 All right, good afternoon ladies and gentlemen and welcome to this month's non-farm payrolls webinar on Friday the 6th of March. Colin Szydinski and myself, I look forward to hosting you for the next half an hour and hopefully navigating the non-farm payrolls numbers which are due out in around about 15 minutes from now. First and foremost we're going to have to do the obligatory risk warning with respect to the webinar for Canada jurisdiction in the UK and Ireland and once we've got that out of the way we can pretty much crack on. One thing that I would say ladies and gentlemen is that due to the bad weather in the US don't laugh but the numbers may be slightly late, they may be slightly delayed, they may not come out at 1.30 on the dot. Welcome Colin, I can hear you crushing around in the background there. So Colin Szydinski my colleague in Toronto has just joined us, say hi Colin. Hi everybody. And as I say Colin and I will be basically taking you through the numbers and let's first and foremost show you and talk a little bit about what we're expecting. So bringing up the Bloomberg first and foremost to give you an indication of the numbers that we're expecting, I'm just going to scroll down there. As you can see there the top line there US payrolls data face delay as weather hinders the DC opening. So I think the general consensus is we'll get them but we may get them in a sort of three or four minute window after 1.30 which should make for a particularly interesting data release. The weather has been positively awful this week on the East Coast. They've been, New York has been shut down and yesterday when plane went off the runway at LaGuardia and it's just been crazy. They've had really, really bad weather all over the East Coast again. It's been a wrap. That's one thing. About the whole month has been, there's been a lot of storms on the East Coast this month. Which brings us back to the payrolls numbers because if we look at what the payrolls numbers were a year ago and that's basically down here, this column here, column C, in January and February and December they were 84166 and 188 and we know from a year ago that the weather did have a significant downward effect on the payrolls numbers. I think more importantly than that the revisions that we saw last month were very, very positive and I think one part of why I think investors are so positive about the U.S. economy I think is largely because of how resilient I think the U.S. labor market looks if we look at the November number that was 423,000 jobs and then we got 329 in December and 257 in January. What we've got here is a slight difference of opinion between Colin and myself about what to expect with respect to today's numbers. Now we got some ADP yesterday and the ADP column is in column B here and we also saw a significant amount of revisions to those numbers after the data release earlier this week and again we've had a significant downward move from the 284 that we saw in November down towards 212 over the course of the last few months. So it does appear to be a little bit of a direction of travel here with respect to the payrolls numbers. Now that's not to say that we're going to get a disappointing number today but the expectation is we're going to get a number in and around 240 now. My hit record in terms of predicting non-farm payrolls numbers hasn't been particularly great of late so I'll admit that but when you actually look at the weather and you also look at the fact that we've had some concerns about the effects of the decline in the oil price as had on the oil sector, the oil and gas sector in the US, you've got to think that some point along the lines that will start to trickle down into the payrolls numbers. So Colin why don't you go ahead and basically tell the clients what you think is going to happen and then I'll follow it up with what I think and I would suspect that the truth is somewhere in the middle. Yes indeed because Michael is in around 190 and I'm around 240 and the reason I've gone a little more bullish this time, those of you that were with us last month will remember that I had gone quite bearish on concerns about layoffs in the oil patch and I ended up being way off and quite wrong so I decided okay well I decided this month I'm going a little bit more bullish with a 240,000 increase gas which is slightly above the street at 235. I'm also looking at a 20k upward revision to last month to around 275. So I'm thinking that we still might have some positivity in the numbers however I've also been telling everyone that I do think the risk to this month is to the downside, the sweet spot remains 200 to 250k and that's been the case for pretty much the last year now and we've seen the numbers in there for at least the headline numbers for most of that. The reasons I do think that you could see the amiss on that where it comes in lower certainly number one would be the oil patch and number two in addition not just in terms of the drilling activity but also there's been refinery