 Okay, very good morning to everyone. Hope you're well Tuesday 10th of September Understand will is listening to us live in China right now. So hello will and everyone listening there Going to go through the usual routine. I'm going to go and run through some of the headlines in regard to Brexit Chinese data that came out overnight in the form of inflation so PPI and CPI we can have a look at also going to have a look at Energy prices because WCI crude oil continues to rally looking to put in one of its best gains that we've seen in about two months Actually in terms of consecutive sessions moving to the upside But before we get into those individual stories and look at the calendar for the day ahead Let's just have a quick review of the charts this morning and it's a relatively quiet open All things being equal a little bit lower in stock futures But I would probably classify them more as flat at this point One thing that we are seeing is a bit of a pullback and interestingly gold is back below 1500 in the futures and obviously that's been a big psychological level of late We managed to get all the way up to north of 1560 in the last week or so, but you have seen a break of that level overnight and Consequently that has acted as you can see here is a little bit of near-term Resistance on the pullback after the initial break. So if I just Highlight that price action here so Dipped lower overnight broke through its respective s1 in the daily pivots And this is quite often what you see when you get these kind of fast money technical led moves in the fairly illiquid part of the overnight session and The market kind of chases down to the next logical point of technical support and you can see that provided by S2 you've then grinded all the way back up and found some resistance then on the point of the original break Which actually lines up pretty much to the to the scent of what would be the $1,500 level in the future space at least on the daily pivot. So range Formed then over the last several hours between that s1 and 2 as you can see but a little bit over Accentuated perhaps the downside in gold overnight just giving the meaningful break of the technicals rather than something I would say specifically on the fundamental front And we trade down about 12 bucks at the 1500 figure for the moment elsewhere T notes a little lower as well down about seven and a half ticks buns actually If I just quickly bring the bun future into shot you can see here again I'd say technicals coming into play to some degree you can see the overnight range and yesterday Afternoons low just being broken And that also taking out the low print that we had going back to the fifth Which obviously was the middle of last week last Thursday and so just a bit of a test on that level Is there anything behind these moves this morning? I wouldn't say there's a headline behind them specifically Obviously the market though things like the Bund have seen a particularly good run with this whole idea of further Accommodative central bank policy action to come particularly this week with the lights have got the ECB got the Fed next week And all the other kind of dovish signals that we've had from global central banks of late So perhaps just a little bit of unwinding or profit-taking from some of those moves Just coming in but as I said over on the charts, I'd say it's relatively quiet Currencies a quick round up the Dixie is trading flat But has backed off and broken its overnight fairly tight range And so it was up generally overnight and as it's pulled back We've just seen a little bit of an upside moving cable towards retesting the interlay hide that was seen yesterday We're gonna get into all the details of course, but now Parliament in the UK has been prorogued which means that now It's been signed into law received royal assent yesterday Brexit all things remaining equal is now going to be delayed unless Boris Johnson is going to challenge this in the courts In regard to the legal wording surrounding that latest Hillary Ben Bill Otherwise WTI crew a little bit more positive as mentioned continues to add to gains. I wouldn't say This is so much anything like a supply risk type headlines that That are going around nothing really on Iran for quite some time in fact What this really is is? Expectations are that we're gonna be in for another drawdown in the infantry situations for another consecutive week In the numbers that will come out API tonight DOEs tomorrow and then also as well We've got the Saudi or minister change that we saw at the weekend and a commitment coming into the JMMC meeting in Abu Dhabi on Thursday that Saudi will continue to form a fairly cohesive relationship with Russia and That they will continue to commit to cuts If anything some speculation that they could go further and cut even deeper helping keep keeping the price of oil propped up for the moment So that's the overview Let's just Get a bit of a roundup of what exactly has happened with Brexit So Boris Johnson, of course called for a second time for a snap election and lost Many Labour MPs abstained in the vote only 293 voted for an election 46 voted against this is Well sure of obviously the two-thirds of majority that would be needed Interestingly UK Parliament also had a secondary vote where they voted 311 to 302 In favour of forcing the UK government to show all documents regarding its no-deal planning as well as private messages In relation in relation to the decision to suspend Parliament I'm particularly interested