 Okay, very good morning to you. It is Monday the 1st of June. My name is Anthony Chung. I'm the head of market analysis here at Amphi Trading I hope you all had a fantastic weekend before I begin talking about the general fundamentals and a preview for the week ahead I just wanted to say remember to subscribe to the YouTube channel There's some excellent videos there already for you to have a watch to supplement what I'm going to talk about Which is very much the news that's occurred over the weekend and from a fundamental perspective Then what's the general consensus for the main events for the week ahead? There is already a full weekly trading setup video from Sam North one of our senior traders and he's going through the markets much more from a technical basis and Then Eddie Donmez one of my colleagues has also put together a fantastic video looking at about explaining in more depth All of the background and also what's to be expected Including things like who are going to be the winners and losers between US and equity Chinese Specific stocks in his latest video in the trade war explained So if you just jump on the Amphi trading YouTube channel, you'll be able to access all of those Alongside my weekly daily updates that you'll see in that playlist there at the top All right, well, let's move into the briefing then and what have we got on the agenda for Today and this week and things off to a relative positive start actually despite an initial dip down that was seen In overnight trade initially, you know, if you can see it quite here in the middle of the charts slight dip In the initial reopening of electronic trade last night on globe X and this came after as I'm sure that you've seen Investors weighing the violent protests in some American cities that have been seen stoking Concerns about the reacceleration in the infection rates in the US that could well dampen the economic recovery Following the death of George Floyd however, that move was Largely brushed brushed aside and the main theme being that of that highly anticipated speech Which we are awaiting from Donald Trump came pretty late last Friday But actually stocks as you can see if you go back to the close on Wall Street We are rallying all the way into the close after he spoke Because although the revoke of China's Hong Kong Hong Kong's special status He refrained from making any adjustments to the China trade deal And so the net summary here was that it wasn't as bad as some might have feared given all of the increase in the Rhetoric that Trump administration were making last week and as such then this is what the The general scoreboard looks like from the overnight Asia Pacific session to probably help add a bit more context So the hang saying was up North of 3% the Chinese mainland see it CSI 300 the largest companies in China up to shy of 2% in terms of the Equity index futures even further in the forex markets the dollar touched softer Has been quite typical where we've seen a little bit more risk appetite return Going off the general price pattern movement from last week's the Dixie's down about four tenths of 1% It's actually just below the lows it will soar Toward the end of last week's session So both major pairs being supported at the moment in the currency markets You can see top left here euro dollar just having a retest up and around Friday's high and it's respective R1 the futures and then Cable despite then as I will talk about in a moment The next round of Brexit talks probably unlikely to yield any form of real tangible progress Irrespective of that cable just taking heed from their generally softer greenback and coming back up towards Asia Pacific High is up 78 pips this morning. So both euro dollar and cable on a firm footing Irrespective of the the equity recovery that's been seen overnight Gold is up about seven dollars and just using the R1 Which was in the overnight Asia Pacific session a point of resistance is a bit of support a floater price for the moment T-notes though is down about two ticks But has been relatively quiet trade to pivot just holding the price action for the time being All right Well, let's go into some of the headlines and talk about some of the main stories and what we've got on the agenda for the for the week ahead First off starting with the overnight session. Do you know you had the official Chinese manufacturing PMI? Did miss expectations but did remain in Expansionary territory the non manufacturing PMI the case in manufacturing PMI topped estimates so maybe helping a little bit in terms of just a general stabilization of prices remember from a Kind of a weaker head point of view the PMIs really do take precedence. Let me just Flip over and change my screen. This is the weekly calendar I've put together from my macro menu, which I'll put in the description of this video if you wanted to look at My written text in a bit more detail, but you can see here Monday really dominates with the manufacturing PMI numbers US ISM manufacturing PMI coming this afternoon and then you've got the service PMI data on Wednesday So these numbers are going to be one of the main things coming out this week alongside other things will discuss such as rate decisions You've got the RBA rate decision the BOC rate decision and the ECB rate decision all coming this week And obviously we bookmark things with non farm payrolls coming on Friday, of course Which we'll have a look at in a moment So looking at that the headlines what are some of the things in play? Well This is one Europe's virus hotspots exit lockdown as experts urge caution UK Italy plan to remove some restrictions