 Hi there, I'm Anthony Chung and I'm the Head of Market Analysis here at Amplify Trading. Every weekday morning I'll deliver a fundamental rundown ahead of the European Open. But if you subscribe to the channel, you'll also get content from the rest of the team. So, let's begin. Okay, very good morning to everyone. I hope you had a good weekend. It's Monday the 12th of October. So just going to have a look ahead for the week. I'm going to identify a couple of the key things we're looking out for, discussing some of the major economic data, an update on things like Brexit, obviously coming into an important self-imposed deadline on Thursday ahead of the EU summit happening on Thursday and Friday this week. We've got US earnings starting, if you can believe it. We've also got a keynote speech with the new unveiling of the iPhone 12 coming out from Apple as well this week. We've got updates on fiscal stimulus, talks in the weekend, so plenty for me to get into. So I'm going to spend very little time talking over the charts from a technical perspective and more so talking about the major stories you've got to be aware of for the open today and also the major things to give you a kind of a visualization of what could be some of the key things to monitor that could dictate market direction and sentiment for the kind of week ahead. So just having a look at how things are performing and equity index futures back onto the front foot in early trade. We've just gone through 7 a.m. here in London and the S&P up about 12, the NASDAQ up 62 points and then DAX futures up 87 at the moment. Just I guess for a bit of context let's just have a look at the S&P and you'll have to forgive me for not having the latest annotated notes on the chart because I was off the desk for a couple of days at the end of last week but the point here is I wanted to show you just the strength of the rise that we've seen in equity markets particularly in the US in the tail end of last week and we've come up to quite a key level both in the S&P 500 and the NASDAQ. So I've just put a kind of colored rectangle here for you to see it which was the previous push up to what was then the all-time high as we started to see that push in the mega cap tech names towards the end of August and that also provided a bit of a floor of support around that price action at the end of August and also a point of resistance on the recovery after that big rotation selling day that we saw when the market peaked at its all-time highs just short of 3600. We're right back at that mark again and obviously that level of around 34, 84 and a quarter which is quite technically key sits just below the psychological 3500 level so on the upside interested to see how the market closes today you can see the run-up that we had on Friday on the 9th we did find resistance up and around that point and then for the NASDAQ it's kind of a similar story in some respects if I just make that chart a little bit bigger as well and put it onto a daily continuation. You can see here we've broken up through what was quite technically an important level around 11, 7, 22 and a half and now we're looking to push up to these two areas here I'd be looking at on this higher time frame which is if I just put in the lips here and also on that candle low there and that level at 11 834, 35 type mark and we're shy of that at the moment but another 100 points or so on the upside and we'll be up there as far as the NASDAQ is concerned and certainly that's achievable on an intraday move so some key levels of resistance here I think just given the the strength of the rise could be a decent upside cap for price action today barring any unexpected breakthroughs in things like fiscal stimulus talks and so on and so forth which again we'll talk about in a moment have not been progressing particularly well so far otherwise in other asset classes the dollar got really beaten down towards the end of last week and so it did gap up a little bit and hence you can see this these opening moves that we've had in the currency pairs here in euro dollar and cable there's been a bit of movement however the dollar has kind of weakened through the Asia-Pacific session and that's just provided a bit of support if you like for these major currency pairs changes are fairly minimal euro dollars pretty flat cable despite all the brexit headlines that have dominated the UK national press at the weekend is up about 11 pips and just looking to retest up and around the closing high we had an electronic trade in the futures on Friday night just finding some resistance at 1354 at the moment otherwise elsewhere T-notes very quiet really overall nothing's really happened overnight gold is positive and continues to hold on to some of the gains that were seen towards the back end of last week just close proximity to the overnight Asia-Pacific high which was seen at 1939 trading about five bucks short of that at the moment and then in oil we are lower certainly some stories I can update you on particularly pertaining to Libya as they continue to bring more production online we've done around 44 cents there at 40 dollars and 17 cents so let's get straight into it and start talking about not just here the calendar but also the actual stories that were in play from overnight and rather than talk about the calendar straight away i'm going to jump to this and this is just to get you up to speed and what's happened in the overnight session the headline reading then the that the offshore yuan fell it dropped about 0.7% in the overnight session after Chinese policymakers acted to restrain recent strength by making it easier to bet