 Okay, very good morning to everyone. It is Wednesday 28th of August. I hope you are doing well Going to have a look at a few different things this morning an update on what the general media take is on the latest kind of flip-flop from Trump on the status of the Chinese US trade talks and how that's being perceived also a very interesting open editorial piece from the former Fed member William Dudley and the implications of what I think that could have for market sentiment And then a few other bank calls UBS and JP Morgan our latest research notes They issued yesterday and what their outlooks are for US stocks And then wanted to have a brief talk about something which I was questioned and questioned on By one of the guys here yesterday was which is German state elections which are happening this weekend Which might see the far right taking the helm? And is there any type of reaction that I'd be expecting them for the markets on the reopening on Monday? So that's what I'm gonna address first off though a quick touch upon the general market sentiment this morning and things are Relatively quiet. We've had a slight downturn here in the DAX But looks more to me technically led you can see here on the center left chart a technical breach of the pivot level Which was holding the overnight Asia Pacific fairly tight range, and we've just seen a bit of downside come in Likewise in the US futures and NASDAQ also pushing through its respective pivot But otherwise pretty quiet the US 10 year is basically flat up marginally a bit of support again around its daily pivot about two ticks gold Not a little bit of movement overnight But recovered the initial dip that was seen in the first phase of the actual Asia Pacific session Again hugging its pivot level so overall fairly quiet the dollar index is basically flat and the major currency pairs Largely reflecting that type of price movement as well So I'll let Sam go into the charts in more detail probably the one Standout chart if there is in regard to price reaction is that of WTI crude not sure if you guys Saw that last night, but you had of course the API infantry's and we did see a sizeable drawdown and that caused a breach of the previous Well weekly high that was printed on Monday and a snap through that in the failure liquid conditions overnight did see a Push higher in the price and oil trades up about 64 cents this morning All right run through of the major headlines and really I don't want to spend too much time on this because it's very much in fitting of what we were talking about in a briefing yesterday, which is the point of this kind of Almost apparent loss of control that Trump had on Friday when he appeared particularly frustrated by the Jackson Hole speech when Jerome Powell He then lashed out at China Then 24 hours at the G7 in Barrett's started talking about how they're very close to the deal and how they had a phone call Which China said didn't even happen and this is leading to to I think again Just to re-emphasize a very important shift in the dynamic of the trade Negotiation and in general terms what I mean is that a lot of the power now is Transitioning out of Trump's hands and over to the Chinese of which I think is the first time really that this is happening since the entire process has begun and One of the main things here is that China and this had been a growing kind of feeling domestically in China if you read a lot of What analysts have been saying as well as their general state media is that Trump's tactics have further deepened The distrust IE how can you go into negotiation with a guy that changes his mind like the change of wind? and with that feeling then China now have kind of kind of Battle down the hatches if you like and said well, we just need to prepare them for this trade water materially worsen and That's just a matter of fact, but that then is kind of almost calling the bluff of Trump And so this is the kind of situation that the president has kind of landed himself in by being so Uncommitted to a consistent message what this has led to Remember yesterday. We were looking at the percentage fluctuation on the daily from the s&p 500 and the last period of about two weeks That we've gone through has seen the biggest More than one percent swings in the s&p than we've seen in the last 12 18 months that then largely reflective This is effectively the same Narrative that the chart is showing you this is the Chicago board options Exchange volatility index otherwise known as the VIX and so people often look at this as a barometer for general Markets sensitivity and often more of a negative way 20 often seen as the kind of Symbolic threshold of when above that level it tends to be a signal of market stress or panic and can translate into kind of Negative trade certainly helps fuel the further inversion of the two tens yield curve As which we continue to see at the moment and you can see these flash points that we have of when it spikes And then dramatically comes back as the messaging changes to and to and throw The other very important part though, and it's very much an extension of this situation is there was an open Editorial article written by a chap called Bill Dudley now Bill Dudley for those not familiar Was the former head of the New York Fed and the vice chair of the Federal Reserve. He is no longer Part of the Fed. However, he was a very High-ranking figure of seniority within Fed and its decision-making process particularly anyone tied with the New York Fed has that kind of that significance in the value of their position and He wrote yesterday basically highly criticizing the president and Talking about this idea that President Trump's trade war in China keeps undermining the confidence of businesses and Consumers and is worsening the economic outlook and basically suggesting that the Fed should definitely take this into consideration Of what their decision-making would mean in terms of the prospects of him securing second term And so it was highly critical of Trump and his intervention being so explicit We're trying to force the Fed to do certain things now the Fed themselves have come out to try and Deescalate this situation and said look we're not here to get involved in politics. We are independent of that decision-making process But nonetheless reading