 Okay, very good morning to everyone Monday the 4th of May. I hope you had a great weekend and Quick quick shout out to Jennifer and Tobias in Sweden. Thank you for watching. I got your message over the weekend and Enjoy your breakfast, but Quick thing then to look at before we begin the overall assessment of the charts and a general look ahead for the week This is the calendar from the macro menu Again always a super important process for our traders and the way definitely that I kind of plan ahead for the week is I put together or construct this calendar and Obviously for anyone who does trade there's lots of different calendars that you can see but mainly comprised of just economic data I think one of the important things that I try to do is aggregate across several different calendars So not just trying to pick out the kind of main economic data points, but also in terms of any speakers So for example on Tuesday, you've got fence Bostick Bullard Evans George ECB's merge So trying to look at central banks media kind of calendars also put on geopolitical calendars You've got things like the UK and US trade talks happening on Tuesday For example things like that that won't generally appear on your normal standard forex calendar So hopefully that's useful I'm going to drop a link to the whole report that I write every Sunday called the macro menu in the video So if you need to read that in your own time, please do but we'll we'll circumvent background through this session To look at some of the highlights, but first of all, let's just have a look at the charts And what have we got going on today? So a little bit of risk-off tone Seemingly a little bit of a pickup in the political sparring between the US and China That's really dominating the news flow this morning And I'm going to give you an example of what's being said and my thoughts on that But as I said a little bit of risk-off so slight gap down seen here in US futures So I'm just going to flip this over to the DAX for a second So the DAX is down about 335 points But if you're looking at the US indices, particularly the NASDAQ already technically You've got that low that we printed on Friday just coming up to a touch on the late Asia Pacific session And we're coming back up to that point now and as Europe come into the market Pretty similar setup so for the other US indices And of course comes after a down day was seen to kick off the month of May So obviously a lot of people banding around the statistics about the seasonality of that Kind of sell and may go away a little bit early I'd say to start thinking like that But certainly to kick off proceedings this week You can see then that equities lower, gold and T-notes both up $8, 8 ticks respectively Or be it off their highest points Oil also as well Just breaking that trend line that I was keeping an eye on from last week Obviously last week was the first week in four where we've had a positive move higher And boy was it a positive move It was a huge gain in the front month June futures contracts You know basically doubling in value in that respect So we've broken that we've come back down and technically then we're just trading back around Levels which were the low on that trend line test Failed break initially before the push-up seen on 30th and then corresponding with those high seen on 23rd 27th So quite an interesting level here already holding in the overnight Asia Pacific session We're trading just about 30 cents or so above that at the moment, which is broadly the $18 handle So worth keeping an eye on that as well Over supplied fears coming to the forefront again. There's been a latest Bloomberg survey Which we'll take a look at but basically looking at the fact that in April a lot of the Kind of competing for market share meant that production values were particularly high So in the currency space then with the the kind of moderate risk-off tone Dollar's a little firmer the Dixie is trading about a one-third of a percent So it is pressurizing both major currency pairs Euro-dollar and cable both off around circa 45 pips or so at the moment All right, well, let's get into some of the stories Before I do just remember to like and subscribe to the channel Be very much appreciated many more updates coming of course like this every morning And I've also got a couple of plans for some other kind of trader interviews and things to come So don't forget to subscribe to the channel But looking at the new stories then for this morning And this is kind of the main headline reading and don't forget Japan if you are kind of looking at the overnight Volumes Japan is out of the market pretty much for the entirety of the first half of the week They don't return until Thursday and China was also out overnight. So things a little thin as well But this is what we're looking at and it's kind of continuation on from last week Trump promises conclusive US report on viruses China origins Now a couple different things here Trump administration according to Reuters is basically turbo charging an initiative To remove global Industrial supply chains from China as it weighs new tariffs to punish China and Beijing for its handling of the coronavirus outbreak according to officials familiar with the US planning now interestingly The president or two points one the president declines to criticize G This has been quite a common thing that we've seen Trump very willing to criticize China But he hardly ever if ever at all has criticized Xi and obviously Xi is at the very top of this This kind of power structure in China, and I think that's quite a telling sign personally I actually think that you know the Chinese culture criticism gets taken You know very seriously, and if it was to the absolute, you know kind of the top guy in China I just think that that's just not going to fly and that's where actually you get a lot of The real repercussions of how China might react But as long as she is not the target