 Very good morning Friday 29th of November. I hope everyone is doing well a quick overview of the subjects I'll cover on my side going to look at these two guys Boris Johnson and President Trump They are meeting in the UK on Monday Not specifically just the two of them that are NATO leaders Meeting and there's a couple things to just think about the couple of the reports this morning are talking about So a quick look at that and a look at the UK election status as it stands at the moment It's been some disappointing Japanese data overnight as well to have a look at There's also some commentary from Saudi Arabia going into the OPEC meeting. That's due to happen next week and so Some things to be aware of there as well, but overall looking at the charts this morning very slight risk off As you can see the DAX on the center left Down about 50 points this morning Eurostocks down about 11 This following a generally negative session overnight in the Asia Pacific region Hong Kong leading the losses still a lot of focus obviously on going with the protests and People are waiting the eventual details and outcome of the phase one trade talks as well Just kind of a cloud of uncertainty somewhat hanging over the end of the weeks kind of sentiment The US markets of course very quiet electronic trade is open and it's going to be reduced trading hours Market closures today. So the nizy is open, but basically it's only open for a couple of hours There's an early closure on the actual floor at 6 o'clock London time In terms of the CME pit that closes basically FX interest rates at the same time. So early closure is there and then Globects CME globe equity interest rates FX early closes at 6 15 London So again, it normally means that US participants remain out of the market Having a longer extended weekend for Thanksgiving holiday, of course, but US index futures I would say barring anything unexpected Probably a bit of consolidation perhaps you can clearly in that center right chart already really see this between The pivot level and and really this level around 42 In the S&P 500 future at the moment holding but with slightly sour note in the equity space Just globally going to the European Open gold up a touch At around three dollar gain just coming up to around the highs that we've had on Wednesday Session you can see here just sitting above there or threatening that level at the moment Or be it still relatively quiet oil markets flat and in the currency markets That's pretty much reflective of the same thing one thing is though after the outperformance in The British pound a few days ago after the you go of MRP poll or this time yesterday We've now got the opposite case just a mile under performance in cable against Euro dollar So any of that gain you can see this is where we had the pop on the back of the pole that we had yesterday So if you actually look at where that opening bar is when that came out We're pretty much about five pips away from just being completely neutral in position from where we were So as I was kind of saying at the time I did think that people were getting a little bit ahead of themselves thinking that that was the kind of silver bullet That's it election done Because there's still a lot of uncertainty about how that's going to play out and on that note Let's talk about first thing. I just wanted to show you then a few other thoughts about the election news from this morning and that this is a graphic of basically looking at The cable option volatility over a one-month period which now of course What does encapsulate the the general election itself and short dated volatility in pound dollar rate shows a degree of caution Obviously traders have been caught the wrong side of the EU referendum Somewhat as well with Trump winning the race to the White House back in the end of 2016 And a fortnight before the election the two-week tenor climbed above eight and a half percent yesterday About one percentage point higher than it was at the same point in 2017 So basically people taking some degree of caution and protection amid potential large volatility that could ensue banking on the fact that a Large majority for Boris is by far not a complete done deal. So a little bit more I guess lessons learned In the rear view mirror of how political events even though all the signs were pointing to one particular outcome Have disappointed on many times before and and largely goes to show as well in the the kind of more clean price on the chart Why I think we've had a uncommitted add to the move that we saw yesterday So polls obviously there's going to be lots more polls coming out over the weekend So just keep an eye on my Twitter account. I'll be Covering them as and when they come out The other thing I wanted to mention on the election side at least two chaps, of course And so as I mentioned Trump is visiting Hertfordshire on Monday There's basically the UK is hosting a NATO leaders meeting And of course Jeremy Corbyn and the Labour Party will be trying to leverage this as much in their favour as possible so I can already tell you what the headlines are going to be it's going to be pictures of of these two like here Looking absolutely having a great old time. So if I just transition my screen, this would this will be the perfect kind of cannon fodder for for Corbyn They're trying to align the two as if they're best buddies They're going to cut a deal and the main thing is is that Boris is going to sell the NHS Which of course is the kind of main area of which Corbyn is trying to push from the the kind of strategic angle Trying to resonate with the UK electorate now a couple of things to be aware of here What's quite