 Very good morning, Anthony here for Amplify Trading. It is Thursday the 11th of June. So hope you are well Going to first of all say thank you for everyone for joining us for the live FMC webinar last night So for those that did attend, I hope you enjoyed it I hope you found it insightful and please do check out AmplifierTrading.com for some more information about us and what we do what we trade and some of our training programs But couple of things I need to get you up to speed on and first of all Is the kind of aftermath always after an FMC decision as much as we were analyzing it live at the time of its release The morning after is normally time for people to you know, sleep on it Digest the information that they've had and you get a bit more of a feel about people's overall Perception of what they think they heard the Fed say yesterday And so I can get you up to speed on that a little bit We can look at the way the markets have reacted and then actually there's been some quite meaningful updates on the coronavirus statistics pertaining to the US specifically where case numbers in a number of key Geographic areas with high density populations, which have seen a flare-up of potentially second wave kind of Conditions so that's the other major thing we need to have a look at and on that point if we start then by just looking at the Overall sentiment at the European Open you can see here the stock index futures in the center Dow S&P or down nasdaq S&P left to right here They're all have tracked lower in the overnight Asia Pacific session. So really even post-pow It was pretty choppy actually the the sell-off Didn't really materialize until really the commencement of the overnight Asia Pacific session. So yes powel in summary I'll recover in a second was overall viewed to be dovish and certainly Equity markets were a little bit indecisive of what to do with that, but the yields did fall gold did rise And some volatility but initially was lower in the dollar would make sense for that But overnight in the Asia Pacific session, it seems to be more it's flipped towards then The idea that the power definitely was highlighting considerable risks and certainly around coronavirus and then coronavirus in itself as I said, there's a couple of Indications that potentially we could be seeing quite a distinct pickup in cases in America, which of course would be Markets would be particularly sensitive to so when you're looking at the charts this morning I mean the Dow future is already down in excess of 400 points S&P 41 that US 10 years up six and a half Six gold really quite a punchy move here I mean it accelerated after the Fed came out on the back of the the dovishness of what power was Saying and the fact that interest rates we're going to remain basically at zero through 2022 and We continue to move higher really all the way up into the US session We've really held that gold did see probably the most I guess one directional And most pronounced to move on the back of the Fed comparative to say equities was very choppy and that often is the case I think if you're ever going to trade an event like that, you know, you've got to kind of pick your battles and often equities falls into this kind of category of you know Is bad good is bad bad in terms of the reaction Do you take it for what it is or in terms of a potential policy response and often the yield gold dollar move is a little bit more Clean in that respect and perhaps more tradable So yeah gold's up about 17 and a half bucks this morning has finding a little bit of support in this top right-hand corner Chart you can see here around the pivot level Perhaps an area a bit of support here. You've got that previous high that we had in yesterday US afternoon Just beneath said pivot of 38 and that level of 35 here Elsewhere in the currency markets the dollar is actually strengthened and we're up in a Dixie a decent amount actually So overnight what we've had remember what I've been saying all this week is the new kind of Correlation that's been quite a focal point from a from a risk identification of risk sentiment has been inverse between stocks and the dollar and The reflective then of looking at the dollar as a safe haven at this point. That's exactly what we've had overnight The the equity index futures have fallen as you can see here in the case of the center charts And then if I quickly just bring in to to view the Dollar index, excuse me my windows just shutting everything there for a second the dollar index you can see here Moving higher overnight in basically the inverse relationship. So you can see here if we're mapping the two on each other That's kind of a perfect kind of X formation in that in that sense So let me just quickly reopen some of my panels here. They just shut down there momentarily so having a look then at a couple of the news stories and first of all then let's recap exactly what it was that drone power said yesterday and we're going to start with Generally the headlines dovish Fed sees keeping the foot on the gas until jobs come back So the Fed maintain treasuries mortgage match security buying at least 120 billion a month So one of the things that they did do is they put an explicit kind of value on that quantitative easing The virus continues to pose considerable risks to the economy was one of the main comments that power made and They said they strongly committed to using tools to do whatever we can for as long as it takes That not that surprising. It's kind of the reiteration of the usual language the actual Phrasing of the economy facing quote considerable risks over the medium term is a Riteration of the language that is used at the last FMC meeting in April So a lot of what did happen last night, you know, they they they had some discussions about this Idea of yield curve control this idea of capping treasury yields out to a specific maturity They told reporters that such to such such discussions will continue