and strikes in the United States which actually have pushed up the gasoline prices now that there's working its way through the system in the last week or so and Michael has another number of other reasons to suggest that the risks are to the downside this month. Yeah I mean obviously weather affects the side. There's also the fact that there was a port strike as well on the West Coast and that could well have impacted the payrolls numbers in February and you know notwithstanding the fact we've also seen weekly jobless claims start to edge higher again. Certainly if you look back over the course of the last few months I think it's been very rare that we've seen numbers above 300,000 yeah over the last three of the last four weeks we've seen numbers come in above 300,000. Now generally you know but generally there is a little bit of a correlation between the jobless claims as they go up generally the payrolls go down but I don't think it's any coincidence that while we've had sub 300 jobless claims that the US payroll numbers have been so good so the fact that we're back above 300,000 and have been so on a fairly regular basis does really beg the question as to whether or not payrolls growth will be as robust as we think that it is. So you know from my point of view I certainly think there's room for disappointment and I also think that there is potential for a little bit of a downside disappointment. A significant rebound in the dollar or a push higher in the dollar over the course of the last few trading sessions with the euro dollar at 11 and a half year lows, cable at its lowest levels for nearly two years and I think as a result of that maybe a good number is already priced in. So with that in mind let's look at some of the key support levels on cable and euro dollar and look at some of the key resistance levels on obviously dollar majors like dollar yen. Also have a look at Aussie dollar Canada, Aussie dollar, Canadian dollar but let's start off with the S&P 500. Now this is a four hour chart that I'm looking at here and you know the US market does appear to be looking a little top heavy. Certainly there's good support around about 2084, 2085 certainly on the basis of that chart there which I think suggests that maybe there is potential for a little bit of ebbing momentum. Now that's a four hour chart if we go to the daily chart that also gives us a little bit of an idea as well. We've got a rounded top coming in here. I mean I think there is a little bit of concern. I think the long shadows here suggest that there's good demand because we're not closing anywhere near the lows. That being said you know will a very positive number actually push the stock market lower? Will a negative number, a negative number is below 200,000 actually perversely push the market up and I think this is really what we've got to get our heads around. What will a positive number do i.e. 250, 260? Well that could actually potentially push stock market lower, push the dollar higher. Negative number that actually could push the stock market higher and actually push the dollar lower because it will keep the Fed on the back foot potentially or away from a rate hike. So I don't know whether there's anything you want to add Colin with respect to the narrative that I've just outlined there I think you've got definitely on that the response from the market. I think you're absolutely right. The other thing I note with this a couple of things in the end the Dow chart looks pretty much similar and in the NASDAQ's leveling off two things. First of all if you had looked at the Dow and the DAX yesterday and you all-time high for the DAX did not see it in the Dow. Second thing was if you look back knowing you're seeing a bit of a rounded top here but you had breakouts to new highs by the Dow and the S&P and they're not very enthusiastic. The S&P got through 2100, it only got to 2120 and then it started faltering. You're not seeing this huge push higher in the markets even when you've gotten new high and people are still kind of cautious about it. So it wouldn't take much necessarily to spark a bit of a correction here. Not a massive one but you could see a few percent pullback. Yeah I also think the stronger dollar could actually hurt US stocks more than anything else and I think that's why yesterday we saw the German DAX push higher so significantly. I think because the Euro weekend and obviously a weaker Euro is good for European stocks because it makes exports cheaper and at the end of the day the German DAX is probably going to be the biggest beneficiary of that. It's already up to day on the back of this so I think really with respect to European markets I think the key drivers go on. You go ahead finish that and then I'll mention something. I was going to say the key driver is probably going to be what the Euro does with respect to what the DAX does and obviously keeping an eye on the average earnings numbers as well because we did see a spike last month and I don't know whether you want to go into