to see What is potentially a complete lack of planning In regard to actually trying to broker a deal in itself Given what Amber Rudd was saying at the weekend When she resigned that the government is kind of wholly focused on just dealing with no deal Not actually trying to secure a deal which is May I remind you still to this point the government's actual mandate at least for the moment and private messages going around about Suspension of Parliament. I'm sure that's going to be some interesting conservative WhatsApp groups That are going to come to light and all of this of course is going to be reflected quite negatively on Boris Johnson which comes after What the headline has suggested on Bloomberg similar to this that he's lost six votes so far as prime minister So if you thought Theresa May was bad at securing Bills through Parliament Boris Johnson is doing a pretty good job himself at the moment Other things that have happened The Prime Minister of course and just to re-emphasize this point Promised to commit himself to trying to secure a vice-Brexit deal the EU summit on October 17th and 18th Remember Parliament now Is in suspension So that we have this normal period of where the political party conferences will be happening labor end of September Conservatives early October, but the additional couple of days of course given that what Boris has done in his latest move to Pro-rogue Parliament. So the Queen will reopen Effectively the Lower House of Commons on October 14th with her speech that then gives the EU summit on October 17th 18th Which is where Boris is hoping to strike some sort of deal or concessions from Europe He has angered MPs though by suggesting he could defy a new law the law that passed yesterday By pressing ahead with no deal exit if he failed so I if he can't get a deal at that EU summit in mid-October then he's still gonna have a no deal Irrespective of the new legislation put into law yesterday. Now. This is quite a contentious issue because Some suggests that he could actually face jail if he did that because he would be in effect breaking the law I think that's completely sensationalist The the thing here about UK law is it's very nuanced in your interpretation of the wording of legislation And so what the government are suggesting is that they can bend that as far as possible as to how they deem What it is supposed to reflect and that they still reserve the right to potentially have a no deal. However, I do Definitely think that this is just Posturing from the Johnson camp. He will have to buckle and pay heed to the new law that's passed So it will be delayed is my point of view here Couple of other things that happened yesterday, of course Which were which were meaningful in some respect the speaker John Burko announced. He would be stepping down, but of course Only after Johnson's proposed Brexit day of October 31st has passed because the speaker will I'm sure play quite an influential Role when Parliament reopens in mid-October in that two-week period before then we do indeed Seal the fact that it's going to be delayed until January 31st of 2020 now The other thing that's been Interesting has been that Boris Johnson the Prime Minister was in Dublin meeting the Irish PM yesterday Of course, the biggest sticking point remains that of how they're going to address the issue of the Northern Irish border And the PM has actually softened his stance slightly Confirming he was ready to leave Northern Ireland in the EU single market for food and agricultural purposes to reduce the need for checks at the Irish border now That has been a little bit warmly received that we're making a bit of headway However, EU are very unlikely to accept that alone As enough of movement on that commitment on the backstop and importantly, of course the DUP would be Absolutely against that having then the fact that Northern Ireland would have unique rules Keeping it aligned for food and agriculture to the EU single market, which would effectively put an Irish sea border meaning that then Northern Ireland would be treated slightly separately from the rest of United Kingdom, which is Absolutely against what the DUP would want. So, yeah a little bit of softening of the PM's stance I do think that's quite telling considering how harsh and Deliver this and that he's been he's already making a little bit of movement in that regard which I think still Is necessary to get this deal over the line if there is to be one now on the point of what is the probabilities that most economists at the Big Bank banks are thinking. Well, this is the latest out of a Reuters survey that came out overnight And effectively as the headline would suggest Brexit to be delayed the chance of a no-deal departure. I believe it's 37 banks that were asked the question They put the probability on an average at 35% just given everything that's been going on so still a chance that it could happen But only at 35% the range was ten at the low to one outlier at 60% at the high What does this mean then for the pound for the moment? Reality is I think that the pound has already really shown you what all this means for the pound Which is that Brexit is gonna get delayed Till January 31st so when we were looking back at the pound of course and it was flirting with these Really quite interesting long-term levels. We momentarily printed the lowest level in sterling dollar cable Since 1985 However, it was only for a fleeting moment in time and we retested and broke through that double bottom Post the