 Good afternoon and welcome to the weekly market update with me. David Madden. Today's date is Monday, the 19th of October 2020 and the time has just gone 12 or 4 British summertime and it's been a fairly quiet start to the European trading session Volatility has been fairly low. Even though there's been a few interesting stories during the rounds One of the main ones is the economic indicators that were announced from China overnight We're encouraging Although they didn't have a huge impact on the market in the third quarter The Chinese economy grew by 4.9 percent on an annual basis and that was a big improvement on the 3.2 percent growth That was posted in the second quarter. So it shows that the recovery is picking up But keep in mind Economists were expecting a reading of 5.2 percent. So they came in below expectations 1st of September retail sales and industrial production both showed decent growth on the month They, you know, it can confirm, you know, it adds weight to the view that the economy the Rebound and the recovery is actually picking up in terms of pace and momentum It also can be hired next and expected to both two readings But there hasn't been the huge lot of excitement China is a big importer of commodities things like copper and and Oil and with that we haven't seen a huge move in either in the commodity space Um, they are a bit higher, but not not not as much not up as much as one might think given what's going on Also in the news, uh, the british pound is doing quite well. Um It was there was a report a report in the last there. So that the um, at the uk our Government are considering diluting or watering down the internal markets bill And this is the kind of controversial bill in relation to the kind of which could which could Basically breach the breach international law and if it's the potential watering down potential dilution of that bill would be to try and get a deal with the eu So it seems a sign that A bit of compromise has been made on the british side Keep in mind at the back end the last week the british prime minister boris johnson said, you know To people and businesses be prepared for a no deal scenario But in the last in the last day 48 hours, we've heard about the possible watering down of the internal markets bill So kind of this is intentionally by the x of it the uk government are leaving the door open to the possibility of a deal Uh, so that's that's had a big impact On the british pound that's been pushing higher. Um, eurozone Confidential stocks and eurozone stocks have been unusual today. I haven't we've had a bit of an it glitch on euronext And so with that trading in the cash equities the actual individual shares on many of the big european indices European big european stock markets hasn't actually been working. Uh, it's back trading now, but for a good chunk of the morning that was missing so You know the index futures were trading all the time But the actual individuals online shares were not and when you have one but not the other you don't really get a proper picture of the sentiment Lastly, uh, nancy pelosi, um, of the democrats, uh, the house speaker Uh, but basically said it's optimistic that the democrats and the republicans can strike a deal But at the same time you can have self-imposed deadline is for tomorrow Uh, if uh, you know, if this is pelosi saying that If the republicans want to get a deal before the u.s presidential election, which is in november Um, it's one of those things we continue to hear about about both sides have differences both sides are optimistic both sides are trying But you know, this is kind of the same old story lots of talk but not a whole lot of actual political progress, but because because Nancy pelosi said she's optimistic We're seeing a tick higher in us index futures. So traders are kind of Not betting against, uh, they'll appear to be betting against that outcome But at the same time, there's a lot of people out there that are skeptical that we're going to have a compromise made between now and tomorrow So as always, I'll give a quick run through of the week ahead article And then I go through the major markets indices currencies and commodities Uh, if you go to our website seamseamarkets.com Under insights you've under latest news analysis. You'll find the week ahead article As I mentioned, we have the chinese figures. We're out overnight Tomorrow we have third court numbers out from netflix. Uh, this is going to be in focus Given that because of lockdowns and restrictions, uh, we we saw the last couple of quarters Very strong and better expected Viewer subscription numbers from netflix. That's going to be back in focus People are going to be wondering what's going on with production plans What's going to be going on with the growth rate of subscribers How have you kind of reached saturation point? Is it tapering off? These are the sort of questions traders will be asking Rick and Ben Kaiser, uh, they make a lot of household goods some of which are actually kind of, you know, cleaning products Uh, they have third quarter figures out tomorrow On wednesday, we have the beige book kind of a snapshot of the what's going on with the us economy On wednesday night after the us close, we're going to hear from tesla Obviously the share price has been very volatile in recent months So any updates in relation to production forecast? What have you? Uh, it's going to be it's going to be in play Microsoft have a q1 numbers out on thursday. They're a cloud business. I've done very well in recent quarters And obviously you're going to like the cloud computing has become even more popular in the last few months Unilever, uh, kind of well known kind of, uh, household goods brand Not too dissimilar to rick and ben keiser. They have third quarter numbers out on thursday amazon, who basically have cleaned up Because of the pandemic and the kind of online retail world They've got third quarter numbers out on friday We also have an update from barkley's on friday. So this is so uk banks We've heard from us banks. We're going to be hearing from you from uk banks In the next obviously friday with barkley's and then And not to and not not too long after that we'll be hearing from roll bank I was like that was that was that was through rather And loads in the likes and as always people are going to be focusing on What's the deal with the trading desk? How much money is bark app making in terms of its trading desk? But also any