and it's broader China as strange as that sounds I think then that this this fits that narrative that what Trump is doing is purely political at this point And I think although he's playing Fairly precarious game, which if miscalculated could go very badly I actually think that that is a telling sign that the fact that he's kind of exempting Xi from the criticism Even though we know Xi is the leader of that country So the two you would think would be associated, but you'd very very rarely hear Trump calling out Xi Specifically the other thing is as well the administration So Pompeo obviously just backing up Trump talking about enormous evidence You know this was a talking point the end of last week, but there hasn't been really any evidence force coming as yet So for me, why is all this happening? Well, I think a lot of this is happening because of this From a timings point of view. This is looking at the change in payrolls and the US unemployment rate And of course this data is due this Friday This Friday will get the latest of what will be the first real Insight into the tangible impact for the mass layoffs that have been seen in America Due to this capturing then that main point of the lockdown that's been seen nationwide So the expectation is for the headline change in on farm payrolls to be minus 21 million the range is minus 28 million to a best-case estimate of minus two and a half million the unemployment rate as you can see at the bottom is expected to Surge up to fourteen percent is the median estimate with a range of five point one To twenty one percent So how much is this going to impact markets? I actually think very little Because it's been very well telegraphs been talked about a lot. I think a lot of this was the The cause of that big volatility seen in markets in March. Remember markets are forward-looking in this respect So I don't think the data in itself is going to be a massive thing for markets to digest, but I think this Underlines why Trump is doing what he's doing. I was talking about this in the macro menu I've been tweeting about this this morning for me. This is pure tactical Diversion tactics from Trump. He knows that this is going to be Absolutely broadcasted around the world in global media as the worst situation since the Great Depression and That's bad for him in a political year Particularly in the run-up to the election. So what does he do? He tries to use? Diversion and deflection tactics. It's not my fault. It's the Chinese virus fault And therefore you get a lot of finger pointing in order for him then To come out of it with a narrative in that sense. So what else does he mean saying? Well, he's actually come out as well the president and He has said on Sunday. He now believes as many as a hundred thousand Americans could die in the coronavirus pandemic Now this is after he previously said a week ago that his estimate was 60 to 70,000 So, you know huge revision upward as well and this comes with Already his previous target being topped as the death toll in America now is coming up to 70,000 already At this point in time. So again, I think for for Trump. It's about Setting the net the scene that you're gonna have a shockingly bad economic situation Reflected in these numbers albeit from a market trading perspective. It won't be that much But politically potentially very damaging And then you overlay that with a much more higher death toll than he had previously said So cue the anti-China rhetoric in order to try and cause a distraction For the general public. So, yeah, all of this at the moment I think is is the the political machine on Capitol Hill in full flow What else is going on while Trump has said that? Basically they need to pass a further stimulus that must include a payroll tax cut But the only problem there is obviously that's all well and good for people who are employed But what about the 21 million people who no longer have a job? They're not going to benefit from a payroll tax cut and hence the reason why It's been difficult for him to push this one through but again, this is another thing that I would be expecting to Compliment the the anti-China rhetoric would be more pledges of fiscal stimulus from administration again All of this is to appease and manage the general Public sentiment over the handling of this situation So that's kind of the the Trump situation. So obviously that's no fear of kind of retiring of a tit for tat and more tariff Tariffs coming on board and already obviously a challenging economic situation under the pandemic has made people a little bit nervous to get the month underway But as I said, how much of this is true and how much of it are idle threats? I'd say for me, it's more the latter at this point in time But certainly warrants monitoring the situation very closely The other thing as well that's kind of reared its head North Korea's fired shots at South Korean guard post in the D Miratorized zone or the DMZ the buffer separating the two countries on the weekend. I don't think that's a Big deal, but obviously more confrontation on that front Is it's just generally not good for sentiment overall Let's have a look at a few other headlines oil as I mentioned it has gapped down a little bit And we're down about a dollar and a half at the moment in price Oil drops of optimism over demand waning and the face of a huge glut And what they're talking about here is this OPEC production jump by the most in 30 years last month So let me just scroll down. Here's the Bloomberg graphic So production saw by the most in three decades last month as you can see here. So really interesting. Yeah as the world was Um, kind of at the beginning of the year under a bit of pressure with the ongoing trade war Then obviously this this pandemic started kicking in Well, we already saw Chinese consumption diminishing through february when they were on lockdown Shortly after the Chinese lunar new year Then the pandemic began and then come to