 Ok, very good morning, it is Thursday 24th of October, hope you're well. Going to cover this morning a look ahead for two big events coming up, one being momentarily which is the European PMI DASIS so while I am delivering this briefing you are likely to see some movement in European assets so I'll try and do my best to keep an eye on the news scroll whilst I'm doing this session because we've got the various European manufacturing and service PMIs, these are the flash readings for October so just be mindful that these more than likely will move the Euro European related assets you've got the first number of real significance coming out from France at 8.15 so just under 10 minutes time and then the German figures are going to hit at 8.30 for the Eurozone kind of conclusion at 9 o'clock so first things first just be mindful of that over while I'm talking in the next few minutes. Secondly obviously it's the ECB press conference so we'll have a quick look at what we're expecting if anything from Maria Draghi and what the eventual outcome could be but first of all just having a look at the charts this morning at the open. Relatively quiet, a little bit of an uptick in the British pound if you've been listening to the squawk, a couple of murmurs on Twitter from different journalists about the idea of Labour warming to a general election. Otherwise I'll go through the headlines on Brexit in a moment. Other indices in the equity market relatively flat overall positive close on Wall Street last night, the S&P finishing up about 8 points and still holding above that 3,000 level. European indices following suit relatively positive this morning, DAX just off session highs up 62 already out of the gate through the cash open. Daimler shares after their earnings this morning up about four and a half percent just very quickly in terms of the other European movers, ST Microt in France up about four, Daimler up as I said four and a half, Astra, Zeneca and RBS. Astra up one and a half percent, RBS down three are some of the notable market movers on the European UK earning side. Otherwise fixed income and gold pretty flat. So if you were looking at those to get a bit of an idea from a risk perspective, not too many cues coming there as we await this major data and in their major central bank event. So before I get into Brexit and the ECB just very quickly to update you we did have some large cap earnings of course last night. Microsoft shares not really seeing great deal of movement sales and profit topped estimates on cloud and as a slows. So nothing really too surprising sales and profit got a boost from demand for their cloud computing programs and internet based versions of office productivity software lifting results above analyst expectations. But I was looking at some of the research yesterday for two years straight. So eight now make it nine consecutive earnings reports in Microsoft. I think they've exceeded expectations on things like EPS and revenue so it's unsurprising hence to turn around that that company has really seen in recent years to put it right at the top of the pile of biggest companies in the world. The other one was that kind of smaller but more sentiment related company which has helped lift possibly a little bit of just sentiment into the close yesterday and kept things buoyant overnight in the Asia Pacific session. That was Tesla. Tesla packs profit report with positivity as Musk breaks the mold. Obviously what they mean by Musk breaks the mold we're so used to him putting out such lofty expectations and what the firm can achieve and he never really lives up to the hype. Well he did and actually he absolutely smashed the estimates on the street. I can't remember the figures precisely but I think their earnings per share was supposed to be a negative and actually came out something like just shy of $2. Yeah $1.86 in Q3 so it was wildly above expectations. Earnings margins exceeded those expectations. Their revenues did drop but nonetheless their shares did hit or rise as much as 21% last night. That sounds a huge pop in their price but don't forget that it's not abnormal to see a company like Tesla their volatility generally on their earnings reports does tend to be far in excess of someone that you would likely see from a more kind of matured company and someone of the size of Microsoft of course. But overall I think just to quickly summarize on the US earnings so far actually I think you know going into this earning season people were so downbeat you know if you think about xing out the Brexit shenanigans that are going on the economic environment has been souring and you'd think from a corporate profitability point of view both now and forward-looking that people would be pessimistic and actually I'd say on the balance that hasn't happened in fact I think 80% of all S&P companies that have reported the exceeded expectations on their earnings per share so that is a little bit better than the kind of five-year average and I think goes against the grain a little bit of perhaps where people were positioning for about two weeks ago before really earning season kicked off so does give some reasoning for the underlying support we've had in US indices overall and the reasoning why then the S&P for the moment remains above that 3,000 level okay jumping straight into Brexit then here's the man of the moment of course Boris Johnson and what is the latest that we're looking at here so French it's all about the before I get into what France want what Macron's been saying the EU is keeping Boris Johnson waiting over the length of a Brexit extension and really this is the next pivotal point of where we go in this Brexit saga between whether or not he looks to that's Boris persevere with trying to get his deal over the line in time or in the near future or do they grant a longer extension which then open up the higher likelihood of having a general election so what's the current status on the European side before they really give a formal response to what they're going to do the French are pushing for a tighter deadline of November 15th so essentially just giving an extra two-week leeway to the current existing end date of October 31st of course a couple things to be aware of with that a short extension to November 15th could help the Prime Minister if you think