 Okay, very good morning Anthony here Amplify Trading. It's Tuesday 12th of May I am the head of market analysis and I'm here to give you a bit of a fundamental update about the new stories in play this morning And so if you have any questions at all feel free to leave a comment on the video Don't forget to like and subscribe and also check out the AmplifyTrading.com website for those who want more information But looking at the charts this morning as you can see a couple of different things To talk about first of all the overall kind of sentiment as we go into the European session and it's a slight risk of Kind of mood to proceedings. We've got US index futures down marginally the DAX futures down about 63 at the moment Consequently gold and T-notes up five dollars and five ticks respectively in the currency markets Dixie's pretty flat actually and despite some of the movement that was seen in the overnight session You're a dollar breaking the range load from yesterday afternoon and late US session To dip overnight it has recovered that move a lot of the currency movement overnight inspired by a dip in the Australian dollar However, we'll look at that in more detail as to the reasons why and also the fact that the currency has recovered for the moment But a quick look at some of these charts. There's a few interesting technical levels I just wanted to look at before we begin the the run-through of the major headlines in the morning And I was looking at gold a trend line that The master of all trend lines Sam Norse was was looking at last week I just saw this morning was still being quite well respected here at the moment and Obviously just given the equity performance of late being fairly choppy but as I'm going to discuss There's quite a lot of kind of more negative developments, perhaps on the table Just generally domestic demand pretty weak in some Chinese data overnight you've got some potential secondary outbreaks in the likes of China in Wuhan the epicenter of the actual origination of the virus or believed to be and also in South Korea and So a few other things here on the table and a quite a bearish call as well once again coming out of GS On the S&P so worth keeping an eye on Obviously, all of those things would you would help help elevate the price of gold But from a longer term perspective a few things to watch out for here for one a pretty decent level here if I just mark up These with an ellipse the pivot level today does encapsulate a little bit of that Late us push up that we had before the Asian session commenced and we actually moved back down to that trend line That also brings in the morning European entrance To yesterday session on Monday, so the pivot level quite a near-term level of support to keep an eye on obviously You've got the 1700 level residing just below in the futures market But if we did break any lower and you do have that overnight Asia Pacific low that generally coinciding with that low That was seen yesterday afternoon, and this is that trend line going all the way back to what the 23rd of April multiple tests on that level So it's a pretty solid one and something to be keeping on as we go through the session ahead for sure Elsewhere the equity market and the S&P Equally so quite technical at the moment the the chart really reflecting what I feel is quite a bit of indecision We did have payrolls and obviously post payrolls are actually ramped up into the closing Wall Street Then when yesterday session commenced in Europe came in we sold off only to then bounce back higher Equity is a bit of a mess from a directional point of view So with that being said we are forming some quite key levels here to the downside as I've got marked up You've got the overnight late Asia Pacific low that also comes sides with yesterday afternoon Wall Street the initial volatility at The open and also the high that we had on Thursday evening session Any breach through that then opens up the s1 on the daily pivots the pride days low and also the high in resistance that was seen Constricting the price action back on the 5th of this month So definitely some key downside levels there to keep an eye on and the S&P today any breach below there Certainly does open up potentially room for a bit of a deeper move pushing to the downside Towards kind of 67 70 type region So keeping an eye on that as well and then finally an oil oil was an interesting one yesterday This was a tweet that I put out At the time of which as you can see by this big green wick oil was shooting higher and it broke out of quite a key Topside range that we had been seeing around 26 30 in the July future We broke above that and then this is what I was describing to some of the new traders that often when you get this kind of news Catalyst and you get this what I call a fast money or move the market jumps up and people jump on the headline But they want to exit that position. It's kind of you know speculation. It's pure sense And the exit point often does coincide with these logical kind of lines in the sand I eat the pivot points given that they're a mathematical calculation from the prior days Obviously price movement and so everyone's got the same levels marked up and you can see that Working pretty much to the tick around that point and the price started to back off and just given the area there of the R1 And here you've got that that low point that was seen on the 7th and the high on the 5th Just thought that was quite a good technical area of resistance But then if you actually look at the the actual headline itself what happened was Saudi Aramco So it would reduce its crude oil production for the upcoming months of June by an extra Voluntary amount of 1 million brows per day now the idea here was that they're looking to be