actual e referendum price action when obviously no deal or hard Brexit was first mentioned But we have seen a very strong recovery and cable since that I mean mean me and Sam we're talking about it Just the other day We were like, you know, God have we missed the opportunity here of a lifetime to get in on that that move When we've had that pullback just having a look on my currency indicator here the pound has rallied over three and a half percent Over the course of that initial lobe happening I think a lot of that was accelerated on initial bounce through a bit of a short squeeze I think a lot of people would have been trying to get short on 120 and would have got stopped out quite aggressively on the back of that And that helped the initial move, but now this legislation being Receiving its rural ascent and going into law makes it incredibly difficult for Boris now to to do this in order to get a No deal credible threat and I think as that gets priced out the price has got to continue to move higher Again, just to be clear does this rule out a general election? Absolutely not a general election is still the base case scenario But the expectation is now that that will only be agreed to Once then we come back reopening Parliament on October given the legal timeline for a general election to happen Most expectations now that that will happen in mid November is when a general election is now Anticipated any further upside in the medium to long-term in cable then I'd probably be looking at around these levels 124 17 in the futures 81 then starts to bring in the low point of the December 18th low that was when Teresa may survive that vote of no confidence if you remember and So yeah a couple of upside levels as we continue to recover coming up that might provide some medium term resistance To the price of the pound Okay, few other headlines to be aware of This was overnight Chinese data We had China's factory gate prices shrunk at the sharpest pace in three years in August Falling deeper into deflationary territories you can see here from this orange line well below zero minus 0.8 Percent definitely reinforcing the need for further economic and fiscal stimulus coming out of the Chinese authorities We saw that at the end of last week. They cut the reserve requirement ratio for the seventh time since early 2018 fiscal spending Continues at a pace and this all to counteract the downturn in economic activity domestically translating into diminishing demand and consequently a Consistent pattern of weakening PPI that they need to counteract as you can see though Continuation of the divergence between falling PPI and accelerating albeit a slightly more moderate pace in CPI CPI in line with expectations 2.8% but check out some of these numbers Food price index when you look at CPI rose ten percent on the year from a nine point one percent jump in July at the highest now since January of 2012 pork prices were up just shy of 50% an increase of 27% in July this all coming of course after the African swine fever meaning a complete culling of a large amount of the pig population In the agricultural sector, which is squeezing them the price of pork ever higher Translating and spilling over into other prices and accelerating food price index, which is helping underpin the CPI number for the moment What does that mean again for China as mentioned? It doesn't really translate into something immediate on the charts this morning. It just means that then It gives further explanation as why China are doing what they're doing from a policy perspective at the moment And that will continue for some time to come Oil we already mentioned and looked at the chart. So not really much more for me to add on this point the the The takeaway of course from Prince Abdul Aweez being put in place the first actually kind of member of the royal family to take the head of the oil ministry Position which has always been, you know, such an important role, of course being at the head of the state owned Saudi Aramco and so on The first time that it's been taken out of the hands of a kind of quote outsider and brought more in-house into the royal family But I guess from a market Participant point of view The fact that there'll be no drastic shifts in policy and Saudi look to continue to align themselves with Russia with a coordinated approach Is what's important for the time being Okay, quick look at the calendar. What have we got to come for today's session? Well Chinese data already out the way, so if I just blow this up a bit bigger so you can see we got UK data at 9 30 Given a lot of the political headlines at the moment. I would say Now that Parliament has been suspended Actually Brexit headlines, I think will come off the boil a little bit It really peaked at the weekend the end of last week with the resonations of Joe Johnson and Amber Rudd and the law That happened in the late night in Parliament. I didn't wrap it up till about 1 a.m. Last night now that that's all done I think actually Brexit headlines might might drop off a touch. Does that mean the UK average earnings data will become more important? Well, not so much. I was looking at a graphic that Eddie sent me yesterday about market pricing for central bank rate changes and Although all of markets are pricing in potential easing pretty much collectively across the globe the Bank of England's probably to the lesser extent and That's because obviously the uncertainty surrounding Brexit. It's kind of really shackling the the policy maneuver