relation any provisions in relation to potential bad debts also on friday we have um The flash PMI numbers out uh from france from the uk from the uk france in germany And we also have uk retail sales. So this is going to be interesting because It gives a flavor for how how bullish or not optimistic or not be at the case uk consumers are So starting off with the indices starting off with the footsie 100 we can let's take a look now So the footsie 100 hit a four-month high in fit in in june in its highest level since june Apologies in a three-month high in its highest level since march But since then it's been fairly kind of clear an obvious downward trend We have been pushing lower What we hold below this blue line here the fifth and moving average which comes into play at five thousand nine hundred and eighty What holds below that metric is likely we could see the kind of broader Negative trend continue but keep in mind We seem to have found decent support in this zone here the kind of five thousand eight hundred down to five thousand seven hundred and sixty seven So we've been on a series of lower highs along here But we haven't been printing lower lows So it seems to me that this area could act as a bit of a has this area has acted as a support recently If you continue to hold above that metric and don't create lower lows We could stand a chance of heading back up towards Six thousand just just beyond the fifth moving average And if you go beyond that we could be like retesting the highs of mid-october and if we take off the highs in mid-october Turn as I've been looking up towards the highs of mid-september in around six thousand One hundred twenty six And if you go beyond that then the highs of mid-october will then be uh will then be out on the cards If you do manage to you kind of turn lower on ourselves keep an eye out for five thousand eight hundred down towards five thousand seven hundred and sixty seven If you have a break below that that'll be quite significant because on a few occasions this zone act as support If you have a break below that it could take us back down towards this area here Around five thousand six hundred and sixty Take a look at what's going on over in germany and the dax So that germark has been rebounding for the last over a month since late march It was in uh early september. It has highest level since february. So it is seven month high in uh in sept in september, but Even though we've had a fairly decent, you know overall correct correction and we bounce back the highs of mid-october Didn't really didn't retest the highs or take off the highs of mid september, but we do appear to be kind of Creating um higher low. So the bias is just on the upside Notice how on a few occasions the market traded below this yellow line here The water didn't move the average and as a few occasions we're literally traded below But on the particular day on those particular days It's always managed to actually close above it even though it has traded below it. So If you can hold above the fifth of the moving average, it's likely that the broader upward trend is going to continue If you press on higher from here because we're currently around 12906 If you press on higher from here, we could be looking at heading back up towards the mid-october highs in around 13191 If you go beyond that we could have been looking at you up heading up toward this zone the highest in mid september In around 13277 and then beyond that the highs of early september the multimodal highs that were achieved In early september will then be on the radar If in the other hand we do have a kind of move lower if you take if we Break below this area here 12600 That could be that could be a could be a sign that we're heading back down towards this general zone here of 12339 And now the kind of 12300 down down towards this red line here the turn the moving average Which comes to play at 12149 Over in the u.s. Starting off with the dow jones So the dow jones in early september hit its highest level Since basically february. So it was about seven so multi-month high was racked up seven month high was achieved We then had a fairly decent Correction the market but notice how this yellow line here the water the moving average acted nicely as support So we've been pushing higher since Granted the highs of mid-october didn't retest the highs of mid september, but notice how We are comfortably above this blue line the fifth the moving average that comes to play just north of 28 000 in a 20 2016 While we hold above that metric it's like at the broad rubber trend is going to continue If you press on higher from here, and we retake the the earlier the mid-october highs We can then be looking at heading back up towards here at 29 198 A pullback could find support from this blue line the fifth the moving average At 28,000 to 16 or 28,000 itself kind of Rounded down Um, and if you do move below that we could even find support from this yellow line The 180 moving average at 27 189 Notice how it acted nicely as support In late september and if a metric has been important in the past it makes it more likely it'll be important in the future But there are no guarantees What's going on with the s of p 500 fairly similar situation to the to the dow Jones whereby It's called to be above The fifth the moving average this blue line here. We're probably not across sort of it, you know Within we're in relatively close proximity to the october highs If you press on higher if you can hold above the fifth the moving average It's likely that the broad rubber trend is going to continue If you move on higher from here, we could be looking at testing the october highs And if you go beyond that we could then be looking at heading up towards the all-time high that was achieved In early september and if you go beyond that we could be looking at heading up towards 3,600 Move to the downside might find some support from this blue line the fifth the moving average in a 3,404 And a move below that could find support from this area here the kind of the late Sorry the early october lows In around 3,341 and if you even go below that this area at 3,300 could act as support I talked about how the british pound is performing well this morning given that the UK government seemed to kind of think that you know the could water down the internal markets bill as a way of Getting a deal with the european union So therefore we've had a decent move to the upside in the