about it to concentrate the minds in Parliament as MPs concerned about a no-deal departure rally to try and pass a deal so essentially you're just kicking can down the road by another two weeks in let's get this deal over the line and that meaningful vote of course was the first of any meaningful vote to pass given the three failed attempts and trees in May and that the arithmetic would say there is some appetite to get that past it's a withdrawal bill that struggled the more legislative section of the of the proceedings a couple things though with France and Macron pushing for this tighter deadline he is essentially going against what other European leaders are are more inclined to do which has given more lengthy extension the reason why people are a little bit more from a market's point of view more aligned with the fact that Europe are likely to grant a three month extension what originally is what the UK is asked for to going back to the end of January it's because Macron's made these kind of calls before in previous deadlines that we've had but he's never really followed through with it in the end and so I can kind of understand this is just European political posturing they just want to make sure that the UK's is sure that Europe's not just bending over adhering to the UK request so I don't think it's any more than that I do think at the moment Europe will be open to this probably flexed tension approach by having that deadline in Jan but the ability to execute it if he can get the deal ratified beforehand to exit Europe few other things then to be aware of with the Brexit side if the EU does grant an extension to the end of January 31st which is looking I think still the most probable UK will likely be headed for an early general election now on that front do be aware that Parliament has twice rejected attempts by Johnson to force a national ballot but Corbyn has repeatedly said that once a no-deal Brexit on October 31st has been ruled out Labour will be ready to let him dissolve Parliament so this is really what we're looking at on the Brexit side before I continue on that we've just had the French PMI day to come out the manufacturing figure 50 spot 5 higher than expected by 0.3 the services figure 52.9 expectations were for 51.6 so particularly strong on the service sector in the PMI if you remember France when we had the yellow jacket protest that really hit the service area of the French economy and has dragged them down in terms of their economic kind of prospects so to see that bouncing back quite sharply is quite a distinct positive when otherwise we've had quite negative readings in terms of the overall eurozone economy of late so just quickly just a break from the Brexit talk the euro seeing an immediate spike on the back of that just taking out that kind of double top of last night US close and overnight Asia Pacific test and just powered through the R1 just given the magnitude of that service beat so upside levels we're just having a quick run up here on the fast money move for a retest on that high that we printed back on the 22nd you can see here and you got some of that range high to keep an eye on just a few pips above so yes solid service number from the French and the euro loving life at the moment on the back of that just given how depressed generally European data has been of late and how dovish then the ECB have been sounding of late as well a gold consequently and T notes also getting a bit of a knee jerk reaction on that data again as I said it does go against the grain or of European just general sentiment economically of late but importantly for France that service number has been depressed over the last kind of 12 months and so a bounce back would be a sharp relief for that particular country I'll keep an eye on the don't forget we got the German number as well at half past so I'll try and rattle through this this briefing as quickly as possible but yeah just going back to the point on Brexit few summary points to think about Parliament has twice rejected attempts by Johnson to force a national ballot remember he's pushed for an election before but of course he needs two-thirds majority of Parliament to back him and they never have but Corbyn has repeatedly said that once a no deal Brexit on October 31st has been ruled out Labour would be ready to let him dissolve Parliament that being then the backing of pursuing a general election so really we've had a few tweets this morning from other Labour officials but not Corbyn what we're looking for is what does Corbyn say does he really follow that up or not does he commit to an election if indeed Europe do grant a lengthy three-month extension if that does happen I'd say for me that does play into the hands of Boris to some extent but there's a couple things here to think about in a meeting last night and this is what I'm looking at here or before I do Johnson told Commons yesterday firstly if he was forced into a lengthy extension on Brexit deadline he'd seek to call an early general election the Times newspaper said yesterday he could be ready to do that on either Thursday today or Monday next week just in terms of timing the other thing to be aware of though is as I said he needs two-thirds majority of Parliament to back him to go down election route and last night apparently there was a meeting held by what's called the One Nation group so if you think of the Conservative Party there's the more kind of Eurosceptic ERG on the flip side there's more Moderatory MPs known as the One Nation they're a group of around 70 plus MPs in the Conservative Party and they unanimously agreed it would be opposed to an election before Brexit was resolved so it's not quite slam dunkers yet several Conservative MPs are concerned about the prospects of holding an election in the second week of December when the winter weather could hinder campaigning and activist support and also on the flip side there is the threat posed of course by the Brexit Party and remain supporting Liberal Democrats especially if Brexit is unresolved so some say that the longer it's drawn out and the reason why Corbyn might be open to an election if the deadline then is Jan 31st is the idea that that gives more strength to the Lib Dem or Brexit Party's idea that basically Boris has failed so therefore a more protracted