 Okay, very good morning to you. It is Thursday 6th of February and just having an update then for what's going on in markets at the moment and if you were looking at the Positions from yesterday and an equity markets in particular then definitely a continuation from where we left off on the close on Wall Street in Asia Adding to that the S&P and NASDAQ 100 closing at a record high so I have seen Sam He's been parading around the office with his 30,000 thou hat We're only about 560 points away from that at the moment So that does seem a sense of inevitability about hitting that point in time as you can see to me here's the the graphic of the the S&P 500 so that initial coronavirus outbreak fear that they Kind of the market had to grapple with for the last week and a half or so completely taken back As we have been discussing throughout a lot of our briefings Although the situation numbers as we'll look at in a second are still going up at the moment still seemingly seen as a contained Situation I did actually see some of the mortality rates Outside of Wuhan or the area of Hubei and the mortality rate is about zero point one six percent As long as those numbers like that remain at those lower levels I think the market will continue to kind of brush it aside to some degree and then you've had good Econite data coming out the US Trump is loving life again because he's now the impeachment trial has finished and so Yeah markets on the the front foot again this morning So the DAX playing a little bit catch-up they reopened up about a hundred and seven points this morning US index futures have just added on to the gains and there's a few other positive signs from China being to look into kind of issue an olive branch by reciprocating US tariff decreases on Valentine's Day of all days and that scene then There's another potential positive catalyst for markets. So At the moment though, you know, let's not forget that you know yesterday. We're at now record territory. So You know, you kind of you want to be kind of late to the party and just thinking right blindly this markets now one dimensional You know, it's lifted for those reasons. I've mentioned, you know We're looking now for any further catalysts and certainly there could be some to come there's not so much in the way of Major US data today, but obviously non-farm payrolls just around the corner now that's coming out in tomorrow's Sessions, so just have a quick look at the other charts W2I crude also following suit with some of the renewed risk appetite the MSCI index of world stocks So a combination of all geographic regions has now been up for four straight days Asian Indices including Japan Hong Kong and South Korea up more than 2% overnight and so again this kind of bounce back from particularly when we reopened on Chinese mainland markets on Monday It just continues to be to be clawed back in that region So elsewhere the US 10 year as you would imagine a little lower than about five and a half ticks gold Bucking the trend slightly. It's had a slight uptick over the last couple of hours But basically flat on the session and in the currency space. We've just had a little bit of volatility in the euro It's very fleeting momentarily. I think Perhaps people getting a little bit excited by some of the initial comments here from Christine Lagarde The first comment that came out that actually bumped it up higher just a couple minutes ago Was she said low rates and low inflation the environment has reduced the scope for policy easing And that is a quite clear hawkish comment However, now the other comments come out the eurozone economy continues to require support from monetary policy And some other more level kind of comments to just nip that little hawkish initial comment in the bud So a little bit of a blip higher, but then has reversed course just now But she's continuing to speak so I'll monitor the comments as I'm delivering this briefing otherwise Let's get into stuck into some other headlines and this was the the Chinese headlines that I was looking at China to halve tariffs on 75 billion Dollars worth of US goods from February 14th the reduction timed With to or to coincide with phase one moves by the US So again that idea that these are reciprocal in that sense to satisfy part of the interim trade deal So this is seen by markets as a bit of an added reasoning for why we we saw the lift Going through the Asian session from overnight in terms of those numbers Where do we reside at the moment is? Total confirmed case is now to just over 28,000 total desk 565 total recovered now Just over 1200. I just got a question here actually on the chat So how bad do the virus numbers need to get before it causes serious negative reaction in US and European stocks? Okay? I would say It's more about the Well, there's two ways of looking at this One I would say one at the moment the market is kind of looking at coronavirus and and kind of almost dismissing it Hence the reason why we're seeing the type of asset class movement We have at the moment But it's kind of two things that I'd be monitoring quite closely for one And this is something that JP Morgan said in a research note yesterday. They said any reacceleration in coronavirus cases and the thing that they're looking at here as a result of factories Reopening don't forget in Wuhan. That's a major Manufacturing city in mainland China a lot of car auto manufacturing for example. It's