Capability of the monetary policy committee at the bank. So I don't really see this data being too much to worry about There is a technical level of support Which was a retest of the high print from yesterday cable that if broken might well help push us on up until there are one in the Daily pivots and potentially beyond just given the favorable news that's happened politically that should if anything just Underline that trend of a further sterling recovery. So, yeah to be aware of But potentially not massive breaking news U.S. Session relatively quiet no major data coming out. We continue to obviously keep an ear out for any updates on the trade war side You probably would have read a lot about the J.P. Morgan new Vulfifi index that they've created which is basically mapping Trump's market moving capability that he has in the rates market Through commenting on things like the trade war The point being is that at the moment the Treasury Secretary Mnuchin has said that talks continue Some progress in dialogue being made and of course they are set to meet sometime next month But obviously at any given point in time we could hear of updates on that on that matter Trump, of course, you'd be looking out for in a few hours time when he Awakens from his slumber and hits his Twitter account if he says anything I guess these are ongoing risks to be aware of and definitely I think if you were being prudent I would mark up the charts accordingly if any everything's in a fairly Not a positive state, but things are moving in the right direction What I'd be interested in from a market reaction point of view as he comes out and says something quite aggressive There was that Chinese journalist Which is often who is often closely followed as the mouthpiece in the Western world of what the Chinese government is stating He was quite critical about the US last night, which might rile Donald Trump and just going back to the charts for a second given the close proximity to The low that was seen in yesterday's session in the futures market You've got that s1 and the low point that was seen there In the s&p it'd be quite easy to mark up potentially those downside levels if Trump was to come out and and say something in response to those comments Otherwise API all inventory numbers will come later on tonight Mark Carney is speaking at a council on foreign relations Obviously whenever a head of a central bank is speaking I'd keep an eye and a near open but Not expecting anything from Carney today quite frankly and then for anyone trading US 10 year You get the first of the weekly Round of issuance coming out from the US 38 billion coming in the three-year no auction longer data maturities to come later If you're trading In German fixed income you've got the boom bobble shat set 19 futures expiry so the rollover will continue throughout session today All right, that is it from me That's all the news for this morning So have a good session ahead and Sam's gonna run over now some of the charts in more detail. Thanks very much Hi guys, good morning Hello to will in in China as well. I hope everything is going well there We'll have a quick look over equities to begin with as you can see just over the last 20 minutes or so Just coming under a bit of pressure here We'll start off with with Europe in here in the Dax Just coming to the quite an interesting zone and it would be one that I keep an eye on just from all of yesterday And and the very small gap open we got in the futures is just below here as well Worth keeping an eye on that you can just see the importance of this support point And we just failed to really push above the pivot this morning, which was a previous loan if you have a look at the FTSE on your on your own charts as well you see This is kind of what the FTSE looked like 24 hours ago And then we got the the break lower in the FTSE We got the retest around three o'clock and also overnight before pushing to the downside So just from a technical point of view, you know, if we were to clear that area in the Dax and retest it That's a strategy. I wouldn't mind Looking at too much So for equities in general just under a bit of pressure But coming to important support points and and that is the same for the S&P here You can see yesterday's low is also the low that we had back on the morning or the overnight low on the fifth and then previous Area on the same day as well So coming to important support points by no means is this now ready to go sure and hold for a while But certainly if we were to get below there just from a sentiment point of view You know, those are there the lines in the sand that you would want to to have on for sure If we look to the upside in in US equities and again focusing on this would be more into the afternoon You can see you'd be happy if we were to get back above that trend line and also this morning area of resistance around 29 77 and a half So that'd be a point where maybe later in the day if we get a push above this then you'd be more comfortable For holding a long position, but at the moment as you can see stocks just under a tad of Pressure coming to those lows obviously the Dax more likely to Be the lead here. So that's one I'll be focusing on but with us the NASDAQ Dow and S&P not far from yesterday's lows where There is key support As well to keep an eye. Yes, we've got some UK data at 930 likelihood Is it would just be a short far reaction the pounders perhaps is drifting lower? After a decent push higher as the dollar weakens only against the