between the lines You've got to feel that this is you know someone like Dudley to come out like this given the timing of what happened at the end Of last week and given I've counted the tweets in one week Trump has made 11 tweets criticizing Directly the Fed and Jerome Powell and so a little bit of defense tactics perhaps but Ultimately, I feel what this means is that if China now are willing to not play ball and as to other Fed Well, Trump's got a massive problem on his hands because then all of a sudden that adverse feedback loop that we were talking about last week Which definitely plays into a win-win scenario for Trump that starts to dissipate and no longer continues And now he's got to start towing the line basically actually making concrete progress Without being so aggressive, but remember if he dials down too much the rhetoric and it's aggression Well, then that's not gonna sit well with his electorate base Going into a campaign year and hence comes the the rock-and-the-hard-play situation for Donald Trump So now if he cannot rescue or wrestle back control away from what's has happened Over the literally the period of the last couple of days, so I do think it's quite pivotal change here interestingly China overnight have said Well are seen now by the majority of analysts and economists of cutting key rates From September but moves likely to be to be gradual in fashion And so again another step from China looking to manage the process of now Weakening of their currency in an orderly and controlled fashion, which is hugely important For them to have more flexibility and maneuver to now counteract This latest Trump episode without the fear of then mass exodus of capital outflows So cutting rates tax cuts fiscal spending, you know All of that's to come from China given the fact that their rhetoric now is that they're willing to prepare that things are Gonna get a lot worse and that is worrying for for Donald Trump So yeah, I mean that's it's pretty much a continuation of yesterday I mean does this translate into anything immediate for now? No, but I definitely think you know this trade war Is not going anywhere and definitely it's gonna remain a key driving topic over the next 12 18 months particularly It's so key and instrumental to the likelihood or not of Trump securing his second term that this I think we'll look back at this weekend at the G7 in France as one of the pivotal moments of where this whole Negotiation shifts We'll see in time other things that I wanted to quickly run through Equity markets, you know, although we've had this incredible bout of volatility. I was looking at the S&P just talking about more broader global macro issues To a group of interns actually yesterday, and I was looking at the S&P And I was thinking now with all this drama that's unfolding. Where are we at the moment and actually? You know, we're still just a couple of percent of all-time highs So as much as it feels like, you know, the end is nigh and the inversion of the yield curve and so on You know the idea of the fact that it's panic stations just yet. I think is is incorrect and One of the things that was interesting last night was I was reading a couple of bank research reports And here's one out of JP Morgan and They were suggesting that the time to buy equities is fastly approaching and they were sent essentially suggesting that actually come September it's going to be the commencement of an upward trend now supporting that reasoning They were looking at the fact that the ECB is very much likely to restart its QE program remember timings wise we are anticipating ECB will cut its deposit rate by 10 basis points next month and Ultimately the likelihood has grown that they will continue or restart their QE program and announce that in time Towards the year end They were also talking about potential for a deeper fed rate cut as much as I kind of disagree with that at the moment again It's a potentiality signs activity may have bottomed So looking at economic data and understanding the fact that well I'm perhaps now we've hit this trough and the worst economic data point readings And now it's time for a little bit of a rebound perhaps and then improving technical indicators So of course you have to understand that these are sell side institutions They have you know generally aligned that they're trying to Push onto their client base and let's not forget the head of quant trading from JPM said only a couple weeks ago talking about the idea of a August end of August rally on a portfolio Rotation out of the fact that they're underweight stocks and need to build up a position again. It hasn't happened really yet Still got a couple days yet for his call to come true, but definitely JPM Super bullish, but what was interesting. I thought of what definitely makes a market UBS wealth management came out last night and they said they've gone underweight equities the first time since the euro area crisis They're cutting their stock positioning relative to high-grade bonds to reduce exposure to trade war and political Uncertainty so UBS taking the opposite opinion And they're looking to this would be a classic move into safer assets particularly not looking to pick up speculative or junk yielding high yielding bonds Like some of the southern European states for example or more Emerging market status where you can get a higher return but associated higher risk. They're talking about high-grade bonds So higher sovereign credit worthiness looking for a store of value over time with consistent returns for that investment So rotating out of more riskier investments like equities So for them, they're looking at the opposite opinion now One thing I would say is that for me that the fact that this is wealth management division I can understand this from a longer time horizon for the Preservation of looking to mitigate risk to have just a return on investment or capital Over time I would say not to think that these are complete contrasting calls I would say these are different investment durations. This is more medium long-term I would say is this an astute play for the savvy investor This is more relevant for the trader from JP Morgan's point of view because this is looking more in the short-term Reasoning about the next couple of weeks whereas this is talking about