interesting in this article in Bloomberg? They're talking to a couple of Tory insiders and Apparently there's a little bit of nervousness around this potential Meeting between Boris and Trump because what they see is if you go back to the summer Don't if you remember. I think it was Where it where is it in the UK that do the sparkling water? Blenheim house Blenheim house that really, you know, fantastic-looking grand old house in very much a Place where the Americans obviously loving it but that was where Trump you remember in June met Theresa May if you remember at the time Trump's never really got on particularly well with May and From a political point of view for Boris now if you remember Trump made a bit of a gaffe by saying to May expressly that Access to the NHS for US companies would be one of the things on the table in trade talks after Brexit He later then went on to also Just a few weeks ago receive Well, basically say that a surprise interview of Nigel Farage Obviously a someone of his position politically should carry in normal terms political neutrality in foreign Elections where basically they don't make any comment, but he warmly endorsed the quote Fantastic Johnson saying that Jeremy Corbyn was so bad so bad Obviously repeating it twice as he does now The problem you have here is that as far as UK polling is concerned Trump is not particularly popular for UK people Wherever else, you know domestically in the US is very different in the UK people generally don't like Trump regardless of where they sit on the political divide and so Obviously the more that it's viewed that Boris is cuddling up to Trump and also that the NHS is at risk Obviously the more ammunition that that gives the Labour Party and that's what the Tory insiders are fearful of so something to just think about one note let's let's flip this the other way Because of course I am impartial and One thing that I did see that I thought was was interesting and I hadn't really thought about too much is another Conservative politicians said that if the polls showed a bit of narrowing as we have been seeing other than the the you go MRP one then he actually said that would be helpful Not too much of course, but just enough to make people worry And I think that is one of the things that you remember We looked at the letter or the blog post by Dominic Cummings and he was talking about it still could be a hung parliament Don't be complacent what Cummings is trying to do directly there is counteract potential conservative complacency. They're absolutely annihilated The chances of Theresa May in the 2017 government So I think it was quite interesting what that that politician said and I do agree that you kind of want the polls to narrow a little bit so that your Your conservative voters remain motivated to vote the last thing that you'd want is that they think that this is in the bag They don't show Labour galvanized as they did before the youth demographic which as we've seen have had an incredibly high amount Comparative to 2017 of new registrations of under 34 year olds and all of a sudden you've got a hung parliament Not a 68 seat majority as per the poll yesterday would indicate so a couple things to have a think about Okay away from that. I mean obviously as right now is concerned the pound not really moving nothing I've covered is is is more things to be aware of rather than things to articulate into the fundamental part of your strategy as far as the intraday is concerned The thing really looking at this morning for my point of view is keeping an eye on the equities which Have started on the back foot and some slight deterioration that I've been seeing as I've been speaking As I said overnight Asia Pacific session generally was negative we did away from Hong Kong and China have Some Japanese data and Japan's output dropped raises the risk of steeper economic slide So let me just show you this graphic here This is looking at Japanese Japan indices of industrial production. So factory production dropping sharply Negative 4.2 percent as output slid in the overnight numbers now It dropped more than expected in October and as the article suggesting signalling the possibility of steeper contraction and economic group growth Potentially ahead on the horizon and boosting the case for more and larger scale government stimulus package a sales tax hike and a super typhoon Contributed to the 4.2 percent slid in factory output from a month earlier Matching the worst drop in the last five and a half years in this measurement for Japan Some would say then well if it's a super typhoon Well, surely that's just a one-off anomaly because you're not going to have that persistent over every month's data But weak production forecasts for the rest of the quarter suggest more of a weaker underlying trend Following October's two percentage point tax increase in the sales tax and so most are anticipated This is going to continue. So as I said, it's likely to call for bigger government stimulus package And what we had also overnight was this chap. This is the head of the Sorry, let me just transition my my screens again. So this was the the Japanese graphic that I was just looking at So this to give you some sort of visual representation about how weak the number was from overnight You can see here on this right bar on the bar chart and then this chap here Corroda head of the Boj. He basically said overnight following the data That they would not hesitate the central bank to ease policy further if the momentum towards its price stability target is lost Saying that there is ample room for more easing so certainly It's a case of All of the global central banks at the