against their own currency and why is this happening well here's a look at the onshore yuan spot over the course of the last two years and really drawing your attention to the last quarter's price activity here we've seen the Chinese currency accelerate its gains quite dramatically and obviously this is a big U-turn from where we were this most recent or back in March I'd say when the initial epidemic started to take hold in mainland China of course before the full-blown global pandemic on Covid and since that point the yuan has continued to strengthen as their economy has stabilised and effective as of today now financial institutions no longer need to set aside cash when purchasing foreign exchange for clients through currency forwards so with the yuan surging around 1.6% on Friday remember that was the first day of trade after they played catch-up it was the first actual day on Friday of trade for the entire month following those national day holidays and that has come in the context of the yuan extending its best quarterly advance in some 12 years and obviously China is very mindful of the kind of reference point of where it fixes its daily currency given the fact that it is an export related nation and so an overly strong currency is something that they generally tend to act against and with as well another new story to be aware of with China overnight is that Chinese shares led some of the regional gains as investors mulled an expected visit by Xi Jinping to Shenzhen this week amid optimism he'll unveil plans to further open parts of the economy to foreign investment which I thought was quite interesting because irrespective of this kind of superficial I would kind of call it in a certain respects kind of political rhetoric coming out of the administration in the U.S. trying to have an anti-China stance at the same time China are actually opening up their their economy for even further for foreign investment at this point which obviously will include the the USA so that though any idea of further strengthening of their currency they need to act now and a type of soft form in order to control any further appreciation because that would be net negative for their their economic recovery post pandemic so that was overnight something worse being aware of and obviously China now back fully into the market after being out for much of October so far but let's have a look at the U.S. and first of all I'm going to look at the calendar because overall here there's not too much in the way of major UK European data there's a couple of things I'll talk about in terms of jobs in the UK ZW in Germany coming out on Tuesday but overall it's more focused on U.S. economic data on this perspective then the things that we're looking out for if we just quickly scroll through you've got U.S. CPI coming out Tuesday on Thursday you then it means a lot of Fed speakers coming out got initial jobless claims of course empire manufacturing and then you've also got the U.S. advanced retail sales report as well coming out at 1.30 on Friday so overall what are we to expect from these data points well for inflation it's expected to be modestly higher in September but not enough to suggest that inflation is back close to the Fed's target remember we're talking about the average inflation targeting at the moment so it has taken a little bit of a sting out of that kind of more definitive 2% target that we've got for inflation metrics in the western developed central banks but overall should continue to to to move up a little bit higher inconsistent with themes that we have seen of late otherwise Friday sees the release of U.S. retail sales industrial production consumer confidence so quite a batch of data coming at the end of the week in the U.S. all three should pose decent increases given manufacturing business numbers car sales credit and debit card transaction numbers in combination with rising equity markets in the strengthening housing market according to analysts at ING a do note though that the labor market improvements are stalling and income support from government benefits are waning suggesting the numbers may soften more as we head towards the year end so at the moment it's hard to really see too much market ration to some of these data points because as I've just described we're kind of coming off an incredibly low base from the impacts of the depths of the pandemic so generally these data points have been pretty healthy however with a lack of force coming stimulus with government benefits benefits waning then as such it's more about people perhaps a little bit nervous about year end which means that it might offset any positivity now so something to just bear in mind the other thing of course it's happening is the second presidential debate was supposed to be taking place this week however the latest on that is that trump has said he will not take part after organizers decided that it should be a virtual event for safety reasons the third debate on 22nd of October would be the final encounter between the candidates before the actual election and let's just have a look at how the polls are looking at the moment the average real clear politic poll kind of the poll of polls currently has biden with an advantage of 9.8 percentage points at the moment so you can still see here continued divergence between the two really since the very first presidential debate that happened well a week and a half or so ago now so that's not happening this week but definitely worth keeping an eye of course as trump i think he got into a little bit of trouble with breaking twitter rules by saying that he's now immune having