that. Yeah what I did want to mention was actually looking at earnings and I was just saying the US earnings season, one of the takeaways related to the dollar was companies were starting to complain about the higher US dollar and crimping guidance based on foreign exchange. Now if we're coming up to, we're coming up on 8.30 here. We want to mention the average hourly earnings. I'll just speak to that for a second. So if we're looking at, if we go in the scene that there's layoffs in the oil patch something we've got to notice, those are really high paying jobs. Those are not part-time jobs. Those are jobs that are paying $80,000 a year like they're serious money that's being, that jobs that people are losing. So if that's the case that should drag on average earnings. So if you start to, you would expect the average earnings to probably get back to two or even under two based on that, on the loss of high paying jobs. So if you don't get that, it would suggest that you are still seeing some pretty strong wage inflation in the US. There's also the additional factor. I think the, the spike that we saw in January was as a large result of 23 US states bumping up their minimum wage by in excess of 10%. It was a good number and actually some US states bump their minimum wage up by around about 21, 22%. So that will be reflected in the average earnings numbers. And I said at the time, yeah, it was dollar bullish, but, you know, is it a one-off? We have also had Walmart talk about raising their average earnings and putting all their staff on the minimum wage as well. So certainly in the short term that's going to be positive wage growth but these are all low paid jobs. So, you know, we've seen a significant rebound in the labor market but we haven't seen a significant rebound in US retail sales. And this is something that I really, really want to sort of bring to your mind. If you look at the retail sales numbers that we've seen over the past two months in column D here, we've seen a contraction of 1.7%. So we've got US retail sales numbers next week on Thursday. So again, you know, even though we're getting all these new jobs, US consumers aren't going out to the shops. They're not spending money and they're not spending money. What they're doing is they're building up their savings. Personal spending slipped back for the second month in a row. So we've got a lower oil price. We've got lower gas prices. We've got more jobs and yet retail sales are slipping back. So there's something not quite right in the US economy and I'm not sure what it is. And that makes me worry about the fact that people are talking about a Fed rate hike in June. There's another factor. If everyone else is cutting rates, why would the Fed raise rates, make the dollar even less competitive than it already is? You know, it would strike me as a little bit strange. The fact that the Fed seems to think that the deflation forces that are affecting China, that are affecting Japan, that are affecting Europe and also affecting the UK. Inflation expectations here in the UK are at their lowest levels for quite some time. So, you know, when you consider all of that, I just can't help worrying that the market is two-one-way on the dollar. That being said, you can't go against the herd and I think that's really the big question going forward. You've really got to go with the trend until such time, but you've got to be nimble and you've got to be ready to get out as soon as possible. Now, the key levels on cable is 151.30. I quickly want to show you that because there's a good support level there, but it also targets our head and shoulders breakout target that we saw in my video earlier this week. So, let's get ready to rumble here. The numbers should be coming out sometime in the next few minutes. So, we've got, I don't know, they could be late. We just need to remember they could be late because of the data, so they're due. We're waiting. Is it going to be a negative dollar number or a positive dollar number? At the moment, my Bloomberg's not updating. Neither is our platform and that's because, sorry, the BLS website is temporarily unavailable. That's useful because everyone's trying to hit it at the same time. So, we're still waiting. Still nothing on my Bloomberg and still nothing on my platform. So, we're not getting the data because it actually hasn't been released to Bloomberg yet. And I'll just keep talking about it. The trade balance is out. The trade figures are out. A deficit of $41.8 billion. That's pretty much in line with expectations. We're expecting a deficit of $41.1. So, that's slightly worse than expected, but that's not really the number that we want to hear. Is it? It's the payroll's numbers and we are still waiting for them from Bloomberg. They still haven't been released. While we're waiting, the Canadian trade balance is also at this morning, negative 2.4 billion deficit versus street had been expecting $1 billion deficit. So, it is a little bit worse than the street expected. We're still waiting