the next I would say six to twelve months So yeah, but just quite interested to see how these different You know one of the main things in my role that I always do is I always want to know What other big players in the market are thinking now does that mean that I pin my flag to whatever UBS or JPM saying absolutely not But what I do do is I read not just what these two banks say But what all banks say and that's how I form my opinion about general herd Mentality of whereabouts the market is in its consensus view for what is happening at the moment As a base case scenario very important if you should try to Accertain how markets are going to react by going through that process All right, the final thing now. I just want to mention Before I hand you over to Sam is this is a map of Germany, of course And as you can see these are divided into the different states of Germany of which you're probably familiar with But two of which have come into stark focus in the last couple of days and will do as we go into the weekend is that the anti-immigration and the anti-euro AFD party in Germany took the lead in Brandenburg in three of the last five polls and is in striking distance of doing the same Saxony of which we're going to see state elections taking place at the weekend on Sunday the 1st of September now Geographically just to explain very quickly if you look at where Brandenburg and Saxony is situated So these would contain obviously some of the key areas Berlin its own District if you like in the center of Brandenburg, but then Dresden is in Saxony, but these are on the eastern border of Germany now just a refresher memory of the geography of Germany obviously this is connected to on the eastern side Dresden and Berlin Poland and the Czech Republic and Austria is down at the bottom, which would then be Bavaria So all of these sides here have been ones where immigration has been absolute key part of the political Kind of posturing if you like to gain more popular votes Given the fact that majority of these connected countries on the eastern block tend to be more Far right or right leaning in their political stance Which has led then to a kind of transitioning a crossover to filter in into further increased popularity to the AFD Now the point being here from a trade perspective Do I think that this is going to be a you know a kind of a big gap open in? Let's say the euro currency or European assets on Monday. I think not the Rise of the the the right parties in Germany is not anything particularly new Although it would be somewhat symbolic the fact that if they could win these states sure and have higher Representation just generally in the political scene in Germany but the point is is that this has been a process that's been happening over the last three years or so where Influence power and popularity from the CDU CSU coalition led by Angela Merkel has been diminishing and as a natural European Political development that's been happening across all nations The right leaning parties have been picking up that more traction as those more traditional parties have faded So I don't think it would be a huge surprise is the point So I wouldn't although I will be updating this over the weekend. Of course, I'll be tweeting I don't really see it being too much of a big deal But I am almost sure the press will be make a big deal out of it because it just makes a good Sensational headline about how the far-right are rising and so on in European politics Okay, that is it from me. I'll let you guys Listen to the technical wrap-up from Sam calendar wise today not a great deal going on to be honest There's nothing major coming out of this morning in the eurozone and Equally in the US the only thing really you need to be aware of is the US oil inventory data And just quickly on that note here is the API data from last night We had a drawdown of eleven point one million now expectations were for a draw of just two and a quarter million So much larger drawdown and expected and as I showed you earlier that did accelerate the price of oil overnight And it does hold on to some of those gains at the moment Is the biggest drawdown since June in the headline figure drawdown of 2.4 million and cushing drawdown of 350,000 gasoline to still at draw of 2.5 million. So we'll look at that again later on Okay, let me just hand you over to Sam then and I'll see you in the chat room. Thanks very much Hi guys, so we're all doing well We'll start with that oil chart and you can see and marked up the high that we had back on on Monday So definitely worth keeping an eye is that's not too far away here from potentially getting tested and you can see Around at the pivot 55 of see a key level to the downside and then below that I'll be keeping an eye on 54 58 before we did push higher into the back end of the Session as well to the upside just gonna Move this that way. You can see some quite key levels It's above where we're trading 55 87 not too much in the way of sort of trend lines for now that I'd be You know to bothered about unless we were to really Push on and then we're looking here more towards and above the R1 So for now, I think it's just a case of you know Maybe waiting for that dear DOE data favoring favoring the the upside, you know to to get long That's yeah, where we can get down towards that pivot or 55 26 Before we remain to be seen worth having a look over the current season. You can see well as of Yeah, we still are so currently having that for well down for the day Which would make free so far so worth keeping an eye what happens with this this euro and the dollar in general It's just up a touch on the day See we had that big push on Friday. We've then drifted lowers Trump has eased off a touch So if I put this onto Longer term chart Remove the pivots and this is you know what I'm looking at here for for the euro. You can see we obviously spiked through This trend line a couple of times and really more as a guide not necessarily looking to to get in as soon as we break Or not, but this is a feel for sentiment that if we were to get back below 111 and Kind of this trend that's on here then I would feel pretty confident and we actually do get a test of that low of the year again Each time we've had that push again. We get those breaks through and while previously in