a large populace area It's on complete lockdown. You've probably seen the images. There's just no one the streets have deserted But at some point then that city has to reopen if it doesn't think of the risk then well That's a major Manufacturing center of China for its exports and so there's going to be a consequence on the Chinese economy And if that happens to a more severe degree than what markets are expecting There's a gross slowdown that can reverberate across the global economy. So there's there's dual risks here for China they reopen the factory too soon and then you see Recontamination from the human to human transmission as people get to move around again by reopening facilities or you wait too long and that has a increased compounding effect on the economic slowdown from being on a complete lockdown as a as a quite a large geographic area, so that's Detail risk if you like at the moment markets not looking at that, but that could quickly come into sharper focus should the Lockdown go into an extended protracted phase or once they return to work Do we start to see it and a re-acceleration? Into almost exponential growth again of the total confirmed cases and subsequently the number of deaths at that point The other second point then is about monitoring of these numbers Outside of mainland China at the moment. They're incredibly small. You know, I think if you look at the numbers, I mean, it's pretty much 99% of all cases are in China and of that nearly all of them are in Hubei as the area of the deaths almost 549 of the 565 come from that one single area where the apparent origination in the city of Wuhan so Unless those outside areas also start to move higher of which to be honest have been very slow Then again, I don't see that as a risk as far as markets are concerned So yeah, Ian, I hope that answers your question A couple of things for sure, you know, I'm not looking at this as in The the coronavirus is now a non-issue leave it behind I think yeah, you've got to look at you can look at that in terms of the intraday shorter term environment But there's still our risks and there's still things to look out for Another key thing that moved the markets. Obviously yesterday was this talk about a vaccine I've done a little bit more reading around that and My overall interpretation is that, you know markets got awfully excited About a snap headline on Chinese TV talking about a research team and the Chinese University had kind of cracked a Similar drug that can be used as a vaccine, but from what I've read earlier this morning Any type of vaccine to come to market to be used in reality Would be months away Generally speaking then experimental drugs take much longer And I think the average time frame in China for that type of situation Even in a fast-track process is about 640 days So you're looking at two years to bring a vaccine to market in the best case That's that's almost halved in terms of in the US. It's about 400 low 400 day time frame for Europe and so that the idea or notion that they've just Cracked the code so to speak and they can roll it out. I think is wishful thinking so The key thing here I think from an intraday trading point of view You saw how sensitive markets were to that news in circulation yesterday and two things I want you to take away from that one is where the news comes from So you can see if you're a new trader the clear difference in the way markets react to a Bloomberg headline Comparative to a headline from an alternate source that takes a bit of time to gain traction And then markets start to kind of build up into a move rather than a major Financial news wire of snapping a headline and that initial knee jerk reaction you get So there's a difference in the way of which the dissemination of news plays out into the actual market price And then secondly looking out for then confirmation of the major authorities and what do they have to say? Remember the World Health Organization came out pretty much shortly after and said look This isn't this isn't the case. There is no vaccine as far as they're concerned from an official basis So whenever you do get that kind of rumor mongering almost and it does move markets Always think one step ahead then if you're in that trade then great If you if you are quite aggressive and you followed that momentum order flow going through the market But I would suggest being quite Proactive in management of that trade because inevitably you get a response official rebuttal which often then Can reverse the move? So there's ways it means to manage that kind of headline training environment Michael. Thank you So it's a statistic just to finish off this discussion here on the virus the SARS vaccine took about 20 months 2020 so again in fitting with the rough kind of time frames that we were just discussing So the idea I think of a magic silver bullet to come and save the world from Coronavirus I think is a little bit far off in terms of the practicality of that All right move on other headlines because I want Sam to come on and do his his technical rap The Senate acquits Trump. I don't think I need to talk about this very much This is completely as expected. This hasn't had any ramification Don't don't be fooled by the fact that the markets are seeing this as a as a net positive. He was never Not going to be acquitted. We've discussed this many times over the last few months Rather than this looking at it that way. I