 Okay, a very good morning to you. Hope you are well. It is Tuesday the 7th of April Before I begin I just have to have a quick Kind of announcement. I guess the Prime Minister as I'm sure you're fully aware of now Boris Johnson has been taken Into intensive care in the UK. So before we begin the briefing obviously our thoughts and prayers go out to the Prime Minister Hopefully he recovers quickly. The understanding is that he is receiving oxygen at this point To help with his breathing at St. Thomas Hospital in London, but he's not on a ventilator and he's still conscious for the moment So wishing him a speedy recovery and just opening that out to everyone and anyone who's been affected by the coronavirus Of course, we hope you will get well soon but Yeah, just taking a look at things then this morning and really just kicking things off from a markets perspective We will talk about the pound I'll circle back and and have a look. I was sat here And I just happened to be sat on my screens last night when the news broke So I did see you know majority of the move as it unfolded So we'll talk about the pound but otherwise what I wanted to talk about was the broader market and that is The equity index futures continue to rally and this comes after one of the biggest two Rallys we've had in two weeks actually yesterday. So if I look at the Dow it closed up Yeah, about sixteen hundred points and you can see this morning. It's already up just over the Over Asia or overnight Asia Pacific highs and we're up about 300 again The DAX printing session highs as I speak coming in toward R1 up about 282 the S&P up 33 so kind of naturally if you like from a Correlation point of view fixed income t-notes continue to downward trend from yesterday down 11 ticks But gold bucking the trend and we're going to talk about gold because it did see a Sharp rally yesterday of the best part of a hundred dollars and a fairly uniform rise actually for the yellow metal So we'll have a look at that chart as well And then oil down here at the bottom had about a six and a half seven percent lower close from where we finished on Friday So overall again question marks and whether or not this tentative Meeting that they're going to hold via teleconference on Thursday will yield any type of result It's whatever one's kind of looking at this point in time So, yeah fuse. Let's go through a few things then Starting off with this and we transition my screen. So here we are back at the coronavirus COVID-19 update it from Update from John Hopkins and you can see total confirmed cases now coming up to a 1.35 million the US now at 368,000 overall in terms of total death tolls still Italy Spain France now the UK followed by Iran and New York City for the moment, but underpinning this general risk on kind of kind of short-term positivity if you like at the moment is Still what we were looking at yesterday. It's the idea that around the world We are seeing some of the key hotspots Globally are starting to see a general decrease in the the death toll now China overnight reported no new Coronavirus deaths for the first time since the initial outbreak So that's looking at China down here at the bottom and then you've got Italy have the lowest number of Coronavirus infections in nearly three weeks France reported a continuing leveling off of cases so you can see here now this kind of this blue line plateauing New York Governor Andrew Como and this has been obviously Right in the epicenter of the US outbreak has said earlier today that deaths or yesterday deaths were showing signs of hitting a plateau as well The US is still expected to peak not for another couple of days Anticipated about nine days time the 16th of April is what People are saying the cumulative number of Americans likely to die from COVID-19 though has been revised down to 82,000 For around 94,000 that they were Hypothesizing about a week ago. So these things are being seen remember what I've been saying in the briefings for last Week or so has been about identifying the steepness or shallowness of the trajectory as it changes day by day And at the moment globally if you're looking at Italy Spain, France Even in the US and New York what we're starting to see is it's becoming ever so slightly more shallow now Obviously, it's too soon to start making grand conclusions about you know, we're this is it now We've hit a peak and it's all about recovery. I don't think we're quite there yet As I said, it's going to get worse what gets better in the case of the US over the next pretty much nine days UK is still somewhat accelerating as well So this is the type of thing though There's a trigger point that will or could spark the intraday shift in sentiments if we start to see those numbers creep back up Then we need to properly see a bit of reversal. We're fairly correlated at the moment So a great graphic from JP Morgan last night I don't quite have it to hand right now, but it was on my phone on Twitter And basically it was it was mapping out the corona virus Cases and the the volatility index and basically it just moves absolutely in sync So if you're trying to determine volatility will really need to be tracking these virus numbers as we've been doing but coming back then to the UK this was obviously the The news that broke last night and let me just show you the pound and as I said I was actually kind of sitting here just doing a bit of prep work for for today and I caught the news when it came out. So this is what it looked like I'm looking at a five-minute candlestick here in cable and Boris admitted to the ICU We saw an immediate downward move fairly fairly sharp actually. However There was you know, given the time of day. I mean, I think it was about eight o'clock Yeah, just after eight o'clock. So it did take a bit of time for the pound to really move I mean, you're cooking at five ten fifteen twenty. It was about a half an hour move before we actually got to a Level of you know, some support which was down at the load that we printed Back in the prior day session in the overnight Asia Pacific session. You can see here Hopefully it's just above my camera feet In these areas and the market responded there first But then as soon as the Asia Pacific session got underway, obviously Fairly illiquid is the cable future, which I'm looking at here during the Asian session They just popped it down lower came back up to that same level again. It's a quite volatile overnight However, we have kind of etched out a bit of recovery. You can see the two points of real Turning that we've had from a technical perspective have come with that low point that was seen yesterday after New session that again has provided quite a nice platform or