for Bloomberg as you can see here. Right, February payrolls. I've just seen someone tweet it. It's $295. I don't know whether that's true or not. I'm hearing $295. Yeah, there it is. $295. Yeah, it's just come out. So, we've got $295. $239 revision lower. So, I was way wrong by $100,000 on that. It doesn't look like the oil sector has affected it in any way, shape or form. $5.5, the unemployment rate has come down slightly. Let's look at the participation rate to see whether or not that's reflected in the participation rate. I'm still waiting for the average earnings numbers because it's the average earnings numbers that we're particularly interested in at this point in time. I'm still waiting for them. $5.5 still. So, Euro dollars going to carry on towards $108 at this rate unless we get a disappointing average earnings number. So, certainly the key support on the cable is, as I said earlier, it's $151.30. Still waiting for the average earnings numbers. That's dropped to 2%. That's dropped back to 2%. So, actually, that is worse than expected. So, on a monthly basis, we've seen 0.1. So, actually, average early earnings have slipped back. I'm going to pull a Bloomberg off. Let's look at the key support levels and resistance levels on the various markets. So, we've got the pound against the dollar around $151.30. The trend line from the lows that we saw earlier this month is going to act as a fairly key support level down here as well as our head and shoulders breakout target from here around about $151.30. So, key support there on the cable, looking at Euro dollar, we've got just below $109 at the moment. Let's blow that out slightly further and see whether or not we can find the next support level on that. And it's probably going to be around these twin lows that we saw in 2003. Let me see if I can attach that to that. $107.94, those twin lows there. So, you've got to think that the market is going to want to have a crack at that over the course of the next few trading sessions. We're pretty much there at the moment, but we need to stay below $110, $111 to do that. And obviously, this is the monthly performance on Euro dollar. And this is an absolutely historic move lower on Euro dollar on this particular timeframe. And we do appear to have broken out. And that looks like a little flag there. So, certainly, there's potential for us to move an awful lot lower on Euro dollar. Dolly Yen is probably going to have a crack at that $120.60 level that's capped the rally that we saw a few weeks ago. So, again, keep an eye on that. And then we've got $120.80, which was the December highs, as well as the $120.85 highs that we saw at the beginning of December as well. So, we're approaching some very key levels on Dolly Yen on the top side. Have we got the momentum to take that higher? Those average earnings numbers would suggest to me that the Fed's not going to be any hurry to drop that patience language at its March meeting, which I think is due in a couple of weeks' time. Yes, it is. I think it's the 17th or 18th. You know, it's the 18th. Yes, so, you know, for me, given what Mr. Dudley, no, Mr. Evans, Charles Evans said earlier this week, he is one of the most dovish voting members of the FOMC. He's suggesting that rate rises won't – he doesn't want rate rise to happen this year, the earliest 2016. Now, he is probably one of the more dovish members of the committee. But the fact is, unless we get some significant wage growth, then I would argue that irrespective of these numbers here, it's going to make it very difficult for the Fed to actually look to raise rates. And yes, the unemployment rate did drop to 5.5%, but the participation rate dropped to 62.8%. So I wouldn't worry too much about the participation rate in that respect because it's generally reflected in the drop in the unemployment numbers because the unemployment numbers only look at people who've been actually looking for work less than a year. I think that's right, isn't it Colin? I think so. Yeah. And actually, if you look at the U6 unemployment rate, that actually doesn't paint as pretty – as positive a story. I think someone's just tweeted something along the lines of the U6 under-employment rate rose to 13.1% from 12%. That's the under-employment rate. So again, while the headline rate may look particularly good, the under-employment rate would seem to suggest that it's going to be very, very difficult for the Fed to even consider tightening policy if you've got a very, very low participation rate. So, right. So let's look at some of the other key levels. You wanted to talk about dollar CAD, didn't you Colin? Yes, let's take a look at that. So we had dollar CAD has been forming a big descending triangle here. It is going back up a little bit, but it's still been contained within the resistance line of that triangle. And so you've got two things weighing on pushing that up to that. One is the U.S. dollar rally. The other is the worst unexpected Canadian trade deficit. I talked about a couple of minutes