drawn-out lengthly delay would play into their favour hence the reason why Boris probably likes the Macron solution of November 15th because it continues to fit more within his more aggressive timelines to deliver Brexit okay that's it for Brexit I'm not going to go any further than that so really the balance of power from a headline moving perspective today is going to be on does Corbyn back a general election but that firstly is contingent on what the Europe say and what's the confirmation on the details of the length of the extension that they allow okay quickly Draghi and the Eurozone and the ECB today 1245 for the rate decision and statement and then press conference of course Draghi's final one's going to happen at 130 really this shouldn't take me too long because the overall take-home summary here is that I'm not expecting a great deal to be honest it would be I think unusual to see Draghi who's you know particularly well skilled and rehearsed now and these events to really disrupt things for Christine Lagarde who obviously take over as he departs this month and so I'm basically expecting a copy-paste repeat of basically what we had in September the reason why then I mean that definitely leads down the more dovish kind of sounding ECB if you look at this this graphic here this is looking at the three ECB presidents we've had since the inception of the European Central Bank back in 1999 and you can see actually Draghi has had a bit of a tough time the ECB's target obviously is 2% on inflation and you can see Duesenberg and Trichet did a pretty good job at keeping inflation although Trichet obviously had wild swings through the financial crisis but on average keeping it at 2% whereas Draghi's really struggled to get it up there and it's always remained just above that 1% level and at the moment inflation is tracking at 0.8% so wildly away from target hence the reason why the ECB are recommencing their quantitative easing program counteracting the weakness in the economy but also to try and fire up inflation before waning demand if that continued becomes an ever more increasing problem so looking to get a little bit ahead of the curve in that respect you area household sentiment obviously has been decreasing we've broken recent trends and getting down to the press levels that we were seeing amid that really aggressive sell-off we had in Q4 and we had the global stock market route of course with the escalation of the trade war and policy tightening that was happening and that has altered the timeline a little bit about what and when that the ECB gonna act so obviously the recommencement of QE starts and that has created as we know large division within the the governing council about whether that was the right move to make has been very disgruntled from the kind of Germans and the more northern countries in that respect that that was the right decision and then the cut to the deposit rate has been pushed back a little bit but still priced in for the summer of next year this present point in time the thing you're probably likely to hear from draggy and this is a kind of graphic talking about fiscal firepower obviously Germany which typically runs a surplus very unusual comparative to most other eurozone nations does have the lowest debt burden so consequently some fiscal ammunition to act and given the size of the economy that could be a potent force but what they want to do that probably not at this point but you're likely to hear Mario draggy as he has done recently in the press conference kind of bang the drum that governments need to take more fiscal action in order to supplement then what has been kind of a relatively low ammunition box on the monetary policy side okay that's it though I'm gonna cover on that obviously we'll talk about these be much later this afternoon when the event happens but next summary I wouldn't be looking for fantastic moves actually on the back of this I think if he does it as he has become well known for manages the event well I'd be looking for fairly little disruption to market prices and as you can see I think these PMIs are actually more interesting and we've got the German one coming up so just be mindful of that if that German one comes out strong as well you could see another little injection in the euro and a bit more downside pressure in gold that you've already seen which is residing at its S1 in the the futures at the moment other than the ECB and the PMIs you do have US durable goods coming out this afternoon you get US jobless claims as usual on the Thursday and you get the US services manufacturing flash PMIs as well at 245 from an earnings perspective this is just a quick recap pre-market you've got the lights of 3M it's probably the largest company coming out before the opening bell and then Amazon aftermarket Visa Intel probably the names to look out for okay on that front I'm gonna hand you over to Sam I will post the German numbers as they come out in four minutes time into the chat so Sam's aware and he can look at the charts and update his his technical look while he's doing it okay thanks guys have a good day yeah hi guys start off with euro I think no harm in doing that while we've just went for the German numbers to come out and as I said those French beating expectations across the board and we've pushed higher was just looking I've written down and this was before it was coming out just at the the low of yesterday really being the bottom part of that range and now we've got the ECB and I think it would be a safe bet to say whatever the spike is it's gonna do the opposite and then finish the day exactly where it is but worth keeping an eye for later on on this this low from yesterday just to confirm in the bottom part of this perhaps mini range that we are now in the low of the afternoon the 17th as well break below there then I would say the next sort of level to keep an eye on would be the high of the 16th we're now back above there I had marked up as well R1 and the high from the 17th obviously breaking through that now even though we were a bit choppy on Tuesday session we're keeping a watch if we were to come back to retest that area and some of these highs as well as a potential point for the buyers to want to come back in again and whether that be possible if the German and European numbers are