floor if you like for price Then we've got this fairly short-term trend channel That's now in play that I'm just quite keen to watch this morning to see how it plays out You can see just coming up to the upper bound of that channel with the R1 sitting here Just testing at the moment back to flat now for cable despite then all of the variants in price That's being seen on the back of the Johnson news if actually look where we are if I just draw that horizontal line Just drop it right there We're exactly to the tick of where we were for that news came out So despite a a shift and a move down to kind of 121 75 We've come all the way back up to trading up into a 123 hand or at the moment So strong reversals being seen since that point now One of the things is who's gonna take over while foreign Secretary a member of the cabinet already Dominic rab is gonna take over And I think for any of those who are not based in the UK Dominic rab has been around for a while in terms of the Boris in a circle He's been fairly trusted. He's a Euro skeptic. He's a former lawyer I think he's pretty well equipped to take over in a fairly With with a degree of continuity at this point. I don't think it really creates too much Disruption to the on-going policies in which the government in terms of tackling of coronavirus He's a fairly assertive astute character In that sense and he was one of the the candidates was who was running for prime minister Only you know several months ago. So yeah, I don't really think I wouldn't get of that mindset of you know It's gonna weaken the pound just because raps come in I think he'll do a decent job in the replacement until the prime minister gets better, of course But yeah, technically any move above here then obviously I'd just be keeping an eye from the range from yesterday's session The kind of range high being a kind of a band looking at 123 28 up So the initial highlight was seen around midday yesterday if we continue to move any higher here With that trend line also in play So that was the British pound We are gonna cycles through a few different charts as I go through the news because there are some interesting levels The next thing I wanted to have a look at was this and we just transition my screen. This is gold gold rallies The spread balloons investors charge into Boolean and gold futures surged far above $1,700 an ounce to the highest since 2012 you know, it's quite an incredible move because you remember people what I think are a little bit hesitant to to jump into gold Or have been just given the nature of these kind of margin calls when equities were getting hammered That was leading to then the kind of exiting of these profitable positions in these more medium long-term Gold bets and we're seeing these big flushes in in gold But the big difference between now and then is equities are rising and if you actually look at the volatility index Generally, it is decreasing at this point in time So that gives them further confidence to reassert some of these these long positions in in the price of of gold Looking technically, I guess this down makes a bit more sense than looking at the near-term price action This starts to encapsulate the last two months and you can see At around that, you know, this is this top level here where I've put these ellipses on the test around the 24th Again from the 9th and again on the 25th before the break that eventually came late yesterday evening into the back end of the US Session this is the psychological 1700 handle so you can see here long term multi-year level and how the market has respected that as far But the fourth real extreme test of that we saw an explosion through it then coming through into the Kind of Asian hours, which saw an eventual high point at 1742 overnight But you can see the importance of the break getting it firmly above there Just help it accelerating some of the price action and and then you know just broadening out the time frames just because some of you You might not have been in the market Back nine ten years ago This is where we're looking at in context of really the all-time highs that was printed back in September of 2011 And that was when we were trading at 1920 in the futures you can see now though We've we've got to a respective point of I guess quite natural resistance here from where we printed This is looking on now on a monthly candlestick Up around the December 2012 high any break above here though it does Open up the door to push really towards more 1800 and 1800 then being that November 11th Feb, October 12 highs that you can see a kind of cluster here of Resistance and then the next level then is not really up till here. So if you're looking at three longer term Targets on the upside really this is what you're looking for more concrete break of that deck 12 high that pushes back up So then around 1800 and those end of 2011 2012 highs and then you've got the eventual time high just above there But yeah, why why is this happening? Well? Couple different things of course. I mean yes coronavirus numbers we've discussed Have been plateauing in some places were in fact decreasing or no new deaths Reported was the first time the case of China So that's a net positive for equity index futures at this point But at the end of the day the economic impact is still going to be Incredibly severe way more media beyond that of what we saw from the global financial crisis So seeing a non-farm payrolls number next month in the multiple millions would definitely not be surprising I remember the peak in the global financial crisis was for 800,000. It was a much more graduated move This is a much more immediate and sharp and impact given the fact that it's complete shutdown because of a health issue Being the pandemic So people want a little bit of exposure for this and getting their hands on some on some Boolean essentially The prospect for more stimulus as well, you know, I find it a bit of a watered-down argument Does this in the end create, you know inflation concerns and people want to hedge that perhaps and then further signs of Dislocation in the physical Boolean market as well as something that people been talking about and what this is basically saying Is that two two weeks ago? I've got some notes here supply channels Essentially if I just switch over supply channels were strangled as refineries shut down Flights were halted curbing sellers capacity to meet commitments to deliver the metal So if you think about it then there is an underlying demand at the moment to get your hands on some of it given those supply constraints so all of these factors just helping just You know support the price from a fundamental point of view and then from a