prefer to look at it more as what does this mean for? His popularity. It's almost vindication, you know for Donald Trump I don't know if you've looked at his tweets, but I'm sure you're gonna hear a lot more of his tweets coming up He's obviously absolutely laying into Mitt Romney who was the one Republican who stood against the president and convicted him of one of the charges of the two that were on the table But overall I think You know, this was a disaster from the Democrat Democrats. I just don't know why they even bothered for me it's almost that kind of That mantra of you know, if you strike me down you only make me stronger Any Star Wars fans will get the reference the idea of being here that this just makes him more appealing I think it makes it even more believable that he can spin the witch hunt narrative And get away with it. And so now he's almost bulletproof. You've tried you failed miserably I think it's just pretty tragic on behalf of the opposing party and that's not me being Talking up Trump. I just think that they've shocked themselves in the foot there Because it was never going to happen in the first place. So Yeah, completely as expected. They're not gonna talk about it anymore The story that I do think is a little bit more interesting as this one that's talking about OPEC plus now They've gone into an unprecedented third day of Their technical meetings now. These are technical meetings. This is supposed to be basically catch up You know, all these all ministers catch up They talk about their adherence to the quotas as part of the the supply-cut agreement But look, I mean, this is the oil chart that we've looked at. I've just kept it the way it was yesterday But oil prices have now bounced from roughly a 40 low $49 mark And we're up to this morning 51 73 So we continue to bounce a decent amount in crude oil now. We've talked about the How key this area is As a pivotal point and the reason why then as a trigger OPEC are feeling that they need to start ramping up the verbal intervention but you know, one of my takes from this and you know, perhaps I'm just thinking about it too much, but I Think part of the strategy here from OPEC is I don't think they're serious in reducing output This is this is this seems quite clear if actually read the source reports. There's a lot of Disagreement between the two major powers that be which is Saudi Arabia and Russia Saudi quite willing to step in and deepen the supply cuts Russia not yet and without those two agreeing Nothing's gonna happen because Russia obviously is a bigger oil producer than Saudi Arabia One doesn't agree. Well, then any cuts are for nothing now here I actually think by extending this into a third day What they're trying to do is if you step out of the oil market have a rethink about what's happening right now You know, the market is responding in a very positive fashion It's continuing to price out risks in the short term of the coronavirus US economic data has been phenomenal from ISM Manufacturing non manufacturing factory orders ADP was really strong You know, all of those things are good for demand So if demand was knocked by a loss of consumption from China being the biggest importer Prices have come back down. I think the strategy here for OPEC pluses will look let's just extend this meeting Let's appear to the market like we're thinking of doing something all the time all of these external factors are playing positive for price and if we Continue to say we're talking People will be very reticent to be sat in a short position just in case the tail risk we pulled the trigger and cut supply and so price is naturally are gonna bounce and You know with all those things coming together. I think it's a pretty prudent play if they do this Oil prices have stabilized and if they can see off this week and coronavirus continues to kind of Deescalate almost as an issue I think they've got away with it and they've got away with it without firing any bullets that what I mean by that is using actual physical reduction of supply of crude oil which is a kind of a last resort if you see what I mean You do not want to give the market at every time it challenges you by bumping the price down You cut because what will happen is the price will keep coming down unless you cut cut cut cut cut And then you're gonna be back in a corner and nowhere else to go then but deliver every single time You do not want to be at the beck and call of the market You know, it's exactly the same kind of strategies that central banks would do the way that they communicate is what these oil ministers will Be thinking I'm absolutely sure of it So yeah, that's my kind of take with the oil side of things So perhaps then those key levels are gonna hold out to see off the week Particularly if that payroll data comes out strong and the market holds up here in the equity space I don't see any reason why for the moment then We should push back down lower in the crude market at least for the moment final headlines We did have German factory orders this morning. They actually came in at minus 2.1% and actually that was considerably weaker than expected and you can see here German factory orders are down the most in a decade in the month of December now You know Euro if you looked at it this morning when this data came out The data came out 7 a.m. This morning. It didn't really blink. I think a lot of that is well If you look on 2018 2019 