 Good morning and welcome to the Monday market update with me, David Madden. Today's date is Monday the 10th of February 2020 and the time has just gone 1155 GMT and to be honest it's been a fairly quiet start to the 20 week European equity markets are a bit lower keep in mind the finished lower on Friday, but Last week was by and large a very positive week. The first few days of last week Monday through Thursday We're very positive very positive sessions for equity markets in Europe in Asia and the US but They finished lower on Friday and they finished and they're a bit lower today It seems to me that the kind of bullet sentiment that we had last week As strong as it was was kind of sort of in a way artificial because it was largely driven on actions by the Chinese authorities whereby the Chinese central bank injected liquidity in the market In relation to the domestic stock market the Beijing authorities Put in tighter restrictions on short selling and then on top of that The Chinese government announced plans to cut tariffs on you cut cut tariffs on US imports So that was a way of kind of you know distracting as a way of actually, you know keeping up keeping up appearances as they were keeping up, you know the the Confidence in the financial markets in China and in turn the wider world. So that lasted For the first four days of last week. We saw a down day on Friday despite the fact we'd overall got a positive US jobs report Lost ground in Europe lost ground in the in the US and always were a bit lower in you in Europe I were pointing lower in the US. So it seems to me that the markets are a bit Are a bit of kind of looking for the next the next kind of big thing We've had intervention from China last last week And now that we've had no more intervention. We're now seeing a tapering off of Rowsing a tapering off of activity. It is worth reminding ourselves Now we had quite strong figures from the US last week in terms of the jobs report We look here on insights insights can be found under market news and analysis second option down insights The headline figure came in much better expected 225,000 jobs were created Expectations were 165,000 jobs the previous month number was revived higher to 147 from 145 unemployment ticked up from 3.5 to 3.6, but average earnings Came in higher than expected it came in a 3.1 percent when they were expecting 3 percent So things were good on the non-farm on the jobs market from the US But it wasn't really enough to kind of turn sentiment around it seemed to me like it on Friday The traders were very keen to take profits and in case anything in case the hair crisis in China It took an turn for the worst over the weekend and unfortunately that her crisis is getting worse in China With that we're seeing European stocks All oil and gas companies mining companies travel stocks, you know And also big, you know the likes of Louis Vuitton and Burberry in any kind of Western European brands of exposure to China They're under read In terms of economic indicators pretty quite morning Italian industry of production was very poor But that didn't really have a massive influence on the markets So what I'm going to do now is always take a quick look at the week ahead I look at the major events of the week ahead and then I'll focus on the major charts of major charts indices currency fairs and commodities and the week ahead article can be found on our website Cmcmarkers.com go to insights under news analysis. You'll find it So looking ahead to tomorrow we have a preliminary GDP from the UK Tomorrow we have full year figures from a cattle on Wednesday We have the Reserve Bank of New Zealand in the trade decision It's marked the pricing in a very high probability of no change Don Elm read the UK listed retailer. They have numbers out on in half your numbers out on On Wednesday their share prices performing very well recently keep an eye out for those Barclays will have a full year figures out on on Thursday On Friday. We have an update from Centrica. You're a British gas. They have fun your figures out On cross Thursday and Friday. We have US CPI numbers and US retail sales and On Friday, we have full year figures from Rome and Scotland And we also have growth figures from not only the Eurozone, but also from the Eurozone's largest economy, Germany I'll take a look now at the foot 200. I run to Some of the major indices some of the major currencies and some major commodities So the as we can see here between late to mid-December and into late January with a decent move to the upside on the Foxy 100 Basically since the the coronavirus concerns really kicked off. You saw a sharp move to the downside The market bounce back, but still we're now kind of back below the fifth of the moving average at this blue line here But rolls at the same time were above this red line the Trinity moving average So if you can hold above that metric the Trinity moving average at 7364 we could see the kind of the kind of broader wider trend over the last few months continue I should that be the case. We could look at targeting the highs of early February in around 7,538 and if you go beyond that we could make you heading towards 7600 On the flip side if you do see a decent break below this red line The Trinity moving average around 7364 we could look to retest the the lows of the lows of the lows of late January here, and of course if you go below that we could be heading towards 7,000 200 or potentially down to the lows of early December It is worth pointing out that the footsie 100 is probably One of the big indices around the world in say the West as probably under former It's probably because it has a disproportionately large amount of oil and gas and mining stocks in its composition And they're heavily connected to China. Therefore, they're not doing they're not doing so well Taking a look here at the DAX the big picture view for the last few months As you know from October almost been very positive We've been a bit of a range round between December to February, but we can see here at the market is an all-time high in late January The highs we saw last week were not too far away from the all-time high So sentiment is certainly positive or comfortably above this blue line here They fit that a moving average that comes into play just north of 13,000 300 while we will above that metric It's likely we could see the wider positive trend continue So we could like a retent no targeting 13,600 or beyond that up towards the record high achieved in a late mid to late January If you do see a pullback this blue line here 50 move the average my like to support and even if you go below it in round is so big as a bit of consolidation in this area in 13,200 and even if you go below that this yellow line here the one really move the average Just north of kind of 13,000 a big cycle psychology number that area might provide support should we see a Fairly size of a pullback I'll take a look at what's going on over in the US turning off with the Dow Jones US markets are in them are in decent our decent shape. It wasn't too long ago We had the foot we had the up the Dow Jones and the S&P 500 record highs Achieved only only last Thursday Thursday the 6th of February The market has moved a bit lower since then We're still very much in