overly compliant and in the hope that they kind of set the Example and that the other OPEC plus nations plus G20 energy producers follow suit Now I get that for logic But the problem would be in my mind that fundamentally the OPEC have always over-compliant They've always shouldered the burden of OPEC and so them doing that I don't think necessarily translates into others following suit because as well when you look at the necessity for Saudi to take action Then you know it really is very important to them and actually one thing I saw this morning Aramco's Q1 results are out today Little bit fishy right they over commit to cutting the supply situation a little bit more obviously Technically that should squeeze the price higher the day before their Q1 results come up I mean I know that's not going to impact the underlying numbers But it certainly helps the sentiment when now they have a listed company Of course and the price of all is is going to have a translation overall over a period of time The reflection the value of that company so here for me fundamentally I thought the headline after the spike was a little bit weak I think perhaps a little bit of over interpretation people just jumping and hitting that headline with the technical area And if I flip back to the crew chart You know that kind of played out Which obviously when you're making these types of calls is so was it a pleasant thing to see and hopefully some of You guys got a hold of that and we hit that area of congestion if you like of resistance And then we back to all the way down and we actually came down towards the lower end of the range You know so a decent about turn when it came all the way back down to the load that was seen Going all about to Friday midday, you know, so we're talking about a $2 move there over at the reversal in the course of Only a matter of three or four hours. So yeah all in all though going forward that headline Doesn't mean a lot now I don't think so and I think the replies reflects that we're back in that range for the time being so for now Unless we break above really this 26 30 Area or on the downside really this zone I've got kind of marked up here between what is the S1 today around 2450 to 2480 Then I'm not really too interested at this point in time. All right playing your headlines for me to get you through So let's jump back to that And off as I said before any questions, just let me know with a comment absolutely happy to to engage and help As in when I can so with the overnight session a few things to be aware of in China their Factory deflation deepened in April as consumer price gains have slowed So let me just run you through some of the numbers here PPI number came at 3.1% that was against expected 2.5 CPI came in at 3.3% We can and expected 3.7 So the falling consumer and producer prices inflation reflects weak demand both at home domestically But also obviously abroad just given the ramifications of the lockdowns and significant impact that's having across the globe And obviously it's putting further pressure on policy makers to look for more options So definitely worth keeping an eye out for anything further in the overnight sessions from the PBOC Consume inflation continues to fall on easing food prices Factory deflation to persist on weak demand and oil prices So certainly not out of the woods yet for China and importantly quite interesting development overnight is in Wuhan There's been a new outbreak and the city of 11 million population are going to be Tested the entire city in order to try to get on top of that potentials second wave That's not it though in China. There's a few things else going on So here's just a quick graphic of those drop-offs that you can see in the PPI and the PPI So again any kind of bounce that we've had more recently in Chinese data Still decidedly short-lived again the reality of the recovery from the situation going to be much more gradual than this V-shaped belief that was kind of apparent just a few months ago and Certainly not just a domestic but a global situation is going to impede the speed of recovery for China The other thing was Renewed tensions obviously on the trade war front We knew this was going to be a key theme for this week and it will continue to be so There's a few conflicting headlines, but let me just give you what is out there as of this morning That's brand new the Trump administration moved on Monday night to block investments in Chinese stocks by a government retirement savings fund This is what this headline is here at the moment and this obviously has increased or reignited tensions between the countries However, what happened this morning was the Chinese Finance Ministry of released a second list of tariff waivers for some US goods Exemptions will last from one year starting from May 19th This follows reports that Chinese officials were considering invalidating phase one of the trade deal or Negotiating a new one tilted more in favor of the Chinese side. So Again, just to surmise here a few things that have happened China have basically released a secondary lifts of tariff waivers for the US That's a good thing for the trade deal situation. It's a positive step. However, this comes after a Kind of almost like a knee-jerk response to some undisclosed Officials reportedly saying that they were considering kind of reneging on the deal So China perhaps forced that to come out and say something but also as well US putting the pressure on by cutting off saving fund investment in Chinese stocks That's not it though. There's other things China is stepping up purchases of soybeans We know this is particularly key for a lot of those US states like Iowa for example And these are specifically important for The political success of Donald Trump, of