 Okay, very good morning to everyone. Hope you are well. It's Wednesday the 7th of August I'm just going to have a quick recap and review of all of the major news from this morning and The general sentiment for markets to get things going here in London. So first off Let's just have a quick look at the S&P 500 from yesterday Obviously after seeing multiple days of selling pressure on the escalation of the trade war between the US and China Markets had decent bounce None other than Sam North calling the bottom once again buying the dip Was a great shout Seeing the market is generally just oversold And I know a lot of you in the chat were agreeing with him this time yesterday and certainly a decent recovery For the moment at least in some of the stock markets, particularly by the closing Wall Street The S&P we're bounding around 1% after the 3% downward move that we've seen It's quite common. That's not to say that the downward trajectory of US equities is is is over But very rare unless there is a continuation of fundamental catalysts for a market to just go down down down day after day after day I don't think I've ever really seen that happen Consistently for a longer period of time other than right in the midst of the financial crisis And we're nowhere near that type of Kind of red alert status at least for the time being so yeah a bit of a recovery and if we just have a quick switch over to the other charts The DAX positive this morning Euro stocks likewise both trading above their respective pivot in the futures market Currencies are pretty quiet. The dollar index is essentially flat for the moment The kind of notable movers here are a little bit reflective But I guess the the monetary policy environment that's because we've had more interest rate cuts We're gonna have a look in a second at the Reserve Bank of New Zealand taking quite drastic measures overnight seeing sharp movement in their currency India have done the same and this all comes amid these kind of growing risks and This this slowing of global growth, which is we're coming now the baseline kind of scenario. So the asset that's been Benefiting on the back of this of course has been after a six-year high We now had a technical break on the previous test of the futures of the high that we had on the prior night at the reopening of Globex on Sunday night when we printed up at around 1486 87 in gold Broke above that last night came back to test the level then really just pushed on and of course now psychological levels up and around these Record high territory 1500 bucks now trading gold per ounce in the futures market So very interesting to watch that as certainly maybe not so much this morning I think it'd be too surprising to see 1500 act as a bit of a near-term Cap to price action not until the US come in I think when the US come in then it's going to be decision time Do we now break that and continue to just push on to the upside or does that? Continue to act as a decent psychological barrier for the price movement as I said not unless something new develops in a negative sense in order to Create another kind of push to the upside but definitely one to watch today and then likewise talking about monetary policy because if you look at the the US 10 year Up another 11 ticks this morning. I mean there was a day member last week when we came in It was up sharply. It's up another 11 today. It's just you know to see the The US Treasury market up to that degree. It's becoming quite normal fair and and generally speaking that is unusual To see that type of size of price movement happen overnight now That's the interesting point When we look at you know often new Inexperienced traders will ask me how do I gauge intraday sentiment? What market is driving? What and typically that's been a North American focus Obviously Trump right at the epicenter of all things that are kind of leading market direction However, I would say right now the new cue for market sentiment intraday is definitely coming from Asia And it's pretty much coming from just one single number And that of course is this which is the fix the Chinese Yuan Weakens overnight after the PBOC set its fixing closer to seven a dollar Now obviously this has been that that talking point so far this week and what led to the the stock market route on Monday Because they allowed the currency for the first time in what 11 years to weaken past that psychological seven threshold The remnant be against the dollar However yesterday there was a little bit of reassurance Because China acted to stabilize that with their fixing Um However, what happened overnight was the central bank set the daily currency reference rate marginally stronger than seven a dollar Basically at six point nine nine nine six So ever closer to that that level and I think that's made people Again, a little bit apprehensive gold very sensitive with those technical breaks and hence he had a decent pop overnight in the upside And then consequently T notes following also with some of the central bank action Does this put pressure on some of the western? Central banks to come markets still very much expecting easing from the ECB renewed QE as well is the growing consensus And is the pressure on now for power to deliver with more than just a mid-cycle adjustment is what people are asking So, yeah, definitely I would say this needs to be watched the the way I'd interpret this is The more they set the fix above seven. So let's see here. This is the PBOC fixing in in the black line And the Chinese remnant be spot price above And so you can see it's testing its extremity of the two percent trading band of which defines the the Chinese currency um And as such The spot price is weakening to the extremity of what would be the the maximum Weakest point the currency can get now the more that they allow that to happen the more then That's probably going to stoke more trade um Escalation if you like with the us in confrontation And so that's how I'd interpret this as long as they continue to fix it at around seven And if even if it does go above as long as it doesn't start to shoot higher with these fixings Which I do not anticipate that it will do so. I think now that the market is used to