 Okay, very good morning. It's Thursday 13th of February, so I hope you're doing well Going to go over an update on the the virus because it did see a move overnight in the Asia Pacific market So I get up to speed of why that occurred what the latest status is in China Also, I'm gonna have a quick look at the euro and euro Swiss All right interesting chart that I saw someone putting around on Twitter On my way into work this morning. I thought I'd tied that into some euro discussion For the briefing and then also an update on the UK cabinet announcements that are going to be coming out a bit later on today Is that going to be meaningful or not for price? starting off though, let's have a look at the the charts and probably the most Clearly evident thing that you can see here is these two center charts the Nasdaq 100 and the S&P is I've got it here And you can see with the DAX this morning. It's just drifted lower in the European open When it comes to the S&P, you can see quite a sharp downtick that was seen Just before midnight if you were looking at London times, you can see this drop here and Why did that occur? Well, actually if you look at the other asset classes to see the general risk you can almost Connect the dots so equities blip down the US 10 year blipped up and grinded higher And then gold was bid and then started to move higher during the Asia Pacific session So very much almost a reversal of what we had yesterday. You remember in the briefing this time yesterday We were talking about the fewest number of reported cases of the corona virus in Hubei the province of China Which is kind of the epicenter of the virus outbreak It was the fewest reported cases in a month. However, this is the complete opposite movement And why has that happened? Well, what's come out overnight is the Hubei National Health Commission I've said it would now start including cases confirmed by clinical diagnosis Which refers to using CT imaging scans to diagnose patients alongside what was originally those confirmed by the existing method of Nucleic acid testing kits. So this has then seen a 15,000 Uplift in the number of people in reported cases. And so if we quickly flip over to this graphic now We've added another 200 or so to the death count and the total confirmed now is north of 60,000 so overnight You've had a bit of a risk-off move However, this morning. It's been a fairly tame European open this far My initial interpretation here is that don't forget we were trading up at record high levels when it comes to the likes of some of the US indices and If you actually put it into context the move that we've had when you start looking on a broader time frame of the likes of the S&P, I don't think it's quite time to Panic just yet. In fact, I think far from it and even if we did get a bit of a pullback We start moving further down. You know, there are plenty of Strong good levels. I think on any pullback in this S&P 500 and even if we did drop I think 10 20 points Again, I don't think that that's crisis mode on this virus And I think largely a lot of the market somewhat prepared which might explain why this move has been Relatively moderate at this point because a lot of people obviously were already Questioning the validity of the numbers that China were putting out and I think a move up a 15,000 doesn't really Break the mold of surprise too much. It's not like it's been lifted by 200,000 for example or 150,000 so at the moment I think that yes a little bit of a knock to prices You can see oil also just a touch lower But still up quite firmly from the the gains that we're seeing yesterday And so yeah, I'm not Not so sure that you're gonna get a continuation of this Throughout the session, but time will tell I think the better way is and without Not forcing your opinion Let's wait till the US come in because they wouldn't have seen this news yet And they won't till about 11 11 30 hour time when they start to come into much into the market and how do they perceive this situation? Will be quite key, but I I still kind of I'm looking at this that if we did see a concerted pullback I think for the equity players just more reason to get long again at this point The other chart that I just wanted to have a look at was Euro-dollar these are the headlines you're seeing this morning Euro slumping to its lower since 2017 with economic woes in focus And this is a graphic of the euro-dollar pair and usually you can see Having broken through that period of the kind of late summer Loads that we had in euro-dollar taking us all the way back down to here on the left-hand side from 2017 Now a lot of different things going on here a lot of the focus of course though has been on Germany as well as overall General weakness in European economic data risks around a no-deal disorderly Brexit still exist, of course Political stress is kind of like spin the wheel and pick your country in Europe from Italy to Spain now to What's happening in Ireland as well? There's lots of changes happening and uncertainties and political stalemates And then one of the key things as I just said is the German economy and that's been the one that's of particular interest just given its economic contribution to the euro area and This is going to come into even sharper focus tomorrow because tomorrow you get the German GDP figure Now this is a look at the report. I issued The macro menu piece that I deliver on a Monday and this is looking at German GDP quarter and quarter so