course, given that these are kind of deep red Republican states And obviously they've felt the brunt of this trade war even before this whole pandemic was kicking off so They've stepped up purchases China of soybeans from the US as Brazilian sales start to wane Brazil being the second largest supplier of soybeans As the two look to kind of continue to meet these pledges that would Make up the phase one of the deal. So there's lots of kind of jostling here politically Trump China Obviously remain the aggressor trying to keep that political perceptions strong That he's got the pressure down on on China forcing them then to commit to this phase one deal whether through soybeans Weather through secondary lists of terrorist wave waivers But again, it's quite messy at the moment and you remember that kind of trade war infinity loop It kind of feels like we're in that a little bit And I would be looking to these types of headlines when you come in every morning to try and piece together What you think general sentiment is and definitely as I will be doing and sharing with our traders I'll be keeping a close eye on Donald Trump's general daily agenda To try and almost front-run anticipate when it is that he could potentially say something You know where he is and what time he speaks are definitely key components for the intraday market to be aware of the risk perspective And then as I mentioned There has been some updates on the COVID situation Wuhan their first new infections since the lockdown ended last month and they're going to retest basically the entire city That's not it though. South Korea reported a flare-up Due to basically people going to nightclubs in the South Korean Capital of Seoul they confirm cases around 54, but they've worked out that given the nightclub scene They anticipate that between late April and early May they could potentially have been six to seven thousand people exposed then to those who had the virus and so That's as we know when the initial Infection was in that acceleration phase. It only takes a very small outbreak to then Manifest and compound to we get start seeing you know numbers in the thousands So definitely that's made markets perhaps a little bit apprehensive not a great deal But definitely warrants monitoring and the other area of course is Russia. I'm not sure if you've really seen Russia If you remember when it's all was happening, there's really no mention of them at all However, if you look at the John Hopkins coronavirus monitor after the US Spain and the UK Which are the top three amounts of total confirmed cases Russia is now number four And they are now the new kind of emerging as the new hub of the outbreak In terms of the geographic location So there's definitely a few things here and obviously what everyone is watching of course is What's going to happen with the unwinding of of the stringency of these lockdowns across the globe? And obviously one of those is Boris Johnson, you know, he's had a real Backfire from the from the national media the business community about how vague he was with his speech the other day So, you know despite the bluff and bluster of someone like Boris who obviously can Deliver a good speech the problem was it was very short on the actual specifics where Businesses need to get back to work. You know a lot of this this was talking about the fact that you know He wants people to go to work, but he doesn't want people to use public transport He wants people to to go to work if they can but then don't go to work if there's not actual practices put in place by companies So it's all very messy at this point and few people pinning then a little bit of sterling weakness down to This this development and I think that's a little bit media just looking to pin something to fit the narrative But you know, this is the reality of it You know, it is the fact that it's going to be very gradual and I don't really read too much into it at this point All right back to China and Wuhan the other thing was this You might have seen this overnight and definitely if you're trading the Aussie currency, you know Part of your daily routine as an FX trader if you're trading Aussie is you need to look at the Chinese economic data the Chinese stories as much as you're looking at the Australian stories and overnight there's been information from both sides So just having a look here at the Aussie dollar first You can see quite a distinct downtick was seen overnight and we broke through some of those loads that were seen through yesterday's session However, the price has recovered Or be it just a few pips lower than where we were before some of this news headlines started coming out So I guess the question why the dip? Well, this is what happened overnight China has suspended meat imports from four Australian abattoirs It comes after the Australian PM called for an independent inquiry into the coronavirus outbreak So there's a few speculating that perhaps this is the Chinese retaliation. Look, you do not join This global chorus of looking to do an independent inquiry as to the origination and reasoning behind the outbreak of this virus You are one of our main trading partners if you want that to remain the case Then don't mess with us that generally is kind of the vibe of what some people are suggesting And why is this so important? Well, this suspension if it does take place will start on the 12th So as of today the four plants That they're talking about that China would suspend meat imports from in Australia They actually make up about 35% of all Australian beef Exports to China, you know, so this is significant Australia is also facing looming threats of major tariffs on it barley shipments to China as well So again got to be particularly vigilant in this type of