going forward to upcoming meetings But they didn't yet kind of deploy that as an option So a lot of it was expected I guess if anything the commitment to keep rates low was was quite a key thing and the fact that they see Considerable risks remains despite then perhaps an overextension of what people were thinking with markets being like they have been earlier this week And the week before where we've kind of just can continue to rally on this kind of almost Renewed confidence that the virus hasn't yet manifested itself into a significant second wave And things have just been on a bit of a tear I did and that kind of was peaked when non-famperos came out Surprisingly strong and so perhaps a little bit of reflection that of Reality kicking back in that the Fed are in you know, dovish and supreme Accommodative mode at this point in time so ultra loose Monetary policy definitely a positive for gold in that respect But when we look at these general correlations this morning, this isn't so much a monetary policy reaction This is more of a classical risk-off reaction. And so for me, this is more tied to The infection increase we're seeing in America over COVID rather than specifically that of the Federal Reserve to some extent Because here you've got weaker equities and a flight to quality into gold T-notes and the dollar at the moment oil down. Yes infertories yesterday But also as well all the more reason to book some at that recent run-up We've had on that gap fill up to around 40 41 in the short term As the market kind of reevaluates things and a lot of people in those more medium-term long look to book some in oil so Back to the headlines one of the things I just wanted to show you because I know we do have People who are more new to markets that perhaps aren't used to looking at this type of information But one of the main things that we had yesterday was of course the infamous what we call the dot plots And this is their kind of matrix of where they predict then when interest rates will be at the end of a certain period of time Not only that though We get to have a look at what did the Fed think the the kind of outlook for GDP unemployment and inflation looks like And you can see the Fed currently see the US economy by the end of the year being in contraction of around six and a half percent But then bouncing back Strongly growing five percent in 2021 unemployment. They see peaking Basically, well, I should say coming back down to given where we are at the moment And finishing the year around nine point three percent and inflation obviously remaining relatively benign as demand is kind of Relatively lackluster given the slow reopening of the economy the important one though when you're looking at this So that this is the main table from what we call the SEP the summary of economic projections And so this is what accompanies every alternate meeting from the Fed on that quarterly basis March June SEP deck when they give us greater visibility about their Forward guidance essentially the one that people get hooked on is this one down the bottom, which is essentially When they ask all of these FOMC members who are present in this meeting a simple question Where do you see interest rates in America at the end of each year and basically they take the current and then the next two years and then what they call the longer run so the long term and What it generated was this and each yellow dot signifies an individual member of the Federal Reserve and as you can see here the interest rate and kind of expectation as far as the Fed are concerned is that rates are going to remain where they are through 2022 so for the next Two years we are going to stand pat of where we are at this point in time That was a bit of a key signal for markets to take it initially and it was a bit of a dovish reaction Couple of outliers here that would be indicative of the fact that you know You've got some ultra hawks where nearly everyone for season zero change in rates over that period There's one individual that sees multiple rate hikes Breaking out from the pack, but that means nothing when we're looking at the median in this respect One of the things I was pointing out at the time is you can see here in the longer term All of the Fed members see I guess normalizing of interest rates that would be around the two and a half percent region For me though, you know, this this dot-plot matrix is completely flawed Because there's a massive gulf a gap here of an unquantifiable period of time where fine I see that they see over the longer term that a natural neutral interest rate that they would want is two and a half percent But what I'm what I'm bothered about is then well What is the trajectory between 2022 and to getting to that point and this graphic really tells me absolutely nothing? so Been a lot of question marks, of course over the recent Year or two about the validity of a dot-plot matrix given the fact of its high degree of inaccuracy Because trying to predict the future out to what's explicitly you think an interest rate will be multiple years down the line is Incredibly difficult. So yeah, I wouldn't really get too much caught up into this to be to be quite honest The other thing then gold obviously you're taking a boost as we said And obviously we've got to keep an eye on some of these these top-end levels that we were training Through may and also the peak that we saw in April. So You know coming up. This is looking at gold futures on comics Around that 1750 which we've retested yesterday and backed off again a little bit One of the things that power was of course saying and you often hear this from central bankers in the current context of now is That they try to push onto the government in order to step up And one of the things we've had last night with Steven Mnuchin the Treasury Secretary speaking talking about the US needing additional fiscal stimulus a Fourth round of fiscal stimulus should include help