ago. But basically, the other piece this week, though, was that the Bank of Canada did not raise interest rates and people thought they were. So overall, the Looney here is still looking top. It still looks like this is a top forming here based forming in CAD U.S. dollar. Cool. Okay. So basically, we're looking at $123.50 on the downside. We're looking around $126. Give or take. Yeah, about $126 on the top side. So certainly we're not too far away from the $126 level. And given how positive those dollar numbers are, the move higher in dollar Canada is not what I would suggest particularly stellar. Obviously that's very negative for gold. So that's those numbers. And we've broken below that trend line that I drew in from the lows in October, which is another negative in terms of the overall direction of travel with respect to gold. And the likelihood is that we could well retest the lows that we saw at the beginning of this year or the end of last year around the power. Sorry, Michael. Gold was going back and forth in the earlier part of this week. It tried to break out then it tried to break down and it was a bit of indecision there. But now it looks like this has definitely been decided to the downside here with this breakdown. And you look at the stochastics and the momentum is trending lower. So it does look like your gold has resolved this dispute here with the bears taking hold of it. That looks fairly conclusive, that break. So I think there's certainly potential for us to move to that next support level that we drew in from the lows at the beginning of January, the end of December there. That spike low there. So certainly worth keeping an eye on that over the course of the next few sessions. Crude oil. Let's look at WTI. They're continuing to diverge. Brent crude. This is a range play for me at the moment. Certainly you can see it being played out on the four hour chart here. Given how far we've declined there's certainly significant resistance around about $62 a barrel on the Brent contract. There's good support around about $56. You can certainly draw a trend line on this chart here around about $59.50 on that move there. A bit of a continuation pattern perhaps of this up move here. So maybe there's potential for Brent crude to break higher over the course of the next few trading sessions. WTI is fairly similar, albeit at lower levels again. It's a similar sort of box range that we've been in since the beginning of February with once again $54 on the top side $47 on the downside but we are trading in a nice up channel there actually. Let's draw that in to give you an indication of where the boundaries are. I'll just draw that there. It's holding at the moment but certainly if you look at that, that's quite steep. If it does break then I would imagine it will probably test these twin lows around about $49 a barrel. That is quite a steep uptrend. The key question is whether or not it's sustainable at the moment but as I say, we've had a very strong number but I would caveat the strong number with those concerns that I have about the participation rate dropping, the under employment rate going up, the U6 under employment rate going up and obviously the decline or the slightly worth and expected average earnings numbers given the fact that core inflation still remains well below 2%. I think that's really what you've got to look forward, look ahead to. While we may get the dollar look test higher today in the interim, there still remain significant doubts about whether the Fed will be able to consider easing monetary policy in June. Being asked about silver, more than happy to talk about silver, I'll just reiterate what I was saying earlier about asking questions. David, you need to use the chat facility. I would just say ask questions here so that you know where to ask questions. Dolly N. will rally on a strong dollar number. I've just been asked about that but we need to break out through 12080 to target 12085. If we get a break through 12085 then certainly I think we can retest the highs. Certainly that's the direction of travel. The dollar will remain strong and we'll certainly want to test higher today because that's where the momentum trade is. But next week we may find that some of those gains get given up. As regards to silver, it's pretty much a proxy for gold so what you'll get is I think a retest of these series of lows in December. Let me draw that in for you. Around about 1553. Now that we've broken below the February lows that's going to kick out a few stops and we'll probably test down towards these lows here. On the back of that, with respect to the S&P 500 what I was saying previously still holds true. Strong dollar is bad for it so while the euro is going lower and continues to test lower you'll probably see European stocks go higher but the Dow Jones will struggle to rally. For me these numbers have a dual purpose. They're positive for the DAX and European equities so they're not so good for the Dow and the S&P. We're looking at the Dow and the S&P