had the virus and got rid of it which obviously breaks their rules because scientifically he's got no proof of saying that misinformation now is being locked down by a lot of social media agencies but nonetheless keep an eye out trump's going to be banging the drum for sure this week as he continues to recover from that episode of contracting the virus on that note one other thing i wanted to mention about the election was a latest research note coming out of golbin sacks they've joined the lights of ubs and investco predicting a weaker dollar as biden has extended his lead over trump with only three weeks to go now until the actual election goldman said the dollar may tumble to its lowest levels of 2018 on the rising likelihood of joe biden winning the u.s election and progress on a corona virus vaccine so blue wave so that being a full democratic sweep both chambers and the president biden win could see the dixie test 2018 lows is what they're suggesting and then the final thing is of course not just about election and trump it's also about fiscal stimulus which has been a real kind of intraday headwind to be aware of when you're holding any position of risk and the latest on that side of things is here the trump administration on sunday called on congress to pass a stripped down corona virus relief bill using leftover funds from an expired small business loan program as negotiations on a broader package ran into resistance and this came after the end of last week you remember trump kind of gave the signal to his team to let's go big to try and meet the democrats and get stimulus underway and they offered some 1.8 trillion but that was rejected by various different democrats over the weekend remember their their current posts sits at around 2.2 trillion so still the far away short of some 400 billion there so continue to be mindful and vigilant for any updates on this front market has been particularly sensitive to this of late the other thing then is apart from the the major data that we've got so cpi retail sales industrial production consumer confidence coming out in the u.s this week you've got to keep an eye on the fiscal side and the trump side in the election the other thing then is fed speakers so if i scroll down on the economic calendar here you can see wednesday's littered with fed speakers and many are talking about the u.s economic outlook like clarita feds kashkari you can see whole lists of fed speakers on wednesday and thursday predominantly and then the other thing to mention is of course we've it feels like no time at all but we're right back there now into u.s earning season if you can believe it and traditional way of which this thing starts to kick off we get the big banks reporting this week so to give you a quick run through of what we have we've got jp city johnson johnson on tuesday so nothing today kicks off tuesday wednesday bank of america goldman sacks and wells fargo thursday ms friday state street schlumberjay perhaps another one to keep an eye out for as well what are we expecting really from earning season well wall street is bracing for lower earnings analysts expecting some pretty deep declines here i've got a bit of context here for you so in this upcoming week there are 30 30 s and p 500 companies reporting six down 30 components for numbers for third quarter most sectors will again show steep drops in earnings but it should be less dramatic than the previous quarter expectations are for an average of 21 per cent decline versus the 31 per cent contraction at the scene in q2 that kind of captured the real hard part of the pandemic downfall and energy companies are seen faring worst as you can see here right at the bottom followed by industrials consumer discretionary communication services but having a look at this one this is a look at wti crude oil price in blue line and market value of energy sectors a percentage of the s and p 500 in the pink line and as i said energy companies are seen faring by far the worst of all of the individual sectors with earnings down 115 percent from a year ago energy stocks continue to underperform the market this year producers really struggling to break even and investors remaining particularly tentative of course on the impact of what a joe biden presidency could mean so the bigger his pole advantage becomes the more likely a blue wave could materialize the more impactful that could be on the energy sector in particular and as you can see here the the sector continues to weaken despite the broader recovery and stabilization overall that we've had in the price of crude oil of late so yeah earning season kicking off and then don't forget as well tomorrow you've got apple obviously delaying a little bit their event to unveil their latest full iphone 12 lineup this is the latest leaks a chinese weibo account named kang basically came out with all of the information that they're going to unveil on tuesday this is very normal of a major apple event you know the the various different blogging websites so good at getting hold of all of the leaks they're pretty much bang on nearly all of the time and even though this is a chinese weibo account i've read the article it's being verified by a lot of the big hitter more u.s oriented blog sites so it looks legit but basically you know if you're interested it goes through and outlines all the different price points the pre-order launch dates and more information about the new iphone 12 that's coming out it also talks about some of the other things to look to look out for as well but overall i mean iphone 12 i don't really think it's going to reinvent the wheel a great deal as i