moment feeling a little bit of pressure and one interesting thing I think that is developing if anything is The US starting to outperform a little bit and there's been a lot of reports about that this morning about how If anything the US economy is it is outperforming China specifically Putting more and more pressure on the Chinese to want to cut a deal to get this phase one and the removal of the threat of additional tariffs on December 15th Removed but I guess as well going back to a few days ago. It continues to fit then with that kind of broader expectation that I have of Continued for the pound at least in terms of cable. I think fundamentally politically economically I see more downside risk in comparison to more stabilization in the US economy and as a net response on hold Fed and a more robust dollar in comparative terms Final thing I was going to mention on the news front Saudi Arabia. We do have an OPEC meeting happening officially next week and One of the things that was quite interesting is obviously there's a there's has been a recent months a change at the helm of the oil ministry the all-minister of Saudi Arabia and It's been a little bit vocal. I don't think I think it's being a little bit sensationalized, but something to be aware of saying that I'm Saudi Arabia's to signal it's had enough of OPEC plus cheating on their quotas now Their headlines not wrong As I said, it's a little bit sensationalized basically Iraq probably the worst culprit of sticking to any predefined quota as part of the OPEC deal But Nigeria Kazakhstan Russia, of course second largest producer in the world among OPEC plus who are seen as You know Saudi Arabia obviously had that it Iran linked drone attacked on their facilities a couple of weeks ago So they've obviously felt the the loss of output albeit. I've got it back on to Sustainable levels again quite quickly But everyone else has been making hay while the Sun is shining where Saudi has been kind of picking up the tabs some to speak And that's always been the case ever since these these cuts Have been initiated, but they've kind of put their foot down a little bit And I'd say this is you know very tactical again just going into the meeting of all of the heads of oil Producing states next week in Vienna Okay calendar-wise for today Likely to remain pretty quiet overall It is month-end of course and given the fact that we've had such a supreme run-up in the equity space Could we be Due for a bit of a pullback again as I said the S&P other indices testing quite interesting Lower bound support points of some of the incremental rise we've had throughout the course of the week So it could be quite interesting perhaps the the thinner volumes liquidity could Exacerbate some price movement if we were to see a little bit of weight coming in just before Europe heads away Obviously as I said US participation will be light Given that holiday and reduced trading hours for the European morning overall. It's pretty quiet It's not really too much major going on There's some German unemployment rate and change coming just ahead of 9 a.m To be aware of probably the main feature of the day from a data point of view is the flash CPI reading coming out of the Eurozone Expectations there are for a year-in-year pick up to point nine from zero point seven percent I got a range of point seven to one percent on the lower and upper bound for that that figure that'll be at 10 a.m London and then into the into the kind of North American session. There is some Canadian jobs Growth data obviously nothing out of the US though and if from a speaker's point of view or ECB related DaGuindos to cost speaking later on this afternoon. All right, that is it from me so once again if you Haven't already done so and you're watching this on YouTube Just remember to like and subscribe to the channel more updates to come to give you an early heads up as well Sam and I will be covering the UK general election live on the YouTube channel throughout the entire night So hopefully that's going to be a good one So remember to subscribe to the channel and you'll be able to watch us as we go through that. All right guys Have a good weekend. I hand you over to Sam All right guys, happy Friday For the technical analysis you might as well just watch yesterday's Video really not much as has happened the move to to change the key levels Especially in the S&P you can see it did go up to that area We were looking at to the upside around the pivot that's come back down But we're right on the the lower part of the range We were talking about on around 31 42 to the downside 40 as a really key Level of support and unless that was to go We've got a baby that the balls are still in control certainly in the in the shorter term But if we were to break that and move down maybe, you know here, we'd be looking down to 31 30 I know that would be a pretty big move considering Then it would be a you know a win for the Bears you would decide You know two failed tests that are pushing above 31 50 and then to come back down 20 points from that would be Pretty significant, but at the moment holding you can see the importance of this from today yesterday the Day before that and of course then just early on the 26 so important level Trading there on the S&P 30 142 Of course, if you are using CQG You may notice that the pivots are exactly the same as yesterday that is due to the the bank holiday In the states we see for Thanksgiving, so it's a something to to bear in mind I mean a look over the decks which actually is moving a bit and that has come down this morning and broken through its Key level of support so where we get tire on the weekend you