technical point of view, of course Just getting a little extra kick as we've broken more firmly through that that longer-term level around 1700 And again counter-intuitive almost because there's you know looking at those factors Whereas the equity market seemingly It's still focused on this more short-term responsiveness of the numbers on the pandemic as they evolve Okay, the other big story of course is oil Global oil powers stumble their way toward a historic deal. Well, let's just have a look at the price of oil here This was The gap down that we saw the recommencement of trade. We were looking at this this time yesterday Why did that happen? This is about a 10% drop from where we rallied to the closing point on Friday Well, a lot of people skeptical of course about whether or not a deal can get done On the tentatively scheduled meeting on Thursday That remember had already got bumped from Monday to the end of the week and that was why we gap lower markets Then rallied people still feeling a little bit Optimistic, however, we ended up settling on the day still quite sharply lower from where we finished at the end of last week now a Couple things to be aware of here Here is a kind of checklist if you like of points that I put out on Twitter and And these were what I classified as key risks to look out for in the crude market in the coming days The first one of course is the trajectory of the virus. We've talked about that already The next is the potential for further delays now some of the latest comments that I've seen so far that Russia and Saudi are set to curb their production significantly According to people familiar with the negotiation the US is more likely to offer up the kind of gradual output reductions Trump said Monday OPEC has not asked him for oil production cut and remember Trump is very much not willing to be bullied by what he calls the cartel at this point Remember it was only about Probably 12 months ago that there were some murmurings on Capitol Hill about putting forward a piece of kind of old legislation back on the table called no peck which is basically America trying to sue OPEC for manipulating and monopolizing the price of oil so Yeah, will the US get on board? I think it's very pivotal at this point And this is where we get to the next point which is Trump tariffs a lack of participation in the deal Will Russia and Saudi really want to cut a deal if the US and Trump are not going to be involved And given how Trump tends to be quite volatile of course trying to assert his dominance in these types of situations on the global platform Again big risks to whether or not given the the sharpness of depreciation of oil There's plenty of space to come back down again if these things don't follow through There's then been talk about Iramco, of course, Saudi's kind of state owned oil firm They've been holding back on issuing their monthly pricing lists Apparently just waiting to see what happens first if you think about it It's kind of like keeping a gun on the table. They've threatened before remember when we saw a steep Sharp decline in prices that they could discount heavily Against their competitors for any new customers by as much as 20% So I guess they're holding that back to see what the outcome of the meeting is But it all could get messy quite quickly and then there's this idea of the depth of cuts You know, I as I was suggesting yesterday, you know, Goldman's talking about the mid 20 million Barrel per day impact that the demand implications of the pandemic, you know, if you're going to cut 10 million if that is the case Well, you know, how sustainable is that to really underpin our support and prices that sees oil going from 30 to 40 to 50 Slightly questionable at that point if you're thinking about that equilibrium of supply and demand The video teleconference is Scheduled to happen at 4 p.m. Local Time So I guess this is talking I'll assume Vienna time On Thursday followed by talks then that's now going to happen is energy ministers from the G20 and then meeting at the end of the Week on Friday on Good Friday is my understanding So that's slightly a positive sign. I would say so they're gonna have their teleconference called Thursday the Energy Minister the G20 what they will attempt to do then is Broaden out the net beyond that of OPEC plus and the US because if you start bringing the G20 You start to bring countries like Canada and Brazil and so what they're trying to hope for here is a complete Unprecedented overall oil producers across the globe coordinate to take some kind of Considered action here to address this this relative low price in historical sense So yeah definite risks But there's definite some other points to monitor what I would say is that we're all you know Still here watching the situation developing is a lot of tweets a lot of rumors. Excuse me coming out yesterday So I think you need to be quite agile if you are trading the the crude price at the moment Okay finally Just a quick word the RBA they kept rates on whole quarter Percent overnight unchanged after the emergency meeting That doesn't know real surprise really not much movement in the Aussie the Aussie trading a little higher But I said it's just mimicking general sentiment Seen across the broader market and the Asian indices overnight With China reporting no new corona virus deaths for the first time since the pandemic emerged Canada-wise, what have we got? Well, we've had some data ready this morning German industrial production came in a plus 0.3 percent Expectations were for minus 0.9. Has that really moved things? No, I don't think it's particularly that important I know that's market beating but The variants of this data set tends to be quite wide And I think there's just other bigger things at play to be quite honest The Dixie is down in the currency market about third of a percent So that's helping underpin the recovering cable, but also Euro-dollar trading up and around its R1 up 38 pips for the moment and then Just going through the the actual day In terms of things of more importance Not too much to be quite frank You got ID ID tip economic optimism jobs job openings this afternoon Of course any job-related data could be quite interesting Just give the context in America at the moment And then you've got the three-year-no auction the weekly API crude or infantries as well come from the US later This evening. All right. Well, look, that's pretty much it. I'm going to let you get on with things Again, if you have made it this far and watching the briefing And you do not subscribe to the channel, please do hit that button subscribe updates coming every day With that, I wish you a good day ahead. Thanks very much guys