said i was off the desk at the end of last week but generally speaking apple shares tend to react not so well on the day of unveiling it's more kind of a buy the rumor sell the fact type price activity that can quite often occur although apple is a big obviously market cap stock i wouldn't anticipate this to be a real index mover on tuesday night could it create a little bit of a percentage share price movement for the isolated stock sure would it be an index future mover i doubt it not with all the context of the other stuff that's just going on at the moment from a global macro perspective all right we're going to jump over and we're going to have a look at this small issue called brexit the never-ending saga so let me get you up to speed of where we're at at the moment the government of course in the uk has said it wants to outline of a brexit deal by this thursday the 15th and the u leaders are meeting on thursday and friday the 15th and 16th of october talks are resuming today remember the prior week saw the recommitment to go out of the official round of talks having not struck a deal into more channeled tunnel talks so that is happening from today so there is still the prospect of headline risk for sterling so keeping an eye on those twitter accounts from the various journalists tweeting throughout the day personally from a top level i don't see any breakthroughs coming this week there's obviously going to be lots of noise around it particularly towards the end of the week and i think we'll probably end up with a commitment to just continue on talking but still no real backing down from these quite definitive lines that they're putting into place at the moment johnson has told angler-merkel apparently yesterday that there's gaps that remain with the eu and time is running out while france has warned that no brexit deal is better than a bad one on fisheries so macron stealing a little bit of the infamous phrase from boris johnson to throw back at him at the moment so still fairly contentious at this point although there were apparently some several calls over the weekend the only lasted 30 minutes each apparently but they had been extensive back and back channel contact in recent days between really the three main parties in play london paris and berlin indicating that all parties are still pushing despite the kind of saving a face so it's an interesting one politically when i think about it from a strategic point of view you know whether you're boris mackerel merkel you have a national public to kind of appease and you've got to appear firm in the stance to to represent your nation and the will of the people in in regards to things like brexit and in europe mainland kind of unity and so talking out quite harsh about you know will walk away you know warning of a no brexit deals better than the bad one on fisheries to me a lot of that is just hot air i do think that the fact that behind closed doors there's back channel contacts being intensifying does show to me that look they do actually want to get a deal done it's kind of like one of those things with the u.s and china trump says he hates china and yet china are buying more goods than they ever have done and china are reopening even further their economy to foreign investment of which for sure america will be participating in so it's kind of like political servicing on one side the actuality on the other and i do think that although it breaks a deal i don't see coming this week i do think that there'll be a commitment probably by the end of the week that they'll continue talking and i think the market is pretty comfortable with that point at the moment so i wouldn't anticipate anything like a sterling collapse just because they don't strike a deal as soon as this week other things to be aware of though there is uk employment data coming out on Tuesday there's a little bit of focus on that but i don't think you can really read too much into it obviously the chance has come out with a new kind of light furlough package for some of the hospitality sector a lot of that though does take away some of the real true legitimacy of what is the underlying unemployment rate which has been actually okay despite all things considered in the economy given the furlough scheme that's been in play for the last couple of months but i think that uk economy data definitely takes a backseat to brexit and covid at the moment in the uk and talking covid in the uk this is another tangible risk to look out for for sterling the pm is expected to announce new measures measures excuse me to tackle a growing coronavirus outbreak daily cases as of sunday were just shy of 13 000 so still fairly elevated sky news which i'm showing here basically reported last night that it could mean shutting bars gyms casinos and bookmakers as part of a new three-tier lockdown system it's going to be predominantly focused in the north of england a lot of focus as well on Liverpool as an actual city to go in a more stringent lockdown the other thing as well on the calendar for the uk side if you are looking at sterling today particularly you've got bankers haskell speaking at three p.m. this afternoon you've got governor bailey also speaking at five o'clock later on this week actually the chief economist howl dane speaks on wednesday and the deputy governor cunliffe speaks on thursday so a lot of bank of england speakers at the moment and i do feel this is somewhat the fact that they're still not completely satisfied and content with the markets current expectation around the idea of negative rates so perhaps then kind of littering in speakers throughout the week to try and