Bloomberg Economics forecast is for a contraction in that figure and as you can see here It'd be the second contraction in three quarters for Germany And so you know that kind of engine room in Europe so to speak somewhat stalling and that you know manufacturing Contraction that we've been seeing for a period of time companies still relatively Unsure about the prospects of the economic future ongoing with some Internal domestic political stresses of their own and then throw in the threat of US tariffs as well Particularly on the automotive sector. It's almost like the perfect cocktail to weigh on Europe and yeah, expectations Gradually shifting is the guard going to have to do more in some fashion in in time And I think tomorrow's date is going to be quite key as well for that near-term direction of the of the euro euro Swiss this is one I did want to bring up and This is looking at euro Swiss over the last Well, you're looking at the last several years here, so eight or nine years and This is a this level at 120 is one that I know will Will remember very fondly. I remember that day because Actually at the time it was me and my brother who was sat on the analyst desk I remember we were just sat back. It was I remember it's kind of possibly late morning something like that There was no nothing major coming out So we'd be sitting back just chatting but we kind of half an eye watching all the the news wires and then a headline dropped and The SMB the Swiss National Bank dropped their currency floor and at that point I remember because you there was a period You can see here So if we look back to late 2014 you can see there was a period of months where we just sat at 120 and a very Common play at the time was anytime euro Swiss came down to 120 all these prop traders would just buy it Because it would be defended by the Swiss National Bank They would actively look to weaken their own currency and be an export nation You know if you think of Nestle swatch, these are the biggest companies in the Swiss SMI index and so what was happening was you'd hit 120 they would weaken their currency and you'd basically get a free 50 pips 25 pips every time so every time it hit the floor you just you just go long and it was Happening every time so you can imagine after this was happening for months and months and months and people were getting these free trades almost Everyone would load up soon as we hit 120 however, as you can tell then that the magnitude of longs at 120 was pretty massive and Rightly so because if the central bank it can defend it you got not there's no downside However, then this headline drops and remember us seeing it We kind of jumped out of our skins and it just said yes and be dropped their currency floor of 120 and that was the move that happened and it happened like bang like that and Good for us actually, you know, we saw it. We said it. We got it out there So fast that you know fortunately for people like will and this was pre-amplifier This was pre me working amplify That was his biggest ever trading day By a country mile because he was able to just be alerted to the news And that's the beauty of the squawk. I guess these unexpected black swan events Now now one of the things that was bad for me though is that some of you might remember the broker Al Pari Al Pari used to pay The company I used to work for a lot of money For our services and they went bust on that one single move And they were at the time one of the biggest brokers in Europe and because they weren't appropriately hedged for that move Completely wiped them out in in the matter of seconds, so it was pretty Pretty amazing and actually if mr. Al Pari is watching you still owe me a lot of money So because you didn't pay your fees because you went bankrupt But uh, but yeah Anyway, you know this move was was quite interesting and if you actually look at euro swiss From a technical perspective look where we got to in 2018 You know, this is kind of technical analysis 101 here when you're looking at this chart. We come right up to 120 Absolutely perfectly on that previous protection level that we had back in 2012 Protected again in 2014 the break came up to that level But interestingly look where we are right now now the swiss national bank don't have a an actual Verbalized flaw in play in this day and age However, just look where we are right now in euro swiss and by product then of euro weakness The swissie is strengthening and that's not good for the swiss Companies because as I said they're exporters and we're now down heavily from where we were when they were protecting before So what's quite interesting? I think from a longer term perspective here on this euro swiss chart is we're right on the tipping point And any further break down here Then yeah, it's going to be super interesting to see if we break through those 2016 Um and the 2017 levels, you know, where do we go to then? You know, does that open up a door to 104 102 this kind of price activity we had back down in 2015 And if if that euro dollar pair has now broken through that meaningful part in 2019 And that imparts more euro weakness and we start to get a bit of a technical break and a run here You know the euro swiss chart also looks quite quite appetizing As well at this point Okay, final thing on my side This requires no more than probably 30 seconds to explain because it's not going to be a market moving thing But just so you're aware when the headlines start dropping Boris Johnson the