both pretty much flat. The S&P is still sitting almost right on 2100 and the Dow at 18125. It's been trading in an 18,000 even to about 18300 range so it's just kind of sitting sloppy in the middle of that. The US indices look like they're not really doing much. In terms of the upside despite the rally in Europe? With respect to the DAX there's certainly potential to go quite a bit higher. There's nothing to stop it while the euro drops or continues to fall. If you see euro dollar at 108 the next target is 105. The lower the euro goes the more positive that is for European equity markets so there's no reason to think we can't see 12,000. Over the next two or three months how we get there is another matter but I wouldn't want to see a move back below 11,500 on the German DAX in the short to medium term because if we do we could get a sharp correction lower. Certainly I think what's happening with respect to Greece is going to be a factor going forward with respect to European equities. There is a euro group meeting on Monday. I know that they're going to be talking about these proposals that Mr Sipras has put towards the EU commission and they will be talking about them and any concerns about Greece leaving the euro zone will help push European markets or keep a cap on European markets but what I don't think it will do is will undermine the upward momentum that we've been seeing over the course of the last few weeks and months. So going forward I would expect to lower euro to continue to underpin European equity markets while at the same time actually hindering US markets. So it was interesting to note that before those jobs numbers came out the S&P was trading at 2101 is now at 2095. So that tells me all I need to know about the direction of travel for US equities. A strong dollar is not something that US equities are going to like. We've seen a great run on US equity markets. The key support level as I said just before the numbers came out is around 2084. We tested that a couple of days ago. I've seen a reason why we can't test that again while we're below 2100, 2105. Why that number? Because essentially it's the highs of the last couple of days. 2104 today and 2105 yesterday. So beware of a short squeeze on the S&P. The market likes to do that as we head into the weekend. But overall I think what we will determine where the S&P goes next is how it reacts around 2084 if it gets there. So as far as today is concerned it's a negative US equity market picture but it's fairly positive from a European equity market point of view. A nice bit of divergence there and I think we're going to continue to see that over the course of the next few sessions. It's also going to be very interesting to see actually how the US bond market has actually reacted to those numbers. I'm just going to have a quick look at the US 10 year which is down here. We've seen a quick, we've seen a sharp move in the prices which is not surprising. Below the trend line support that we saw in September and we've seen a five basis point jump in yields from 211% to 216%. So certainly that explains why the dollar is so strong today because of the fact that US Treasury yields have jumped quite sharply in expectation of some form of rate hike by the Fed sometime this year. But as I say, the headline numbers are good. The internals probably not so good but the internals will start to play out next week. Okay, does anyone else have any more questions? I've asked about the DAX. Are you okay with my comments on the DAX ladies and gents? With respect to that, weak euro should be fairly positive for the DAX. Strong dollar, not particularly great for the S&P 500. If that's pretty much it, brilliant. Okay, we are recording this so at any time you want to basically go back and re-listen to any of the comments, please feel free to do so. Next week, Colin and I will be hosting another event. I think it's next week. Is it next week, Colin? It's next week, that's because I'm off next week. That's right, you're off next week, that's right. Okay, so in a couple of weeks time, Wednesday actually, UK Budget Day, you and I will be hosting, co-hosting an event, basically covering some of that and talking about what to expect from the pound and the UK Guild Market and the FTSE 100 over the next few weeks and months and the lead up to the election. Until then, unless anyone else has any other questions, I'd like to thank you all for listening. Sorry about the delayed nature of the economic data, but unfortunately that was down to factors outside of our control. I hope you enjoyed this monthly webinar and hopefully you'll attend next month at around about the same time. Actually, are we actually in next month? Because I know it's Easter, isn't it? The US is on the second, I believe, or whatever day that is. The first Friday is before Easter. We'll sort out the dates with respect to that at the time, but otherwise, thanks very much everyone and look forward to speaking to you at our next event. Thanks everyone, have a great day trading.