thing. I remember Probably about 12 months ago. There was some downside moving in the Aussie on the back of China threatening I think it was coal imports at the time, which is another key Trading material between the two countries of which Australia depends on In that sense with China being their their biggest customer And so these are the ways and means of which China can really pull the strings where not only for the Aussie Is it looking a little bit precarious about the domestic situation in China? So we've just discussed with some of the things we're seeing the clients in PPI CPI another outbreak in Wuhan and so on The domestic situation obviously is going to impact the demand for imports from Australia But also then you're going to be impeded by the potential for you know this type of action as well So it's a double whammy in a negative sense here for potentially your Australian economy The other thing that's happening domestically in Australia is this business confidence conditions we can further as jobs slump so overnight you've had the Australian business Conditions index and basically this measures hiring sales and profits and it's slumped sharply overnight So business confidence you can see here came in at minus 34 from minus 22 in March So yeah, it you know business conditions that is business confidence even worse than that so certainly Things as in Australia shared as what we're seeing globally just under pressure immensely at the moment And hence the reason why the Aussie has dipped in the overnight session. However, as I said things have stabilized a little bit so Would I come in now and just start you know with a really heavily trying to hit the Aussie? No, I'd look for a strategic point. I think perhaps then from a Directional bias point of view you could anticipate that the currency might remain a little heavy Just having a quick look at the chart here I've not had a chance to really look at the Aussie too much this morning since I've Been looking at things. There's a couple of areas perhaps on the upside that could be quite interesting if it comes back up to these points Then just looking to play the move back down We shall see Okay, a few other final news stories then to cover off one is this Just going to switch over. This is Goldman Sachs and we know goldman's have been bearish on equities for a while They continue to kind of beat the drum this morning And this comes after a lot of indecision. Some of you guys were asking comments yesterday and That was on the the comment section on the video and you were saying that between Sam He's quite bullish me. I'm quite neutral eddie. He probably seen my colleague who drops videos in the weekend. He's quite bearish That's pretty much a fair reflection I think of the market and why there's this kind of uncommitted directional movement that we're seeing the S&P at the moment now I think that's a Fair view that's quite mixed at the moment in US equities We're looking at this yesterday is that kind of extreme V shape recovery that we've had that It's been way more sharper and faster than what we've seen ever before and when we've gone into a bear market You know, is that valid that move or is it just too fast too soon? And you know the the jury's out on that one, but what goldman's are saying here Is that they've worn the investors have gotten ahead of themselves and at the S&P 500 might drop Almost 20% in the next three months that actually said 18% as the headline as you can see So with that being said, let's just have a look where 18% would be in terms of where we're at at the moment So here's a daily continuation chart of the S&P 500 You've got the all-time height that was printed in February before really the corona pandemic started kicking off And you've got March 23rd is the low point before this big kind of Fed induced rally Couple with the fiscal injections coming Lifted the market back up in this incredible bounce that we've had now if we were to go 18% I've just put in the lips here Where the GS call would put us it put us back down to basically those 2018 lows that we had you remember Do you remember at the time? We were saying wow Q4 2018. That was a really memorable big sell-off and a dramatic recovery had a markets look how Weak that move now looks comparative to what we have had. I mean the the pandemic movement has You know overshadowed that Significantly, I mean the recovery in Q1 of 2019 was the strongest we had had in just over three decades But if you look at the trajectory of the recovery there in the S&P to what we've had now You know, there's so much more steep right now and the fall so much more violent But yeah, the GS call at 18% if that did materialized we put us down here now one couple of things that they're saying here Goldman's if I just quickly Transition back my screens. They said they they cited a lack of flattening in the US Infection curve outside of New York what promises to be a lengthy restart process a 50% hit to buybacks in 2020 and a risk of higher corporate taxes and de facto consumption taxes if US China trade tension starts to flare once again is their main reasoning so Again, I don't really put, you know all my eggs in one basket and just think well if Goldman says this and that's what's gonna Happen and obviously there's always that talk in the market about, you know, whatever Goldman says They're doing the opposite to get out of position and so on so forth, but I do like Understanding at least Generally when I read around these different bank calls Where is the general median consensus at because I think that's how you can better define then general market Positioning for a more medium term basis and at the moment. I'd say even though they've kind of stuck to their guns Let's see Certainly as I've