UK prime ministers to reshuffle the post-Brexit UK cabinet today So ministers expected to leave include culture secretary Nikki Morgan Stayed on as a temporary measure to oversee the review of the Huawei 5g network issue that the government's been going through in the last few weeks Probably one of the most recognized ones. Uh, you remember that kind of bellowing chap the attorney general Jeffrey Cox Um, he may be replaced and moved to another role Um People the whole reason why this isn't going to be market moving is the chancellor sigi javid the foreign secretary Dominic rab the cabinet office minister Michael gove the transport secretary grant chaps. They're all staying So nothing changes in terms of the the more Senior positions a lot of this is being tabled in the press as a move about equality more women in in more senior positions and so on so Looking at the pound though this morning It has seen a little bit of a blip up now I haven't seen anything specific Why that has happened a few people have been banding about the uk ricks house price balance data It did come out that come that data comes out very early in the morning And it showed a plus 17 reading in fact the highest since may of 2017 So again, like some of the other uk economic data points We've had a bit of a post election bounce on a bit of clarity at least short term Over the ability to pass then this brexit initial part into the implementation phase has just led to then the highest since Jan 2016 of vendor instructions that we've had So I don't think you know, I can't say that I've ever seen uk housing data You know apart from perhaps the depths of the financial crisis really move market So I think that's a little bit of trying to curve fit a bit of a reason I don't think there is one other than you know Sometimes you just got to go with the flow and it's moving higher It's come to a natural point of perhaps a bit of resistance on that r1 and that previous highest seen yesterday afternoon I don't I wouldn't read too much and over interpret that To be honest with you euro dollar that has been clawing a little higher as the dollar has just seen a bit of weakness as Europe has come into the market All right terms of the the session What have we got on the agenda? Very much more us focused Do keep a half an eye out for their iea monthly oil report But but I guess in a way the cat's out the bag somewhat because the opec report came out And obviously they've slashed their demand on just given the circumstance that is happening Globally at the moment and particularly China on the back of the virus And that seemingly didn't really move markets and the reason there because Pretty much as expected really It's not it's not that surprising So I'd expect pretty similar worth keeping an ear out for but maybe not that market moving More so I'd say from a bigger top level macro theme How did the us perceive this corona virus update to their methodology of numbers? And yes, it sounds pretty punchy on the numbers, but I actually think the market will will brush this off Is my my kind of baseline view Into the afternoon u.s cpi of course always important weekly jobless claims as well from a speaker's perspective Got a couple the chief economist of the ecb is speaking Lane at midday ecbs penetta at five remember now part of the The executive committee on ecb and then a few as others in the evening if you were to stick around late anyone in the u.s Feds williams speaking at new york bankers association. That'll be at 4 30 chicago time Any fixed income traders? You got about four to five billion euros worth of range of italian supply coming to market with 19 billion in a 30 year bond auction from the u.s treasury all right That is it. So wish you all good date And for the guys in stage two i'll be giving you a lecture on economic data a bit later on this morning Otherwise, I'll see you in the chat room. Thanks very much Yeah, hi guys. Hope uh overall well start off with the the pound as it's just Coming up to a relatively interesting level. They're not far from that 130 which we were talking about yesterday There's been a key line in the sand because you can see if we go back to and try and get this year in the picture The amount of times we we have previously found support Around this zone. We break through it come back. We test it. Yes, they sell us take over and look we're back there again So it's key Key point to to take into account if we get above there fine Let's get little person and start targeting some of the other breakdown areas around 130 20 As well in the futures, but for the moment first real test that this morning just coming off a touch But certainly the the balls will be liking the look of that If we can push through there to the downside when we do start thinking, you know, what This pound's going to start pushing lower again Or maybe if we can break through this trend line, which would be How I'd feel pretty confident, especially if it marks up along with the 129 56, which was the low you might be able to see it on my camera Low the 4th higher the 10th Then the high Of the morning of the 11th and the afternoon lows and yesterday's low as well. So key key zone there for the for cable and it's all but it reminds me of Of euro usd last year when everyone would get excited every single little push We'd have in euro and break a trend line and come all the way back low and making new low for What would be the year so for the pound if we get above, you know