can see here while that was filled on the Tuesday We're now below that and that will be pretty significant if that was to close and continue That might well bring a bit of added pressure for the S&P and the Nasdaq and the Dow To the bottom of their ranges in terms of key levels to the downside for the Dax I'd just be looking at from a Market point of view level wise horizontally on the 20 seconds You've got just a bit below where we're trading here 13,000 151 would be a point of interest that I would have Marked up on there the currencies euro and the pound they are limited in price action yesterday You can see we did spike higher didn't quite get to that R1 that I was interested in Might as well now have this trend line on from The 25th 27th you see that's not too far away on both occasions now So keeping a watch on that and also as we had on yesterday the trend line from the downside and perhaps Waiting for a break either way might be the the better option here to go on you can see for now I'm just gonna zoom in and make it the candles a bit bigger not much going on So this is really from midday yesterday We came to to test that lower point from the previous evening and then we've drifted back up and what was yesterday's and okay? Today's pivot is acting as some sort of support. I think looking at this from an opportunity perspective with those trends on With the long with the higher of yesterday and the trend line to the downside I'd only really be interested in those points the pound Let's move that in you can see yes gap in high yesterday. We filled that in in quick fashion We've had quite a decent level support around 2906 29 on the dot was pretty much the pivot yesterday And that was a key point didn't quite get down to test that that was the previous high from yesterday from two days ago And then the retest in the the midst of the the pole being released at 10 So that's still an area I would keep a watch on But the amount of times we've hit that support of six just makes you think if we were to get below there It could be a bigger move to come even on today below that 2876 would be the point I'll be keeping an eye on and then of course just above where we're trading We're in this mini range on me. You can see here. It's not big 2906 to 27 And really if you want to be precise, I would have this area here at 2932 As the point where if we get above fine, you know, we could maybe see a bit of a Finish into the end of the week and attack that double top that we had from the early hours yesterday at 53 if that holds where we can come down to this triple top triple bottom, which is a 120906 so certainly some interesting levels. This is whether we're gonna have that volume to really push us out of that range the Aussie has You know not done too much You know from yesterday and you can see we've just broken out of that mini range So for the euro and the pound you might see some sort of similar reaction and probably best to wait for those breaks to really come in Just incidentally on the the Aussie. I do like the look of the pivot as a whole Along with some of the resistance we saw two days ago gold Not much really to report from movement But we did come back in the early hours of trade to hit that point We were talking about in yesterday's morning briefing around 14 64 65. That's been key This morning and also an area I would still have marked up despite those couple of spikes We've got through the R1 remains significant and like we said yesterday with the euro Worth having on any of these trend lines. You can see is still nicely Respected even though we've had those spikes I would still have that on because if we do get a breakthrough then you're looking to target those previous lows from Well yesterday and the previous days of the week. So price does getting squeezed in From the downside for gold probably waiting for that trend line to really break and then the highs around 65 Wow, you know the amount of tests may probably don't make you want that short I still think the overall direction here should favor a move to the downside and maybe that R1 Could be that opportunity oil Did have a bit of movement into the back end of the European session spiking higher Didn't quite get above what was the previous low Before the DOE and and that was significant enough to bring us back down But that was it for the movement so 5823 they still have that marked up along with a high of yesterday Seven ticks above that R1 as it was yesterday is a key point key zone that we're still in as oil is now As you can see in this this is cool It 58 70s to the top and then 57 54 to the bottom s1 Yes, and two days ago is low R1 and two days ago is high points to keep a watch on Along with the the high of yesterday and any trend lines if we start to see Price just drift in higher. Just make sure you get those trends on for a move lower, which could be Slightly more aggressive on that break. You can see just here. So look what we've got I mean, it's not amazing, but maybe this one here, you know starting from what day we talk in here Wednesday Thursday double bottom on the trend line keeping a watch on that that should be enough to give a move If it was to break through so the Dax is finding a bit of support the S&P Still hovering on that support Around 31 42 and you've had a two-point bounce on that the pound hovering on those lows the euro not doing too much But for both those currencies probably better waiting for the range to actually give way or those trend lines from the lows To give that opportunity for a bigger move. I hope you all have a good Good trading day and an even better weekend. So any questions you have please do let us know