for travel retail and leisure businesses and possibly more cash for American families According to Mnuchin. He said the administration had discussed capital gains taxes But Mnuchin indicated it's not the best approach and one of the things about you know kind of tax cuts and things like that Is that you need a job in the first place right before you can benefit from that type of thing when it comes to certain tax rules and so it doesn't really address and help the problem and its core so Yeah, more fiscal stimulus Certainly It's got to go through various different loopholes through Congress to get to get authorization and to then be implemented, but certainly This in itself would be a positive and when you think about the the connection to monetary policy The ultimate then move to your curve control probably looking like it would happen Because as the economy starts to in the future return and starts activity starts to perform again Then obviously your expectations will start rising if they want to suppress the long end to keep interest rate Expectations generally fixed and low. That's going to be beneficial then for the government to be able to continue to better Create new debt and borrow and spend in to that extent so Yeah, not not to make too much out of this in the short term intraday This is not so much a focal point. The focal point is elsewhere, which is more on the the covid situation So talking of that, let's have a quick look and a couple of images and statistics to run you through So the headline being that a second u.s. Virus wave emerges as cases top 2 million specific interest on texas, arizona florida in california, and i'm going to show you Some some graphics in a moment Experts say the surges cannot be linked directly to reopenings as yet and a lot of the articles I read this morning are saying It's a little bit too early to say whether or not This is being tied specifically to things like the protests and riots that we've seen across america Looking at then The current state of play This graphic I guess Isn't particularly new the numbers obviously have moved in terms of the Areas of which have been most badly hit by the virus typically being On the west coast in california down in florida And then particularly in the northeast so new york state and so on Now one of the things people have been looking at is this Which is some of the states that relaxed lockdowns earlier So came out of the lockdown earlier and reporting a new rise in infections And these obviously are some of the key states in america in terms of their size of population More than two-thirds of the 13 states that reported more than 500 corona virus cases yesterday Are from the south and west regions that began reopening their economies early last month Give you some numbers here. So texas on wednesday yesterday reported just over two and a half thousand new coronavirus cases That's the highest one day total since the pandemic has emerged as you can see here florida this week reported 8,553 new cases as the most of any seven-day period california's hospitalizations are at their highest it's may 13th They've risen in nine of the past days and in fact nine states have seen covet hospitalizations hit record highs so You know this week has been interesting because you know, everyone keeps talking about equities and how far can equities go Even though it's completely disconnected from kind of economic reality or fundamentals Equities are still big people still feel bullish The biggest risk of course has always been This exact situation and i'm not saying that we've got there yet But i'm saying that as a key subject matter that would create the biggest risk To the kind of stability and rallying certainly we've been seeing inequities has been this And you know, that's one of those things markets always tend to overextend or over react to the information that we see it's kind of one of those Mental ways of which the human brain reacts we tend to Overreact to what we're told and and certainly the market has been somewhat Quite relaxed about how the the virus has been performing and if anything so underlying partly some of the The move higher in equities has been the fact that Perhaps we were over negative in terms of the risk factor associated to a second wave The problem is then you swing so far the other way That now it's not really priced for a second wave anymore And you start to see the first emergence of something similar looking like that And the market gets a little bit spooked Now how far could we pull back here in equities? Well when the us come in i'm quite interested to see how they behave Could be quite an interesting open actually on on the u.s. Session because a bulk of this move And the kind of circulation of this information really has come out in the overnight asia-pacific session So the americans haven't really got their teeth into it yet. So we're quite interested to see how we perform later I would say as i've always said This just means we need to continue with great vigilance to monitor this situation intently going forward Okay, on the the end of the virus conversation This absolutely is not a market mover as far as the broader market is concerned But I think it's always good to keep an eye on what are the specific companies and treatments and therapies that have been discussed in regard to Potential ways to counteract then Covid-19 And Eli Lilian co Could have a drug specifically designed to treat Covid-19 Authorised for use as early as september If all goes well with two Either of two antibody therapies. It's testing according to their chief scientist and so You know with a lot of these drugs You know in a very top-level sense. I think it's quite easy to get You know just oversimplify it and think that you know a vaccine means, you know You come up to me and shoot me with a vaccine and fine. I'm Covid Covid immunity for forever It's not quite that a lot of these treatments are more