the global spread of the virus And that meant that obviously there's been a huge blow to demand Irrespective of that though given the adjustments from these oil producing nations tend to be slightly lagged Then they were pumping, you know an enormous amount So you've had almost this overnight global collapse in demand And yet that's why the adjustment and why prices have been so volatile and in a negative way for crude oil prices Because of these fears of this overall glut So even though there's been a few tentative signs and that was helping support prices in wti last week about a bottoming out in regards to the oil consumption situation this Has brought about new Concerns and obviously gets overlaid with any increase in us-china tensions, which is going to be another kind of potential Situation which could could weigh on overall economic performance if that was going to Unfold in a worst-case scenario way and that would obviously impede demand again in that respect So yeah a couple things to watch out for I think the the idea or the threat then of This kind of negative pricing and oil to the degree of which we saw those massive fluctuations just a few weeks ago I think the the probability of that is way lower now Discussed as many times before this kind of spreading of in particular the the united states oil funds exposure Across the the kind of the futures calendar now It's going to help offset that but but certainly given the The size of the rally last week a little bit of a pullback lower I don't think would be the most surprising thing if that were to be the case and certainly a little bit of that unfolding this morning A quick look elsewhere. I'm just going to have a quick look at the earnings situation And we we are still in the midst of of earning season in the u.s There are 148 companies reporting two of the dowl 30 One thing I would say is although there's quite a populated screen here or a table of the most anticipated earnings If you're a macro trader well most of the biggest largest cap or industry titans They've already reported obviously last week was particularly key for that for the technology names amazon apor microsoft facebook and so on This week They're much smaller. It's kind of more mid cap names But certainly quite a few coming out. So from an index moving potential Perhaps going to be superseded by some of these other bigger broader macro themes on the virus on the us china tensions Particularly if trump does indeed start to ramp things even further On that rhetoric ahead of the anticipated Negative payrolls that we're going to see on friday and from a european side of things It is worth noting if I just quickly scroll down There are a couple of european large cap names though to be aware of I've wrote a calendar here on the macro menu. So tuesday quite a french focus from the cat corant. You get a total bmp paraba wednesday nw the automotive maker credit agricultural soc gen thursday at uslim et al and friday one of the dax giant seamen's reports as well So worth just noting that onto your calendars The other new stories at the weekend that were quite dominant certainly if you're if you're based in the uk was this idea about How as the uk government going to start relaxing? What's the roadmap to the relaxation of the The lockdown measures that have been in place for the last couple of weeks now. The reason why this has been quite a dominant news article over the weekend is because on the 7th So this thursday we're going to hear from the uk government about their their update So what does the relaxation of these rules look like? and some of the things that we were seeing were Staggering of shifts amongst proposed new guidelines avoiding hot desking Avoiding face-to-face meetings two meter distancing enforced by floor tape Social distancing quantities of sunday times will mean that it would leave commuter trains with only 15 percent of their Usual capacity until more Relaxed rules come into place. So The the reality kind of coming home here that is going to be certainly for white-collared workers Probably several months before we get anywhere near Normal working practices and I would probably say that's not going to probably happen until the new year at this rate from uh, I mean that's fine from a political point of view from a from a Government side of things while two sides to look at really One is the government in the uk has a has a five point plan. So trying to anticipate When what and how long These loosening measures start to kick in I think you could use this as a reference point Or be it I would say that the uk government themselves has changed their five point plan wording Quite a few times over the recent weeks. So it does tend to change Hence the fluidity of the situation. So what the government are saying about the What's going to happen in three weeks time? I would take with a degree of a pinch of salt because At the end of the day, you know, we are dealing with a situation where the virus in itself will be volatile in nature And as such then we're still learning at this point and therefore subject to Probably changing tactic as we go forward in time. But from from a starting point I think this is what you've got to look at then from a market's perception Because that's what you guys will be more focused on The main things I'm looking at are really a three point plan Which is the the shape and severity of a second wave upon reopening And of course, then I'll be looking at the five point plan to determine Then about the timing around this point one And then point two the implementation of large-scale testing to better monitor and control any secondary Breakouts, you know, if they can't do testing on mass, then there's no way that they're gonna anytime soon Be relaxing in multiple steps in a fast way Then three where the governments can continue to support the economy over the long term if As is becoming quite apparent now in in much of the Different