performance, yes statistically speaking, this is the worst German factory orders in a long time However, it doesn't really detract from the general contraction of that area of their economy So it's not massively surprising But we had that little bump up from Christine Lagarde's a short while ago You know this this certainly might put a cap on any of that Acceleration in the euro and at the moment I still remain fairly bearish on the euro dollar pair just given how the positive fundamentals are stacking up at the moment for the dollar and So, you know if you're looking at the divergence of fundamentals here Not to say the market has seen an immediate reaction to German factory orders But they are weak and it does ratify the current stance of the biggest economy in Europe is Is in a state of weakness right now and on the flip side America apparently is on fire right now as far as the latest data is concerned now that Divergence gives a nice fundamental directional bias for for the euro and trend-wise that has been heading Lower as well for some time Final things earnings. There's a couple of major French companies reporting some of the biggest in fact of their Of the index in a catcoron and some other earnings to be aware of so total their opening price They were up about 2.4 percent Sinoffia were up about 2.2 percent So total beating estimates on rising oil and gas output Sinoffi sees profit rising in 2020 So positive earnings as well in Europe to boot and these aren't small firms Sinoffian total are two of the biggest companies in Europe You've also had Arsalaam et al Dutch listed up about 10 percent unit credit in Italy up 5 percent So there's a couple of other things to be aware of here as well Okay, quick final look and if I give Sam the nod to come over now Because I'll be done in about 60 seconds You've got this morning in terms of data, it's pretty quiet in the US though Nothing really major coming out from a data perspective again non farms is tomorrow So perhaps the market starts to fade Into the latter part of the the US session and the typical kind of Friday morning quiet period ahead of the job data But speakers wise is a few things Lagarde has been speaking You've got de Gwendoz her kind of second in command also speaking a bit later. I believe separate events the EU trade commissioner Paul Hogan speaking at 10. That's obviously Mild interest just given now that negotiations are underway between Obviously Britain and Europe. I'm not expecting really anything concrete to come out here But nonetheless, he is an important person to monitor going forward over the coming months And then feds cap plan later on this afternoon any fixed-income traders you have supply coming out from the Tresor and to sorrow So Spanish and French supply quite a lot coming to market this morning for any boom traders All right, that is it from me hand you over to Sam. Wish you a good day ahead so much guys Yeah, hi guys. Happy Thursday. We're all doing well. Have good evenings So a quick look over where I guess there's only one place to start and let me just find the mouse Which I've seen to have lost now I've got it SP Dow Jones Nasdaq all finishing higher higher higher Let's have a quick look at the old daily chart to just put things into perspective. Why are you selling this market? It just does not want to come down trading 3350 at the moment and Believable really when we look at it. So if we go in on with this is going to continue Well, you want to be looking to buy some dips. Yes, we had a decent push higher We came back into near those lows That you'll be seeing me wearing this very very soon. You can get these from all online retailers The Dow 30,000 hat, you know what that's coming on soon Well, maybe maybe by next week, maybe well if we have a couple days like we did recently But let's have a look at potential opportunities to get in again, you know yesterday The the nasdaq came down quite aggressively Which I was going to bring into picture and gave that opportunity on those loads of the day incredible really And it was that low that ignited the others to to all go as well So keep an eye because you know the way these you know markets can connect is they they just need that Further push to to go on and it can drift in the European session So the nasdaq on that high you can see we just touch that again You're also starting to develop a bit of a trend line from the lows of yesterday If that is to break through then it could be that we just come down a bit Before that final push, but I like the idea of around the the pivot for the nasdaq I don't even think you know, it's against the realms that we can get there Before a push higher at the Dow Jones. I would like it a bit lower as well Looking at those previous highs for opportunities to get in. It's just whether we can have that that to That retracement to go from it. It might be that into the the US session We just have what we had yesterday and that once those highs break You can see here lovely trade in the Dow whether you wanted to get in Aggressively on the break of it or you wanted the classic. It's pretty one directional since then The S&P very similar breaking the high coming back. Yes, you're offside for a touch But in reality this whole move started once We get to get the trend Once we broke through those highs and where was the low of the evening you guessed it right back on that trend line So it's lovely opportunities. Yes, they