this development I don't think it's going to carry such firepower as such like it did on monday I think now this is just a new normality for for china to to manage this situation Of course their economy heavily impacted by these growing tariffs and with that additional 10% announced kicking on september 1st from trump on that final 300 billion this for me is just Rational in order to control that domestically So yeah, definitely needs to be watched going forward Is is uh is the key takeaway the other thing that I thought was quite interesting with china was this overnight um I'll show you the picture See this is a massive explosion of targeted missile testing Unidentified location in north korea Now you remember how how many weeks ago was it when trump had an historic handshake and crossed over the The the the military zone divide between north and south korea was what eight weeks ago And now kim jong-un is test firing tactical guided missiles again So such is the world of politics I my view Here is the north korea. There's a distinct pattern between break downs in the chinese u.s trade dialogue and Military activity in north korea Whenever the trade breaks down north korea starts to become more active again now for me. This is a direct Um correlation of china and its relationship with north korea and how donald trump Cannot be seen now. He's brokered this peace agreement and he's made such a big deal out of it What I think would be an interesting extra dimension from china's negotiation stance is to create more um tensions in the korean peninsula Now what i'm thinking here is then that china is the only country that can effectively manage north korea The americans just cannot do it It'll be too disruptive in what is one of the most highly tensions areas in the east china sea in the globe So for me, this is china's work. This is not north korea And this is this is china saying well as much as we might retaliate in tariffs As much as we might stop buying or agricultural goods As much as we might start You know all these different facets of on the trade more more visible front. We also Um could jeopardize your ability to appear like you're controlling this situation and trump's not going to want that to happen So I just think this is abc political gamesmanship going on here between China in the us is this anything to be apprehensive about from a north korean perspective Absolutely not You know, I know it seems strange north korea testifying tactical guided missiles Is business as usual as far as markets are concerned? And I think market participants quite clearly as i've explained see through this as a political Uh strategy rather than it is anything that could heighten confrontation say north korea japan and so on So markets aren't going to react to this but it's an interesting dilemma and pressure point that china can push Beyond the obvious when it comes to managing trump having been termed a currency manipulator just two days ago All right other things. This was the big one overnight Um quite a shock to markets The reserve bank of new zealand the rbnz Cut their cash rate by half a percentage point 50 basis points Remember the fed there was a bit of a talk a few weeks ago about 50 25 and we were we were quite firm of the belief And the fed did deliver that 25 basis point rate cut the overarching strategy being that you don't want to run down your ammunition Of subsequent cuts thereafter if needed But new zealand have gone, you know the full monty because they cut their Rate by more than expected markets were were primed for 25. They went for 50 They lowered their economic growth forecasts They projected it would take longer for inflation to reach the midpoint of its 1 to 3 target range And importantly the governor asked if today's cut No more or does the cut mean no more to come The governor of the rbnz replied no today's decision does not rule out any future action The rbnz is well advanced on developing a suite of tools for unconventional policy Such as negative interest rates asset purchases forward guidance and other forms of intervention So the rbnz have really gone to town overnight interestingly with those unconventional measures these Antipodean central banks the rba the rbnz did not have to Deploy things like qe Their rates were higher. They've managed to manage their economies appropriately by using the blunt instrument of just manipulating the The rate of interest But rbnz getting to the point of well, you know what we're going to have to start it be prudent and necessary to start planning that we could go further and I even think they even mentioned about taking rates negative Such as what we see in of course in eurozone with deposit rate So this was the kiwi overnight If you look at the ozzy as well done the same thing and the ozzy is just coming up in the future space I can see it's a quite an interesting level. So i'm sure sam will go into that in more detail but this kind of drastic action and commitment for more with it's almost seeming I don't know. I don't want to use the word inevitable, but there's so much pressure on the us I do think that they're going to not just ease once But further beyond that whether that happens in 2019 or 2020 I think trump's going to have to get his way to keep the stock market up by the end of 2020 That does require more cuts And so, you know, the one trade that does look good is still that gold trade You know, if that does if we get a synchronized global monetary policy easing kind of harking back to the few years ago There's no reason why gold can't go 1600 1750 And I know there's a guy sat not far from me that would be getting wet at the whistle with me saying those kinds of numbers Here he is When it comes to when it comes to gold prices Yeah, I mean to be fair a stopped clock is right twice a day. I have been going on about this for about 18 months That's finally happening And uh, well for now. Yeah, it's just good to see it on this train. I mean if you look at the trend really for the last Two months. It's it's quite phenomenal But not surprising to see when you've got easing global easing and global tension at the same time Cool. Thanks. Well, so yeah, we'll definitely been committed to that