you know also a lot better that could be a move that doesn't take place until draggy comes on and then obviously things would have changed a fair bit as well so ECB later on will probably mean just tidying up the technical analysis part of this later on as well but we're just trading at the moment on the highs that we had back on the 22nd so on Tuesday and also Monday evening as well so a bit of resistance you'd expect around here on a retracement well obviously got the data out in three minutes two minutes so probably best to wait for that but I do like the idea if we were to come back towards the previous highs as a nice level of support or profit take of course if the German numbers are worse than expected the load that we just talked about in the Euro same as the pound really the low we hit yesterday was also the low that we had back on the the 18th and that's guided this price higher for the pound we finally got above it's higher the day yesterday evening I've got a nice Facebook message from someone saying it's above my level shout out for letting me know so I can get in on that and yeah we have pushed high I mean it's coming under a bit of pressure off this R1 but nothing doing really there's been any comments out or anything more just a bit of profit taking above that and we're now pretty much on what was the high of last night and then the Asian session morning as well so 12944 is a good enough level I think to the whole price for now above where we're trading as well it's probably worth keeping an eye on from the highs that we've had from the 21st just in case we know we come up and hit that 130 which is also you know some previous highs in the mix there as well and then also from the lows just potential before you know just getting squeezed in for both directions only got the two tests each way so be more looking to see what happens on the potential third test of these levels but quiet day yesterday quite day yesterday and I think bigger fingers to come so have a quick look over at the end obviously got 20 seconds till that European number comes out so keep an eye on that you can just see risk assets pushing higher this morning and therefore your safe havens coming under a bit of pressure I want to keep an eye what happens on this trend of the last few trading sessions we're now closed below it or about to close the hour below so therefore looking potentially and that is a resistance point to come in have a quick look over the reaction here in the euro is the pretty much in line manufacturing lower well there's the word lower there you can see is what that's done to Euro and back down to that are one way of course you would expect a little bit of profit taking to take place so those German numbers not taking the the queue from the French ones and actually coming all worse than expected on investing.com 48.6 41.9 and 51.2 so yeah not not looking good and actually you would say now that support level is unlikely to hold and therefore as well the end on that trend line is likely actually to break above regardless where it closed now so almost the opposite of those French and the gold which came down you've got to imagine is pushing higher which it is and that what would have been a nice place to have got short on yesterday afternoons or yesterday mornings low and then this was also the low from the Asian session now it doesn't look as attractive as before and in fact you may be want to just hold off that short but as a resistance level as a profit target obviously that gold does look good also on gold while we're we're here you can see the the trend lines from the 15th starting through we just couldn't get a break a confirmed break above it got choppy towards the end but we closed the day below so I still would still say that's of some importance 1500 didn't quite get tested as well so that whole area above where we're trading on those highs we've been squeezed in from as hell but overall gold and I keep saying this an overall direction I'm not too sure to be honest about where it is going to go and probably just best to wait for a confirmed break either way also by the time is close that day it could well of course be gone so no harm in sort of looking see if there is a catalyst to get aggressive on the break either way S&P as we saw early trade the DAX pushing higher dragging S&P as well but now the German numbers not so good so we've got to come down and reverse a bit of that and that's what's happened here 3000 and the pivot worth keeping an eye on this there wasn't you know decent enough price action around that area yesterday's high almost this morning's low around six so that's another point to have marked up and also the double top that we have from the 22nd that trend line just before our ones if you are looking to get them later on I would be looking to take profit definitely before we get to that resistance point as well having a look longer term you can see obviously so close really to testing these all-time highs again which is quite incredible really but again longer term up around coming in around 30-20 would be another point of interest that I would have which is only 11 points to the upsides of a day like yesterday we would get that test as well quick look over at oil to finish things up decent push yesterday on the the shock draw should we say of the DOE in comparison to the API good push higher really that coming in and getting us up to 56 and closing the day quite nicely you can see above what what was a good resistance point at 55 that we were talking about so that's still an area I'll be looking at the potential points to get long on that possible retracement seems like the balls have won that thanks to that DOE above where we're trading next what key level market-wise of really important highs just a bit above where we're trading here 56-60 basic a dollar above so we're now perhaps a bit mid-range for the next decent opportunity we can see once we broke that 55 a good battle around there in which the balls then won also the R1 from yesterday as well any questions as usual please do let us know you've got 25 minutes on the dot pretty much until the European numbers come out and of course draggy then 1245 release and 130 presser will be taking over a lot of people's attention hope you'll have a good trading date catch you later