this week This comes as per what Boris Johnson had already outlaid in the UK last week The first of June is kind of the next phase the next one thereafter coming in the middle of the month Interesting then to continue to track and monitor and be vigilant towards any new reinfection rates Certainly, they're not going to appear Immediately as the lockdown loosens, but certainly with that incubation period as we know can be a number of days up to approximately two weeks This is going to be something still to monitor. It feels like generally The more closer tracking of the virus has kind of dissipated a little bit as certainly last week tensions Very much turn to the trade war, but I would say then the the further we get down the loosening of restrictions The more likely it is that we need to monitor these closely again going forward. So Yes, maybe not the singular bigger thing the biggest thing right now, but certainly definitely needs to be You need to remain somewhat vigilant One thing I did see and I just wanted to comment because I often do when Goldman's come out with their latest research note talking specifically about the S&P 500 and US equities, but they've kind of flip-flopped a little bit between being Optimistic to pessimistic to now perhaps then a little bit more optimistic once again having Rolled back. What was their previous fairly negative outlook? Let me just flip over on a different chart here and you can see so Previously Goldman Sachs had expected the S&P 500 to slump to around 2400 So this is that great dotted line. You can see here down at the bottom So this is the current price on the S&P 500 and what goldman's were anticipating was a pullback down to that level before then The re-acceleration and the pushback higher Towards 3000 Now what they've said is it's highly unlikely monitoring fiscal policy support limit Likely downside to roughly only 10% from the current days price a 10% depreciation would be here This would be 20% in that effect. So they're looking now for a Potential downside risks being capped if we did have a reversal at 2750 They've maintained their year-end target of 3000. We're obviously trading above there in the spooze at the moment We're trading around 30 46 currently But they have also said that the S&P could go as high as 3200 which as you can see would put us back above those early March before the The kind of initial pricing of the pandemic move that we saw So full reversal of that move and up testing towards support points that we were seeing in the beginning of the year of 2020 so yeah, just a point that out In terms of this week ahead though, there are a couple of major events that are happening I mentioned the RBA and the BOC not going to go into those right now in detail But I'm going to talk briefly about the ECB DCB very much expected on Thursday to increase their quantitative easing program According to a Bloomberg survey economists conducted essentially last week majority of them foresee an increase of 500 billion euros some the next kind of group of Analysts seeing 250 but anything short of Expanding that program and this comes of course irrespective of that German Constitutional court hearing we had about two or three weeks ago Would be a massive shock to markets and if they don't expand their QE program you would expect the euro to accelerate There'll be some sharp moves in European yields on the back of that probably European equities become under pressure because markets are very much now priced and positioned for more to come in the form of Monetary policy stimulus from the ECB Alongside this we get the latest euro system and ECB staff macroeconomic projections So for those not familiar with that this is essentially the four times during the year they rotate every kind of quarter of releasing their latest Vision about what the future looks like economically and this will be quite important because it's likelihood that they're gonna Need to downgrade that to the reality of how bad economically The European area has been impacted by the coronavirus And so as per usual will be tuned in and listening very carefully to Christine Lagarde She holds that regular press conference as that's really one of the main events for this week This is just a quick look. I know the the text is a little small to see sure I can zoom that in a little bit more But this is looking at the basically the central banks QE program And if you remember it was at the end of basically 2018 going into 2019 where they effectively turn the tap off and ended QE this was part of their kind of normalization of policy and winding down of Active quantitative easing however that restarted of course as we know towards the at the back end of last year And it really started to one terms the announcement till we start it and then it really started to pick up some pace As we've gone through the response to the pandemic So the 12th of March was when the ECB started to ramp up their purchases from what had been the recommencement Back towards the end of last year They're then in April Well, if you remember April they ease their collateral requirements. They then put out this pandemic long-term targeted refinancing operations Also kicking in So you can see here The kind of depths of which they've gone back to having unwound some of this program We're right back to really where we were during 2017. Let's give you some idea the other thing of course is you've got payrolls coming on Friday and The the headlines are going to make for some pretty scary reading US unemployment is set to rise to 19.6 percent So obviously this is kind of topping up that pretty