the Year where we've had those trends higher and then break that hasn't really happened as much as of late It's more just been a strong push higher Before a gradual move to the downside. We interesting to see what happens. Should we close the day below 111? Certainly something I would have marked up and with the pound as well another up day Yes, so we touch 123 on on the futures and As I've said a few times I really do like the look of a short from from 124 just to Bring in that again here You see that trend line break the low that we had back on the 15th of July or that week So can we get back up to there? Obviously we've had two up weeks in a row Which just looking at the pound here the last time that took place was back in February. So Well, whether we can can get back to towards their 124 this week or not will remain to be seen But certainly a level I would have marked up and from a technical point of view I really do like the look of that as a as a trade really back down towards the the lows that we had Of the year and of course that big 120 handle looking more intraday on On the pound and just bringing the pivots on to give us a bit of a sense of what is going on here to the upside obviously we've got those Well, if I make this a bit smaller you can see that 124 you can see is quite far away But so for that to get here, I would say it's pretty unlikely But certainly if we were just get the trend out To push higher, you know, you look to be having fingers on like this This is a bit of resistance points before we would get to 124 because obviously while that is quite unlikely And you have to see the the highs of today and yesterday all to get through anyway Certainly Yes, they in the brief and this is when that move started to the upside We then broke through and came back to retest what was quite good resistance on Monday So that's still a level 122 56 50 that I would still have on as well And then from to the downside you've got quite a good That's what upward trend as well that I would still keep a close watch if we were to drift lower I think for this market I think a push higher gradually is is is on the cards and then it's just what happens for me at 124 Which will be P. Well, I'm in favor that the euro does overall push lower Speaking of pushing lower. I can't really believe I'm saying this but at the moment I'm I do think equities will will unfortunately drift drift down for, you know, a long time equity ball Yeah, and people won't necessarily believe I'm saying that I'm wouldn't feel comfortable medium term I'm talking now really getting long unless we get about 2940 40 to be honest And just because of just how similar it feels and looks to October November December last year and just a failure here to Really get above that every time Just seems very similar to price action before so unless that was to happen You can see this how good 2900. Yes, they was as a resistance point the low that we had Really on cash open of Friday before that big push lower. So as you'd expect first real test of that pretty strong. So Yeah, sure, you know, that could be the line the sand bias above 2900 sellers in control below But I would this for now be favouring with you know, unless there is any further developments Push to the downside worth having this potential trend on as well over the last couple of sessions and and that will come in around 2862 and a half from the future. So that's something I would would have marked up And of course you have quite a lot of potential support places just below that we did make on On Monday in the Asian session before that big rally that we had of course in the UK Bank holiday So that's something I would would for sure have marked up quick. Look over at gold You can see we did Start the day just pushing higher but the failure to get above yesterday's high source pushed down And so that's a really key level not just from overnight in yesterday, but also from Monday as well So 1554 point six give it or take a couple of cent Either way that will be certainly somewhere to have marked up and that support level that we talked about yesterday's briefing Very key as well. So we've almost got this mini range here It's the upside is is your favorite and sure wait for that to break and we can look for you know Move towards the R1 and resistance that we had back on Monday as well a break of fifteen thirty five point two this lower support as Said yesterday just be aware of any of these previous highs The way gold can move certainly if that was to break Could be pretty aggressive for now though I think I do favor the the upside and one market I do want to touch upon here is just to wrap things up for I'm gonna look at Europe is is silver Which this has been on such a journey really never just playing catch up for much of the year and Just over the last few days is really really accelerated higher and we're now looking at levels Well, you can see we broke above the point from April 2018, but not far. It's in the the journey Here to reach in 25th of January 2018 high doesn't look too far away. It's all a day like yesterday We get that actually have some of my friends that are along silver So they'll be pleased to see just the The move that this is being on but certainly from a technical point of view looks as good a place as any to de-risk around there 18 point 58 or so silver has been on a big move having a look over European socks Did that's pushing down on the first 30 minutes? Oh, sorry, actually, no, it didn't it recovered just pushing down before the open We're just having a little recovery now The failure again You can see just like your US stocks to push on found some resistance really around the R1 and failure to really close Above their source to push down isn't a bit of a choppy range I mean I keep an eye on see on the pivot just due to Definitely put this on a 15 minute how important that whole area has been This morning a good again good a line in the sand as you could want it does seem pretty Choppy so fast and no harm in sort of holding out for that really key level support just below The S1 from the last couple of days You can see yesterday's low as also Monday afternoons Low as well so some point support points below that as well any questions as usual, please do let us know Not hope you have a good trading day