british pound We could see here that The british pound hit a multi-month high in september that was the highest level seen since uh since december So we're talking just shy of it. You know just basically an eight and a half nine month high was achieved then We obviously had a move to the downside lower low lower high lower low But the last few weeks it has been pushing higher and the highs of mid september, you know, we're the highest seen Um, the highs of mid october were the highest seen in over a month We have come back back below the 50 moving average But we're going to appear to be kind of retesting at the moment If if we can get back above the metric in a one spot 30 15 We could be looking at targeting the highs of early october in a one spot 30 82 And if you go beyond that we could really get it up towards the kind of 130 132 area or up towards one spot 32 69 Move to the downside couldn't find support from this from this yellow line The one really moving average in a one spot 28 41 And even if you go below that we could find support for this red line the dirty moving average in a one spot 2709 and to be honest, it's only really if you take out the lows here in the um on the In late september in a one spot One spot 26 75 so really if you go below that Because that would be good. I think you know what kind of the broad upper trend on the last few months has come to an end Take a look now. What's going on with the euro versus the u.s. Dollar? so In early september the euro dollar hit its highest level in over two years So it was a kind of strong upper trend And then it hit, you know a multi-year high We had a fairly decent size correction into late september We've had a big kind of the bounce back the rebound were by the highs of early october where the highest seems is late september and We're comfortably comfortably above the lows of last week If you press on higher from here, we could be looking at retesting the fifthly moving average in a one spot 17 94 To take all that we could be looking at retesting the highs of early october in a one spot 18 31 And then if you go beyond that we could then be looking at targeting these highs here for mid mid september in round one spot 1917 and then if you go beyond that we then be looking at heading it back up towards 120 And then we then we could be looking at back towards multi-year highs Our support could come into play from this line here in a one spot 1684 We could see it on a few occasions this area this zone acted as support And even if you go below that support could could come into play from this area here that the late september lows in a one spot 16 12 Lastly coming on to commodities turning off a gold to be honest goes with a bit of uninteresting the last few sessions You know gold hit an all-time high in october sorry october in august and a major kind of Correction shortly afterwards and ever since then it's been kind of broadly trading a bit lower The last few last few weeks and months we've seen kind of you know a few kind of lower lows and lower highs but we can see here that even though The next this negative move has to put in the context of this phenomenal upward move so We've been sort of range bound the last few sessions, but we're still above 1900 and if you look recently even though We haven't seen it being in a pressing putting much in the Racking of many higher highs we can see that the lows are getting higher and and if you can hold above 1900s you know the broader upward trend is likely to continue if you press on higher from here We could be looking at retaking the 50 moving average at 1925 Notice how it acted nicely as support on a few occasions not too long ago So and if you take on that level we're going to be heading back up toward the highs of mid september in it 1976 sorry 1973 and if you go beyond that, you know the big psychological 2000 bucks mark with income into play If we if we drift a bit lower from here We could be likely heading back down towards the recent lows in around 1882 And a move below that could take us back toward this yellow line here The water they move the average at 1873 and then it's only really if you take out the more recent lows the lows registered in late september In at 1848, it's only really if you go below that because that would be good. I think you know what maybe we actually are in for for further losses And lastly, excuse me Lastly coming out to bring crude December contract on the oil market So the oil market is quite sensitive to perceptions of the the health of the global economy And obviously with the coronavirus crisis can still still raging Their concerns about, you know global demand, but you know, if you take a look at the price action It's had a massive rally from from late august from late april Into august where it hits its highest level Since since marsoons the crisis really kind of really kind of kicked in We've had quite a few aggressive moves to the downside, but notice we've been kind of pressing on higher We were well above the lows of early october at the same time. We haven't retaken the fifth and moving average It's blue line here So it seems to me that we're kind of a bit unsure of itself But the broader trend for the last few months It's still it's still to the upside if you can retake the fifth and moving average This which comes into play in a 43 spot 43 We could be looking heading up towards kind of 44 Up towards 44 spot 29 the highs of mid september And if you go beyond that because i've been looking at heading up towards 45 and then Move beyond that could take us up towards the highs registered in late august in around 46 spot 88 Up towards that zone On the downside moves lower from here could find some support from here in around 41 spot 22 And if you go below that 40 bucks a barrel, you know, because it's a big number Could act as support and if you do take out this level here the lows of early october In our 38 spot 79 then we get worried about the kind of then we could be good to think You know what? We are heading lower because we've had a lower low a lower high a lower low a lower high and potentially, you know A lower if you break out down here that'll be another lower low and that could signify the further losses around the cards And I should that be the case we can end like heading back down towards this area here in around 36 dollars per barrel That's all for me this week. Thank you for listening. Have a good training week and good luck All right