just realign market expectations on that particular point so something to just bear in mind also as of monday it is a national holiday in america all markets are open as normal but it is columbus day in america so just be aware of that as well now from the european side of things i did want to mention i think i've got an article here this was the chief economist philip lane you probably recognize that chap's name because he's made some pretty punchy comments in recent weeks about his concerns about the strength of the euro particularly when it was up at 120 when it was really threatening a bit of a technical breakout that could have opened up a run to 125 at the time and with the dollar continuing to weaken as it has done recently uh and also like some of those big banks were saying with the prospect growing of a biden and a blue wave victory at the us election in three weeks the potential for that to re-weekend dollar by de facto might strengthen the euro further and so it looks like the ecb are trying to get ahead of that once again this came out in the wall street journal at the weekend philip lane saying the ecb isn't happy with the inflation outlook and will decide meeting by meeting whether more monetary stimulus will be needed but he was also across other european press supplemented by visco who said the ecb must maintain its expansive monetary policy for some time to counter deflation risks and casimir said the ecb will do all it can to bring inflation in eurozone to desired levels so for me this is all a bit of a coordinated effort that the ecb members again a little bit nervous about the recent acceleration of the euro dollar currency pair now that we can be back up into the kind of mid-118 handle so not not surprising but something you can probably expect to expect to continue to happen as we continue to move higher in euro if that does materialize from the european perspective as i said on tuesday you did get the germans lew numbers they'll provide the first indications of october economic trends and keep an eye out for more european potential national lockdowns in a similar fashion to what we've seen in the uk obviously more stringent restrictions have a more intense economic impact and if covid cases mimic anything like what we're seeing in the uk this is something to be mindful of for trading european assets as we go through the week particularly those more economically important areas like germany france spain and so on also the other thing is to look out for is we've got that european leaders meeting happening on thursday and friday although a lot of the topic will be dominated by brexit don't forget then that europe still has to put the finer details together about their fiscal stimulus package and so this is the one that i agreed back in going back to may and so here this the end of this week it could just not just be a us fiscal stimulus story it could be also european one and if anything really with all the fed speakers probably the one thing you're likely to hear coordinated across all is about putting more pressure on governments to provide more supplementary stimulus to the system via fiscal measures given that monetary is becoming fairly exhausted at this point in time um let's just quickly round things off and look at oil and this is libya it's one i'll close on uh so the national oil corp libya state energy company lifted force majeure on western deposits of the sahar sarara and instructed it's operated to resume production according to a statement issued by the company on sunday the field will initially pump 40 000 barrels of crude a day before reaching its capacity of almost 300 000 barrels in 10 days time according to a person familiar with the matter that would roughly double um libyas well this is so the field will initially pump 40 000 barrels of crude a day before reaching its capacity of almost 300 000 barrels in 10 days and a person for with knowledge of the situation said that would roughly double libya's overall output to around 600 000 barrels a day so at the moment libya's production has gone from 100 to 300 now with this biggest field in libya which libya has africa's largest oil deposits by the way they're going to double again from 3 to 600 000 so supply just keeps coming as far as libya is concerned at the moment and as i said oil already finding a little bit of weight this morning despite the more optimistic equity kind of move higher that we've had oil is down about 50 cents for the time being so that is it really for for my look ahead for the week so as i said quite a few things to to to look out for there also with the equity markets i'm a little bit mindful of the fact that we've already started to turn a little bit as i said there's some key resistance levels and just given the how much we rallied towards the end of last week i don't think it'd be too surprising to see a little bit of kind of soft profit taking up it around these levels and then barring any shocks particularly on the fiscal stimulus breakthrough on talks would be required i'd probably say in order to see another push higher you got earning season kicking off you got more probably trump tweets to be mindful of to brexit stuff's going to intensify from headlines but again not really for seeing much in a way of any real definitive breakthrough and then really from economic data point of view more us focused particularly on friday but that's pretty much it so i'm going to leave it at that let you guys get on with the week any questions at all just let me know in the chat if you're watching some youtube but obviously good to be back and have a good day ahead thanks very much