the day of the week I should say euro nice start this morning just knocking on the the door of the pivot As you'll see I'll put this on here. So worth keeping a watch on that You can see one two three times coming up to test this a break of that Got it. Well, not the biggest move in the world to the next resistance point really looking at the Breakdown and retest area from yesterday one ten fifty eight and a half, but certainly the amount of times it's knocking on that pivot You may well favor a push to there and then obviously see what happened around that point as well And it's just knocking Knocking on the door as we speak quick. Look over just a bigger picture See what is happening there the Dax testing that level now So worth keeping a watch on that and then how US equities obviously perform We'll probably be based on what the Dax does this morning before we go into to the afternoon as well oil Pretty range bound so far. We pushed higher Yesterday on the the DOE before reversing into the back end of the session here Let's have a quick look to see if we've got anything going on It's not the best trend line in the world to to have marked up oil You can see here if we just make this this smaller we've still and I'm gonna put this into that daily chart We we talked about having these these trend lines on from Longer term and well we had a bit of a false break. Yes, of course, which could indicate the Put this back on here, which could indicate the Bearish signal to to get short on the fact that we fail to really break above this So again the week clothes will be key But pretty much where we're trading now is a very important level because I've a you know 10 cent either way here And then we're actually then above that trend line again So worth keeping a watch on that as the oil goes into the back end of the session as with many of these markets Of course and with with Trump You never know what's gonna happen and of course brexit could make this morning relatively interesting For the pound which again is now coming to test that level we talked about so very important for the morning Here for the pound just keeping a close watch as you can see why yesterday's Lows from the afternoon and then five ticks above that as well as the top end of that That level so resistance point here being tested the euro just trying to push above the The pivot as well a couple of ticks, so I'll leave you guys to it as it looks to get quite interesting now But I hope you all have a good trading day good non-farm payrolls for those that sticking around to trade it and A good weekend ahead and as usual any questions, please do let us know and we can get back to you But I hope you'll have a good one and catch you all later