that 130 area, let's push on fine Can deal with that Continuing to push on a bit if we do come down and test this trend line A break without I feel we could get a bit of an unwind and obviously you've got some Half decent profit target targets near the the lows of the year there the euro That's what I might as well start on the weekly chart just to To say what every single person on twitter has said we are the lowest we've been For quite some time now. Let's just draw a horizontal line on that low. You can see here almost Looking to start filling the gap from You know macron the first round french elections. So we're talking april 2017 On the futures there. We we had last or we had traded there We actually did of course trade that in may as well a break of these lows You've got to start thinking about You know maybe a bit more momentum coming into the gap feel and of course Just get that on your charts because if it does push lower, you know You've got to have the the longer time frame on to see where that level support In theory could come in and you don't want to be caught out Selling just before it or not taking profit on it So have a quick look just how we're trading today Just having a little Push to the up so you've got a bit of dollar weakness Come in if we have a look at the the way this is traded, you know There'll certainly be people iron up the pivot as a level of resistance I think you're going to want to see a bit of price action Confirming that before wanting to get in short just considering how Clearly this trend has come and we've obviously hit a very important technical point And you can see 1802 is is roughly where that gap would be by the way So if we do get a push on with lower these lows the continuation strategy You know, isn't the worst idea in the world looking for something like this breakthrough Take it and then go in as well But the pivot key to the upside other than that you've also got I believe 10924 pretty well respected level on both yesterday and What they would that be Tuesday As well So the pivot first sort of real resistance point that the balls will want to take it over And then up towards 10924 can we really start pushing on and on and on Perhaps but I think you know the there's been a couple of times where people may have thought that's the case early to be dealt with A bit of reality as this market comes lower Again, but keep an eye as well if we do push on at any potential trend lines That's just been guiding price over the last few sessions But yeah, I think pivot just before the r1 Or the continuation strategy for shorts at the moment don't look too bad. Ozzy dollar Has had a decent, you know, little few days coming down overnight due to the the china Headlines, I agree with ant It's I mean it would be quite funny I think if stocks were to to find a medium term top last night On these these numbers which have kind of improved to be You know, not all they seem as if almost be the fake news Has as one against this market, but that said bringing it on to the Ozzy is this now an opportunity to get long Again, so there's a couple ways to have looked at, you know, you either you identified the That low from 67 11, which was a previous high really good level to be honest Just on a multiple days and you can see why we found support there So you're lying in the sand happy to stay long if it stays above that For example, if you're more medium term probably worth getting on a bit of a trend as well just below that Or if we have a look more Intra day the pivot today looks to be pretty key Most notably because you've got a couple of highs and there you got the low from yesterday We broke down there in early hours It's almost like we get above there Let's have a go at trying to get that double top from yesterday So pivot is key if that holds up if the pivot hold up in equity is fine We can drift back lower But I think for now if especially if we can have a bit of a bounce in the dollar To the upside of these pairs then above that pivot isn't a bad trade to to look for At all Let's have a quick look over to equities, which did come down in in that early trade really from Well, it's just after 11 wasn't it? 1145 1130 we pushed lower I was playing football last night and as usual can't sleep After I play so finish at 10 get home eat and then just Sit in bed wired trying to get back to sleep or get to sleep And and twitter was you know, it was it was talking about it But my no means was it you know really trying to get this to to go lower and lower and lower So I'm with ant and I don't necessarily think it's Going to be you know big selling opportunity That said you've got to prepare for both and if we have a quick look at some of these these levels I'm just going to make this a bit bigger you can see why we found support on the s1 area It was also a good level from Yesterday kind of similar time to where we're trading now if you get a breakthrough with that then you can start thinking about You know the market wants to come down to 33 53 51 the lows that we had back on Tuesday Also, we you know we found some resistance on this level previously And you got to go with the flow if you think you know what I like the idea of looking to to get long You can see we're starting to Kind of respect a bit of a trend here on the 15 minute hasn't quite made that one yet You've also got a couple lows in the mix hence why we're just finding a bit of resistance But a little break of of this As long as the volume