when it's broken through so Yes, there could be a course a down day and there could be further developments for this Coronavirus, but we're on all-time highs And I think it's just one of those ones where people have almost forgotten about it And we are looking to look for long small people are going into it So just be careful when when going short be vigilant to take profits as when the euro It's interesting. You know, we were just talking before We started the briefing this morning about that pivot. That's a good place to get sure it didn't quite get there, but I Think it you know a tick or two and we're now back down to Down to the lows And of course you've got quite a lot of support here If we were to break through though, it could get relatively ugly and I know there's the Different levels that people are talking about loads of September October i.e. 2019 here as well So the daily closes are going to be key if you're a euro ball Do you like it enough? I think you probably want to see it's a bullish price action around these lows before looking to get in a break of that trend just be aware of certainly on the futures anyway the low than November and then Down to these August lows as well It's could get ugly if that goes and the pounds yesterday fair play to the bulls They're defending that trend line like and that area support like their life depends on it Just doesn't want to close below incredible level support here But same thing if you're gonna get some dollar strength and of course we're at highs at the moment or near enough This market has to push lower as well. And then you could see the opportunity to 128 Could could come through just have a quick look into a day just at the pound, which is just Just Well, it's choppy around those lows decision time. I think the the pound will come if Later later today, perhaps we are getting squeezed from the bottom So just keep an eye on that trend line if that goes if that area goes and fine look for that short From a maybe a line in the sand bullish perspective above the pivot is key yesterday's lows You've got some decent price action there from Tuesday Then yesterday evening the pivot one above 130 22 a little relief rally towards 130 50 is not out the question So those zones that I be keeping an eye obviously longer term for the pound there as well But this trend line near the near enough below the day The pivot and then up at 130 56 would be my levels to focus on their gold It's coming back a bit You know fair play to the gold bulls We broke a key trend line and I wonder if the the bears are just waiting for that to come back into play here You can see I'll just move out my camera just now I've got it on but you can see it's going back here to the low the 14th the 21st and then a Couple of days ago that break led to a nice move lower But do we just need to come back to a better area for this overall short to come back into play? And especially if stocks continue to push on maybe this is the you know nice little opportunity You've got that retest of the trend line You've got yesterday's highs as potential place and then the low around here other key levels that if you do like the short I think Patience but that isn't The worst idea in the world. So a quick look at maybe some fibs It's going that high of that move You got the 38 to around 1561. Yeah, I think it's short around there It's not a bad little trade to have interestingly though just on a more shorter term view than that We have broken through this nice trend which was respected all through yesterday And then hence that decent push that you've had here speaking of trend line breaks Over the last few days, of course oil has been continuing it's drift lower We had a the trend channel that broke it got quite ugly there, but just having a look Is it from here You can see that push through late last night in in oil You're just coming back to an area where it could retest and the gold oil balls I should say we'll be looking to defend that trend line because we do get back underneath it You know, it could be Look the queue to get short again back to those lows, which I know some people do believe are still gonna come into play Also, just get this trend line on I would say from yesterday's low for oil and If you're looking for a safer opportunity, maybe the short on the break of that Could be the one to be looking for European stocks this morning and stocks in general pushing to their highs It's finding a bit of resistance Which from an opportunity to go long Later on in the day are not too worried about it's just trying to pick those those points But yesterday what we saw I know it's late into the session when all these highs broke and even here in the backs breaks through comes back and You're not offside at all. So patience For sure is is a virtue in these markets and even if it does keep pushing Just believe that there will be that opportunity to get back in again as usual any questions Please do let us know euro currently on that low of the day testing it for the Well on the hourly chart 30 minute chart third fourth time really key level the pound Decision time's got to happen soon oil as well The balls are one of the fen literally where we're trading now gold potential good shorts higher up stocks If we can get a drift love to buy the dip or The classic on that as well, please do let me know. Hope you'll have a good trading date and I'll catch you all Let's go