tied to things like being able to slow down let's say The way of which a person Expresses the type of symptoms with the virus the ability to recover once they have contracted the virus You know, so it's kind of kind of manipulating if you like a little bit existing therapies and trying to change them in a way to make the Covid situation not as bad not to completely eliminate in that sense that comes way further down the line. So Yeah, again, it's one of those things where people kind of Jump all over these types of headlines, but I don't think this is particularly important But it definitely is something again that that needs tracking not just Eli, but Lots of the other pharmaceutical companies and all different therapies of which they're working on All right, final thing then just having a quick look at the Calendar for today. What have we got? Again, particularly quiet in the uk european session. There's a bit of supply coming out of italy And the uk in terms of fixed income, but from a data perspective not a great deal at all. So it's all very much digestion if you like of The it's the morning after the night before kind of syndrome and so Really, I think it's going to be the u.s. That will dictate proceedings europe if anything We've kind of just Held the positioning to some respect of what happened overnight the age of pacific session And I think the real cue for market direction today is going to come when the u.s. Come in And how do they perceive the the kind of information i've just run through With that in the u.s. Session though from a schedule basis You do have the initial jobless claims and once again they are expected to decrease So we've kind of been on a staggered fashion since that kind of 6.6 odd million peak that we had back in the initial March period That's coming down But still obviously particularly high which is going to keep unemployment in the in the millions of course when it comes to the U.s. How important is the initial jobless claims? Again i'm talking specifically from a markets point of view. I don't think it's i don't think it's that important People are very accustomed to this pattern now and even though these numbers are historically particularly high This is all kind of baked into expectations at this point and people will be focusing on on other things. I think I'm Looking elsewhere. You've got the us ppi numbers But we've already had cpi, of course Yesterday and it wasn't really too surprising a touch on the soft side But nothing to to breach the outer extremities of the ranges And I don't think that slightly weaker inflation in the context of what's going on right now with the demand being Reduced due to the economic situation. I don't think that's particularly Surprising and then this afternoon we've got euro group video conference. You've got the eco fin meeting following up tomorrow So a couple of I guess interesting things potentially to just keep a keep an eye on In terms of an ear on the squawk and an eye on the news feeds the ability for Still the full signing off It's not yet a complete done deal of the european recovery fund that 750 billion which we had what two weeks ago agreed That was quite a groundbreaking compromise at the time and it came in the same week when the ecb over delivered, of course Added more firepower to their pe pp. They're kind of pandemic emergency purchase program. That's all the euro rally. So Yeah, interested to see where they're at with that Whether or not they're coming against more resistance against the kind of the frugal fall Who a little bit less inclined for this kind of debt-sharing idea? So if that comes undone that could be very interesting for the euro from a negative point of view given how supportive it was for price initially And then you've got brexit And I mentioned that I don't think there's going to be particularly a lot of movement. I did read or saw some headlines this morning about michel manier potentially putting out some flexibility to compromise on some of the red line areas So yeah, keeping them out for anything related to brexit I wouldn't expect anything specifically big and groundbreaking in that respect because there's still too much time on the clock really For the art of negotiation to really take place bit later on when the when the deadline looms, but but certainly you might see a few comments And then the other thing I'd say that maybe you want to be keeping an eye on is Donald trump, you know trump has He'll know about these virus figures and you know politically one of the things I was looking at Let me just see if I can go back to the ft. There was a lot of people Are talking about this sort of thing and you know, I'm not just picking boris I'm talking about heads of state and governments overall across the world and Particularly boris and trump, you know boris is facing a growing backlash over the virus strategy Essentially what they're saying is There was a previous medical advisor to the government who who said that if they would have just gone into lockdown one week earlier Well, then there would have been half the amount of deaths that there have been and whether or not that's true Is not what i'm trying to say what i'm trying to say is that politically? Obviously this is quite harming to people's perception of the government over this main issue of how they've handled this pandemic And so for trump could he say something? He probably will so maybe worth just keeping an eye and you know again As we've said right from the beginning of the week the trade war is really being parked On the shelf for the moment. It's gone but not forgotten and so at the moment people Are still focusing on this so yeah, maybe keeping an eye out for that as well would be a prudent thing to do All right guys, that is it so any questions feel free to leave a comment on the video Remember to subscribe to the youtube channel if you're watching us there and I wish you a good day ahead. See you tomorrow