the upward trend, you know, we're called to be above this blue line the fifth and moving average year So the upper trend is very much intact. We're currently expecting the the Dow Jones to open And when we cash trading it's underway expecting to open around 29,000 and 80 yeah, 29,000 and 80 there they're about The wider upward trend is that very much in play if we look to kind of press on higher from here We could be looking at testing the all-time highs. I think I'll be on that. We could be looking at testing 29,600 700 so while it's a fourth And he moves to the downside if you do drift lower from here this region here in around 2800 and there's a fair bit of consolidation in that area So that could act as support if we do see a move to the downside and even if you go below it This fifth any moving average here the blue line Which comes into play just south 28,600 that area might act as support It's only really if you take off the legendary lows could that would begin to be before concerned It's a fairly similar position on the S&P 500 whereby an old-time high was achieved last Thursday This is what I'm referring to here the market as a pullback a bit of a bit of the ground interesting enough though even though in the in the future in the futures market on Today at today on Monday the market pushed lower, but it didn't get as low as a 3300 this area here was been recently important metric recently didn't quite quite get as low as that and we're now expecting The markets now in around 3325 so we're actually if you could hold above that metric 3300 it's likely we could see the kind of wider upward trend to continue and then we'd be looking potentially Re-testing the recent all-time high and if you go beyond that we could be looking targeting 3060 70 so what it's a fork, but even if you do drop below This this area here support could be found from in this kind of zone of say 3250 down to this blue line here the fifth and moving average And notice how it acted nicely as support in late January early February So that trick is important in the past it makes it more likely it'll be important in the future But although although there are no guarantees and the fifth of the moving average comes into play at 3228 Turning our attention to the currency markets. So this is a US dollar index and a very good run last week The US dollar index hit a level last seen in about kind of mid to late November latest late November Last year on account of driven by well driven by a few factors But the strong US jobs report really added to it So with that it's no surprise that we're seeing Euro dollar down around these levels on round levels last seen in October last year So your daughter is in a nice dower trend lower low a lower high a lower low Lower high and a lower low, but we seem to be getting a pulling back a bit of ground today Granted we had a few days in a row of losing So that of a pullback isn't a shock if you could hold above the lows of February We could see a bit of a rebound potentially up towards the 110 area But if you do have a size of break below the Friday lows It could take back down towards what a nine are potentially down towards the lows I was saw in early October in at one spot away 79 that area Let's take a look at the British pound versus the US dollar so we saw a bit of sideways training between late December and And January and it didn't really kind of it was kind of it could have failed to spend my time north of 132 But it really spent a whole lot of time south of 130 129 and a half this I'm keeping down this area here one spot 29 If you can we're currently above it. We're currently in at one spot 29 19 If you could hold above one spot 29 We could see the market head back towards 130 and if you go beyond that We could have head back towards this blue line the 50 movie average in at one spot 30 71 If we do have a decent break below 129 It could take us back to the lows of early November this area here in around one spot 27 68 Taking a look at what's going on and gold sort of the commodities So gold is slowly but surely kind of gaining ground because I had a fairly negative and a fairly sizable sell-off Monday Tuesday last week whenever we saw the jolt higher in stocks But since that we've seen a bit of a turn around and particularly say kind of Friday and today We've seen stocks lower Friday and today and then we're seeing gold edge a bit higher So and also the broader trend for kind of months and months has been very much to the upside So if we do press and hire from here in gold, we could be looking at retesting this highs of early February in around 1593 I don't know if you go beyond that 1600 its next biggest psychological number if you do have a size to break lower and gold We could look ahead and back down towards the lows of mid February this zone here in around one spot 36 And even if you go below that gold is all strong recently, you know, we could be looking at retesting the 50 movie average in around 1526, you know the 50 movie average nicely acted as resistance and support in the kind of mid to late December and as I said before The metric has been important in the past. It makes it more likely to be important in the future, but nothing is guaranteed And I move on to oil. So China is the largest Consumer importer of metals and energies oil and gas in the world So it's had a dreadful time of it recently because the fear is that the tragic health crisis in China could like is likely to get an impact economic growth that really hasn't been Fully kind of estimated or ascertained what the true economic cost of the health crisis is going to be So traders making of assuming of the worst and see a very aggressive sell-off in the oil market We could seem to kind of pull back Received, you know, we seem to pull back a small bit of ground today the longish wick on this The day isn't over yet, probably halfway through the day. We see a bit of indecision on this candle If you do look to kind of hold keep off of today's lows We could look at rebounding head back towards $57 a barrel on branch, but if you do have a decent break below today's lows And we kind of print, you know fresh multi-mode lows or freckles fresh year lows We could take us back towards Around 52 dollars a barrel keep mind when the recent lows, you know today We're basically that below us since January 2019 so there were 13-month lows that were cheap today And lastly I take a look at WTI fairly similar position situation rather whereby we're talking at or near When you one year lows if the lows are made the lows were kind of one year No, the 13-month low was achieved last last week But we're just just about clinging on to it It had its rebound up toward this area 52 spot 16, but it couldn't get quite above it Would be pure to be going low yet again if we do break below the lows of last of last week We could be like the headache back down towards This area here in around $48 a barrel But on the flip side if it, you know, if you could hold above last week's lows I mean look to retest the recent highs here in a 52 spot 16 Break beyond that could take us up toward this area here in around $54 per barrel Now I want to thank you for listening. I covered quite a few markets, so I appreciate you bearing with me Have a good training week and good luck