trade. So good to see that paying off Okay, final things Just have a quick look wti crude futures Uh, really didn't move too much on the api data overnight. This was what happened last night We had a drawdown in the crude figure of 3.43 million and this does mark the the stocks falling for the eighth week In a row I think at the moment though the downward pressure on oil is not so much an infantry situation but more this kind of latest adaptation of concerns about demand Given the the recent trade war rhetoric Um, and the headline figure not too far removed from market consensus A drawdown of 3.43 was against expectations of 2.8 Cushing a draw of 1.6 million gasoline pretty much in line a draw of 1.1 million to still it's a build of 1.2 million so no real movement overnight or too much in wti crude and then as far as brexit goes I can see the pound seeing a little bit of movement Let's just quickly check on my charts. Is there anything I'm sure sam can fill you in if there was anything fundamental I can't see anything on the feeds Looks like it's just a technical break above its pivot level Which was restricting some of the price action late in the asia-pacific session more than anything, but I just wanted a quick word brexit not a great deal going on at the moment To be honest, I don't think there's a particularly large degree of any headline risk when it comes to trading the pound right now But that will come in due course of course in the coming weeks The headlines opponents of no deal brexit hardening their plans to block johnson's threat for the moment obviously The official line as much as you might not believe it is that boris johnson saying he's not going to call general election But corbin has signaled early no confidence vote in the house of commons Some belief that that could happen as soon as early september This of course could be quite interesting given the majority of boris is at one Given that welsh by election we had last week The the government then has 14 days to try and see if it can sort something out if that doesn't happen Then that can lead to the the snap election scenario And then dominate grieve as well as a lot of the remainers From the conservative party that were given the chop when the cabinet reshuffle happened when boris came in I've all said that they could potentially form their own slight alliance So yeah interesting times to come right now I wouldn't say any of this is particularly new and as far as I would say trading the pound I would be looking more on the technical setup and movement of the dollar on the back of the trade stuff rather than anything shocking to to come out of brexit So much today all right from a Canada perspective you can see here in india india also did cut rates And that happened overnight their repo rate now 5.4 percent Expectations were for 5.5, which would have been technically a 25 basis point rate cut But they actually executed a 35 basis point rate cut quite unusual Comparative to the western model, but yet a deeper rate cut than expected once again from another major global central bank going further forward The morning very quiet in fact And so again, not too much in the media aftermath for fundamental catalyst I'd say to really trade this morning very much So very interested to watch that gold market at around this this 1500 Level and then really for the us to come in when comics gets underway and the volume picks up in the gold market That definitely will be one to watch you got the all inventories later of course and then potentially just any further response out of US president donald trump after what's been the weakest fixing level that we've seen Out of this recent development from the chinese central bank with the pboc fixing Basically bang on seven overnight. So i'm sure trump will have something to say about that, but interestingly trump himself has been relatively Passive he knows now that he does need to control this to a certain degree Kind of expecting that to continue for the moment. Okay. Let me hand you over to sam. He can look over the charts And I will catch you guys later on. Thanks very much Hi guys. Good morning Let's have a quick look over We'll start with a kiwi today and then bring in the Aussie After last night's or overnight's decision You can see a big push to the downside and and what's interesting here and I tweeted this yesterday Just seeing what what people were potentially thinking about the kiwi and I'm just going to put this on to A weekly chart So here the first point of this trend line going back to 2015 and and you can see that broke overnight So obviously the the fundamental reason behind it But also the technically that bottom part of that that trend really really breaking to the downside we were for Well, it seems like four years getting squeezed either way And a decent push lower obviously now Or certainly on the futures the lowest we've been since January 2016 So it'd be interesting to see what happens here for the kiwi if you are trading or still have some part of a position on here Obviously the the next really key point market related level is Is still a fair way Down that 19 or the week of the 19th of January 2016 before we do get that 2015 low So price is breaking out there and that follow through to to the Aussie as you would expect Weakening that as well and that again for the Aussie is now the the the weakest We've actually been for I mean just bring this into picture to the left hand side since 2009 for the Aussie Against the dollar there so massive move we Beginning of the year obviously made that low came back not too long ago to find support Around December time was it December time? Yeah, December pushed higher and Yeah, you can see since then it's just been drifting down and so quite low for the Aussie more intra day I guess for both the kiwi and the Aussie if you can get any type of retracement it would be you know good to To get short again We're keeping an eye on the the previous lows of this week for for the Aussie at any point If you could get up there for for a short as we just testing the the s2 again was a previous low So not the worst place in the world for a short as well perhaps As and and mentioned not long ago the