always said over recent weeks for me the key catalyst, you know Even now you can throw in the trade war is a newer one that's become a quite clear and apparent danger to markets now but I still think the loosening which is done out of necessity to resuscitate these economies to get them back off the ground for the sake of the employment situation and the livelihood of people to get the economy is kickstarted there lies the danger of economies in the Unwinding of lockdown being missed to managed and leading to a significant second wave I still think that that period as I've said the next three four Weeks is going to be crucial to determine that and I see that still as the key risk or whether or not We push on up or we start to see a bit more of an aggressive reversal We shall see but again Wuhan South Korea Russia perhaps giving us an early glimpse of to what that might be like for Italy Spain France Germany and Germany you probably would have seen yesterday the are obviously that everyone talks about when above one And this coming after they had loosened the restrictions considerably and so week or two after the as expected Infection rate has gone up and this is what's going to be key to monitor going forward Final things the Fed says it will begin buying corporate debt ETFs on Tuesday This isn't new. They have said this was going to happen back in March the so-called secondary market corporate credit facility Bit of a mouthful, but they'll begin purchases of a legible Exchange-traded funds invested in corporate debt as of today Congress allocated just shy of five hundred billion Dollars in equity to backstop the Fed loans as part of more than two trillion dollar economic relief package passed in March Just to be aware of the other thing though That I thought was interesting was when I was talking the briefing yesterday A lot of the talk was about the movement at the end of last week where federal funds rates were indicative that we could be seeing negative interest rates in the US perhaps by the end of the year and throughout 2021 now that pricing has since changed and altered slightly and What's been interesting for me is obviously Jerome Powell's speech on Wednesday when he's going to talk about current economic Issues is a key speech could be a key moment for markets for this week And what's come out is a couple of the Fed speakers now these are non-voting members But nonetheless, I think they have set a bit of a precedent for perhaps then trying to manage the markets current kind of I guess Sensitivity to this issue. So what's happened is policymakers have said they're negative on negative rates Basically the Chicago Fed president Charles Evans and also feds Bostick have come out and they've both basically said they'll do whatever it takes We want to cushion the economy and help their recovery But there's only one thing that they won't do they will not take interest rates below zero now I think this is quite telling this is quite strategic if you actually look at the calendar for today And let's quickly jump to that you can see that not only were there two of the Fed speakers yesterday But there's another three more today now. This is quite typical of the Fed communication strategy Rather than wait for the for the main man the Fed chair power just to come out on the big stage and deliver this Just kind of bombshell. This is what we think the Fed are much more eloquent than that What they'll do is they'll drop him lots of different speakers from a variety of different views and voters and non-voters and Generally it builds up then when power delivers his speech to kind of pressures off And we're already pretty much pre-positioned and pretty aware of the the likelihood of what he's like to say And in this case then it really does ratify what we talked about in the macro menu and the briefing yesterday That he's like to push back on this notion of negative rates at least for now And continue to kind of push governments to do more on the fiscal side is probably the latest State of play we'll hear from power Wednesday, but today feds bullard Two o'clock Harker three o'clock Mester later on deceiving at 10 p.m. London time if you're still around at that point And that's pretty much it The other thing was on the calendar today then to look out for it's very quiet in this UK European Morning, so I think that's pretty much reflected in what we're seeing on the charts right now So a US centric session as I said a couple things keep an eye out for really President Trump what's what's his daily schedule? Where's he gonna be? What's the timings around that and then the other? I'm just trying to bring up that Journalist who is the chief of the global times in China and tends to act as the kind of mouthpiece In the Western world using the social media platform of Twitter of the Chinese government Definitely be keeping an eye on him as well Because he will be giving the latest kind of flavor of what's going on in their minds of Beijing in response to some of the latest Developments that we've had so trade wars continue monitoring of any new forms of outbreak as Coronavirus restrictions start to get lifted across various parts of the globe how severe are those ones that we've identified in Wuhan in South Korea? We'll be quite important as a litmus test given there's so much further forward ahead of the curve than we are in Western Europe and in the US And then waiting for the US session the main thing this afternoon and for that is you got CPI Coming out and that's pretty much the main data with the API for trees to aftermarket this evening at 9 30 p.m All right, that is it. I'll let you go. Have a good day and Remember to subscribe to the channel if you're not already done. So and I'll see you tomorrow. Thanks very much