countries in mainland europe and in the uk. This is going to be a long drawn out route back to Normal behavior for the public and and the way of which people work. And so therefore The economic rebound is going to be gradual And that means then that governments more than likely will need to continue to offer more support The question mark have come is, you know, their capacity to do so and their political appetite to continue to offer more assistance as well Given the fact that governments obviously loading up more and more debt and ultimately these governments Typically in a western democracy tend to be quite short term focused because they need maximum pay off for the now Whether or not they can continue to to do that Which i'll see of course, I mean in in italy if you read the press this morning their Conteers getting quite a lot of backlash about his plans for the relaxing of rules, particularly in regards to small businesses And again the summer is approaching whether the temperatures are going to start to pick up People are probably going to get in terms of the public A higher probability of them flouting the rules So it's going to be interested to see how the governments can handle this going forward And obviously this thursday we can get the latest update from the uk We're also going to get from the uk the bank of england rate decision That is coming out as well on thursday do be aware they released a press statement Last week saying that they're going to release their interest rate decision at 7 a.m Normally, it would be at midday now the reason why they're doing this and what i've read at the weekend is to accommodate the publication Of the interim financial stability report They're basically want to release the same thing or the same two reports at the same time So you get the rate decision you get the financial stability report And you also get the quarterly money monetary policy report or otherwise known as the inflation report from years gone by Then andrew bailey the now governor of the bank of england He's basically going to brief reporters after decision and the contents of those discussions will then be made public at 10 a.m So it's a little bit of a different format actually than what you're probably used to so do be aware of that if you're going to be trading things Up the pound You're going to be seeing that statement come out at 7 and then more comments a bit later on from the governor Now how much of that or how much can we expect from the bank of england? I would say not not a great deal I wouldn't expect them to start Adjusting their quantitative easing program for example I'd be expecting them to do something in a similar ilk to what we had from the fed and the ecb Which is kind of talking about the prospects of potentially doing more in the accompanying meetings I in the summer at that point they're going to be armed with a lot more information about how then The economy is responding to the pandemic Given that it's going to represent then the biggest economic part of the downturn Throughout that month of april and then how is the unwinding going as we're going forward in time? so I think it's very much a Setting the scene meeting For future action if it's deemed necessary situation And i'm sure that they'll be continuing to do like what christine lagarde was asking Which is that governments need to continue to provide as much fiscal support to complement the monetary actions that have been taken already So that's pretty much it. I mean the calendar fall today These were all final readings in terms of the pmi's that have been coming out later on this morning You've then got an update on the The kind of pandemic purchasing of bonds from the ecb later on this afternoon then us factory orders It's kind of the main data point expected to show again Downward figure in reflection to the fact that this is encapsulating much of the The month of march from the us so again if you go on to Either one of my twitter account I tweet it on a sunday or i'll put the the link into the video Here's the full macro menu. So I talk about the uk a bit more detail about some of the things i've just discussed The bank of england talk about payrolls earning season And there's the full calendar for everything you need to be aware of for for this week But hopefully that's enough to just get you started make you aware of the fundamentals for the week I would say overall some of the main things that i'm looking at or the main thing i'm looking at is How far does trump push the envelope with this whole china In us situation. I think he is going to push it further And I think this is all a political attempt to try and and distract and move away from any Accountability being put on his doorstep So that does provide a bit of a near-term risk for markets particularly just given What a rise that we had through last month in the equity space does leave equities generally a little bit susceptible to pull backs Like we've been seeing Over the last two sessions or so, but having a look here For this morning just finally on the charts I'm just keeping an eye the nasdaq has broken now above that Technical key point which was that previous low And the high of the age of pacific session so a little bit of a further follow through and you can see the the relevance of that level going back as well to The 28th So a little bit of an extension of those gains The s&p just testing that same level and the dow just coming up to it at the moment So all in all a little bit negative overnight perhaps slightly faded back As europe have come in the trump china thing needs to be watched How much of it though from what i'm saying is actually a real tangible threat to markets? Perhaps a lesser extent because I think people see through the veil that is trumps political posturing to some degree All right guys, that's it. I'm going to wish you a good week ahead any questions. Let me know And have a good session ahead. Thanks