euro anyway The pound here like we was saying have we missed what you know Have we literally seen the the low of the next few years? You never know with these markets But what a level to have got in on on the false breaker 120 if you remember to our The Q&A we did I think back on the 18th when we were talking just about the pound here It's all about where it closes on that 120 below because below then yes see you later We could get down one 15 pretty quick The fact that we failed to close below you can just see since then update update Yes, we had a down day on the sick But another one followed yesterday and quite a strong level as well looking at More intraday the pivot looks pretty important or just below as an area One 23 20 on the future is a good support point from yesterday afternoon So that's somewhere I would have focused on there just coming down though, you know relatively strong Move here not far from its low of the day So keeping a close watch maybe how if we were to break that low before making this decision to get in around That pivot or not you can see there just getting that test of that level euro pound Up to an important point as well So let's just bring that in and see here Type in the wrong code euro pound you can see just coming up to test that pivot level was also And this is the future but also a decent low from Friday albeit chops through a touch yesterday So the pound is under a bit of pressure this morning after actually pushing to the upside the euro You can see had a bit of strength certainly against the pound recently, but also similar in that move We saw a push higher and the euro I just want to bring on this It's not the most accurate trend line that you'd ever see but certainly You can see here over the last few weeks We're just coming to test the top of that now so as An important level You know those those trend lines again It's all about the closes of them That's something that I'd be focusing on I've got it on a few of my charts and actually a few of the euro pairs as well Look relatively similar to the downside you can see as well. We're just starting to get squeezed so price It's got to make a decision soon And the way you could be looking at it is obviously over the break above or to the downside And that's how I would really focus and it looks kind of like oil does on a on a daily chart price Just getting squeezed in which you'd half expect ahead of the ECB on Thursday So maybe not expecting too much in the way of a big move But certainly those trend lines from the bottom and the top would be something that I would have on there as well Quick look over at what gold is doing as I mentioned yesterday We had that lovely lovely trend line that broke into the afternoon Let me just draw that on as well You can see I was monitoring this at the time of the the interns and got the break got the retest might have Maybe stopped a few people out on that but decent push low and and we got that 1500 We were saying a couple of times just how 1500 did look like an area We needed to go and test just because you can see all these these lows around here going back from the the 13th 1922 and 23rd and we've got that that push there. So on the retest of that area 1503 would be certainly one to to keep an eye on especially in the lower volume morning trade For the range trade from around there. It's not the worst idea in the world. Of course want to keep an eye what? Risker assets are doing at that point, but as important level 1503 Certainly an area I would have marked up on that as well oil made a Multi-week high yesterday breaking above 58 dollars initiative actually literally right on 58 dollars and we can see Here if we just put it on the longer chart and you can see how similar it looks to your robot on the daily We've got that finally that close above here and in the strategy. I was talking about how you know We needed to really break out of here to get a Decent move we just kept getting squeezed in between those two trend lines. We're now above it And the next real key I guess technical level for looking from a market point of view Is the high that we had back on the 31st of July? So keeping an eye on that but also of course any retest of that trend line again to come into play and also Previous highs as well. You can see that's already worked. What was the high the fifth last night actors such good support around 57 76 for the the classic if you like before that push to the upside and some other key levels As well that haven't quite maybe been retested as well 57 28 for oil So break of that trend line pretty bullish ahead of some opaque comments and meetings and so on Quick look over the dex has bounced from that level just shows how important that is and Just reaffirms the idea that if we were to break you could expect a decent enough move If we were to get the other side of that that zone So definitely one to keep an eye on on the on the dex there I've got orders on the FTSE Which is already broken through? So say this is the FTSE trading around here at the moment I'll be looking for it to retrace to to get in that short again Ideally would probably want the dex to be breaking at a similar time As well, but the pound just have a quick look just bouncing off that low Got obviously just under an hour to that data release happens As usual any questions obviously, please do let us know either in training live or YouTube on the chat Got the data coming up in in a bit, so we'll be on the mic throughout I hope you'll have a good trading day