seems to be there could be a little option Another key zone for it to get to is basically the pivot you can see we had some resistance there last night We broke obviously through it and came back down to back up to test it If you're bullish, you know, that's a that's an area I would say you want to want to consider it's a similar picture across the board the us equities You know it's a case of trade what you see not what you think I you know, I do think we we go higher But if we if we push below these lows or in the s&p then fine We can continue lower if we push below that low in the Dow Jones It's you know, you can see just how significant it is It's the high that we had back on Tuesday, Wednesday morning We broke through there just before the cash open We found support late last night and then now as well It's a key level below there You'd have a couple of stops from longs and people looking to to get a bit more excited about push down and you can see Just to reiterate the s&p trends. You can see that developing here On the Dow As well just obviously make sure you get that as as good as possible quick look at gold which you would have expected overnight would have pushed higher and it did Just starting to find a bit of resistance around the dr1 I'm just going to put this on a 60 minute because you can see just the significance of this area in general um Let's just go back here. What we look in the 10th overnight on the 9th 1580 Quite an important zone that you would want to consider to the downside if we were to push lower When would you get excited about, you know, this maybe correcting itself? I would say this this point here 15 75s the higher the overnight Initial push and then support As that came through that would be something you'd look at and as well, you know with these kind of moves if you do Like with the s&p start developing some kind of trend the way gold can move on breaks of these trends Can lead to faster moves Higher or lower so to keep a watch on that and of course mark up any levels To the downside As well for potential supports above if we do get that push and equities, you know Do want to come under pressure or there's following Following up with these numbers that maybe make it do make it do make it seem worse than it perhaps is Obviously just be aware of all of this resistance around here from those What we're talking here the third the beginning of the month the second As well, but for now, I think this resistance level should hold for the morning It'll be interesting to see what happens at 15 75 oil to wrap it before quick look over at the the dax Had a nice day yesterday It had a nice day nice little push those lows just starting to seem a bit distant. However, obviously overnight Back to reality for for oil. So those that are long it's not going to be straightforward move up, of course And we've just started to to find a bit of a floor perhaps here. You got You know, what was the previous high we almost came back to test it late yesterday It's a zone, you know, whether you want to call it down to 82 to kind of where we're trading now I think if that goes then, you know, the situation elsewhere is it's going to be worse and we can find drift lower But if you're bullish oil, you know, these dips like you've seen in Aussie like you've seen in equities There's opportunities perhaps to get long along obviously if it suits your Your trade that you're looking at I was You know just possibly thinking about You know getting in more medium term adding to a position on oil if we get above this 52 area And we didn't quite do it. Yes. I know it's a headline the reason for it, but you can see Here if I just draw and again, I like a zone here You've got the low that we had back on the 27th got choppy But we found support on the 30 before breaking through a day later Resistance on the third the fifth overnight 6th and then yesterday as well It's to start into a former range. Are we drifting back lower to test the lower the year? Or do we get a nice little break forward and actually We're now looking towards the next key point around 55s. Maybe Time will tell of course on that one. So we look at the Dax couple of You know big pushes lower in early trade before the open buck after eight o'clock last 30 minutes Is you know relatively choppy you have to say Your line in the sand to the upside just like the s&p may well be is the pivot good support Yes, they good support overnight. We broke through have we found resistance yet not quite So that will be the key level for me However, you know just be aware of the euro was to you know, you know strengthen massively that might just Hold this back a bit To the downside Really the the low so a lot of equities finding support technically on really what was the next level and for me That's a you know a sign that if it was to be a bigger move We would clean them out quite quite quickly. So yes, it's a way to see you've got your lines in the sand If you're not in a trade now for example for me The Dax is if we can get above the pivot to go long below these levels and you'd want a nice close Then fine. We could we could drift lower but other than that I think it's a wait and see The euro just trying to push up to keep an eye on that pivot But like I said, I wouldn't necessarily have orders waiting to go short just yet Want a bit more confirmation on that hope you all have a good trading day We'll catch you in the chat and any questions, of course, please do let us know