pound just pushing above that pivot You can see certainly since we made that Yearly low we've got the market just drifting higher While we've had a couple of goes at trying to break this trend you can see there on the fifth The beginning of the week little false break and but you can still see relatively well respected Opportunity may come on a break of that to the downside. Certainly the resistance points slightly more choppy You can almost say 122 13 A fair bit of resistance at that point. So price getting squeezed out of the way I think at the moment you would probably favorite to the downside as a better opportunity But each time we've we've come to that area and we've failed to really go so Treat with caution it might be that you want a further headline Or more negative sentiment to drift back into the market or even a bit of dollar strength Before taking this trade on Euro We we had obviously a big push overnight yesterday and then drifted lower the pivot acted as a good level support And that pivot level is also Just below there with the highs that we had back on the 31st So understandably found support drifted on and we're now into this new range if you like one 12 53 And then of course that lower point that we had yesterday just above 112 so that would be somewhere I'd be focusing on just below where we're trading now was also the initial low of the morning Then the evening so 112 25 I think you've got your free key levels and points of interest You're out there. So I'm going to quick. Let's see if we can get any kind of trend lines from those lows It doesn't necessarily look All too good So I keep it to to those levels to the higher the day to yesterday evening's low And then the low of yesterday and that 112 handle will remain to be pretty key as well S&P let's get it on that daily chart because That 200 day moving average is back and back with a bang and you can see Just going to remove the pivots here Put that 200 on and you can see just how good yet again That was the failure to close below The 200 day moving average and we're we're back above key levels to the upside And this is looking on that daily chart is really anywhere around here 2880 not just because You know, it's all over twitter as well as the people looking at it But just from a price action point you can see just how important that whole area was back in june and into july You want a line in the sand that's it there. So whether we can close Above or below today will be key I think that's you know as as big a level as we've seen in recent times for the s&p around here So really keeping an eye first retested that yesterday Or you can see a strong one to the downside and uh, we did actually bounce Tested my map to 26 points of that. So really key level keeping a close eye on that That wasn't to hold and sure we can start to drift down and you know, I know people will be looking around 27 30 As well. So almost uh, okay So this has to hold this week or we could drift low if we get back above I think you get a faster move to 29 Uh 11 at the corner of my heart. I've just seen safe alley where in the mega hat Which is uh first believe me Um, let's get this on camera actually is to see it suits you down a bit. Yeah Where's the s&p s&p trading just under 28 a don't let them win some don't let them win We've got a a long time bear in the office here who will tell you it's going low Um looking elsewhere gold, of course up to those highs and it's just doesn't want to stop Does not want to stop 1500 trading Uh, I was just looking at a chart this morning from when gordon brown sold Gold at 288, which this seems incredible now But this market going higher and and for for the time being you don't necessarily want to get in the way of it Yes, there'll be opportunities intraday to get short but this Very much a case of looking to follow the trend speaking of trends from the low of the first You can see just how well we respected that all yesterday If you want to stay longer but and you know as long as it's above this trend It's not a bad option to perhaps to to go with We are knocking on the door around the high one two three times on the hour So that's something to perhaps keep a close watch on uh as well Oil to wrap things up. We have a quick look at the decks In another draw but oil still drifting lower small range this morning got a fair bit of uh support That we just can't break through there Just going to put this on to 240 chart and just zoom to the left hand side and look at levels below where we're trading And let's get this trend line on from that low of june Direct that to here that's something that I would have on just because that third test could well come in around 53 a break of that And obviously we could start pushing to the downside also quite an interesting Trend here that starts on the low of the second. Where was the low of today? Well, you get that third test there. So quite a big area You do have some previous lows in the mix but these trend lines Certainly worth having marked up on the chart to the upside if we were to to drift you can see those highs From today just getting squeezed in so again worth having a trend line on there But the pivot certainly looks pretty important 54 the pivot the low of yesterday So as your technical levels of interest just below where we're trading and around the pivot We'll be ones to keep an eye on the decks on the open Ready to be quiet but pushing above the pivot not too long ago Trying to sustain that got some resistance and again This would be more of a zone for me rather than an individual level That I would have marked up there. Can we get back up up there and stocks 2880 in the u.s But the s&p may well be the focus if that was to hold and we drift back lower And almost below the pivot those lows from today and yesterday evening could of course come into play As usual any questions, please do let us know Stocks a key turning point the pound still getting squeezed Is the euro going to start drifting lower that one 12 handle certainly one to to focus on kiwi And ozzy not looking good and oil will course that day throughout later Remains important, but yeah any questions, please do let us know and I hope you have a great trading day