drastic number that we had Last month and that was the month when we had the full kind of repercussion of the most stringent part of the lockdown This data here For the month of May will actually capture part of some states reopening, but that's really what's going to make this report somewhat Less important than I'll say with June Which is when I think you're going to get a much better idea This is next month's payrolls report about the general Speed of recovery as most of the economies then will be in some shape or form in one of the phases of being reopened So for this time round on Friday, yes, it's going to be a dominant feature of mainland Or Main Street kind of press if you like The unemployment rate near 20% the actual non-farm payroll number is going to likely have declined by again Another deep negative number eight million is the market consensus You've got a range low of seven minus 17 million to a best case scenario of just minus 2.5 million but the idea here being that although Things haven't been this bad in US jobs since the Great Depression of the 30s Markets are very much priced all of this in and are forward-looking at this point So as much as it might well create a little bit of an episode of volatility at the point of release I don't actually think it's going to be too much of a big deal for markets to manage this this particular number The other thing then moving over to the the UK Wanted to mention a couple things because actually What if I if I jump over to here first? This was an exclusive Kind of interview in the Sunday Times Michelle Barnier who is the chief negotiator for the EU with the Brexit talks And the reason why I'm mentioning those is that Brexit talks go into their fourth round of discussions This then is actually I believe the last round However, Johnson has already been tabling that he wants to fit one more in after an European summit in the middle of the month For this looming deadline about whether or not the UK will in fact ask for an extension to the current transition period due to end At the end of 2020 now Michelle Barnier What did he say? Well, he effectively told the Prime Minister Johnson that he must keep to his promises If he wants to avoid a double economic hit of a no-deal Brexit and an economy severely impaired by the coronavirus pandemic David Frost who's basically his counterpart on the British side reported In the weekend press these become frustrated with the blocs continued demands over fisheries at one of the main sticking points at the moment and This kind of consistent consistent push that Europe have got about regulatory level playing field And so all in all I was reading some of the press from the UK on Brexit Last night and it really feels like we haven't moved forward really at all I don't actually think we're going to move forward in this next round of talks either such has been the form of gamesmanship and kind of Political kind of posturing the way that Brexit has gone is we need to get closer towards that final kind of 11th hour deadline if you like before then Something happens and deal-making will inevitably take place. So for me, does that then create a risk? Given the relative sterling complacency Somewhat in its positioning at the moment for potential of a no-deal I think that Yes, there is some potential at some point for weight to come into sterling. I just don't think it's this week I think if we come out the end of this week with Brexit talks and actually There is no progress. I don't think that comes as no surprise at all So yeah, I don't actually think that as much as Brexit comments will be coming Potentially second thought fast throughout the next couple of days. Not sure how much in moving they'll be to be honest at this point At least one thing I thought was quite interesting though following that thinking through is there's been a report Exclusive to the Financial Times this morning, which is reporting that the UK government is preparing a stimulus package For July and the proposals are said to include training infrastructure spending Newspaper says are up to half of bounce-back loans may default so a Bit more detail on the back of this what they're saying is that with Unimplementalizing rapidly the Prime Minister might also be due to make a major speech in June aimed at encouraging Britons into work and interestingly Whitehall figures said that Dominic Cummings obviously the figure very familiar with the man the chief advisor behind the scenes He's said to be in the main driving force and architect behind this latest plan for a stimulus package so Actually for me I think this is this potentially put some extra risk about the eventual outcome of those Brexit negotiations when we get down to that end of June deadline Because to me the fact that Dominic Cummings is said to be the main person driving this latest stimulus package And the fact that Boris is then going to drop this kind of Unveiling and big speech in June makes me think that then the UK are trying to kind of Appear in a strong hand that they're going to support the economy Irrespective of the fact then that they're not going to be bullied by Europe into conceding on certain red lines That they put forward so it almost feels like for me that the fact that this has come up and the fact that it comes from Cummings then actually the risk of note it all probably increases in my mind still is that going to be a factor for today possibly not but you know it really is starting to and I would expect The intensity of your breaks negotiations to ratchet up a few notches notches over the coming days for sure or weeks I should say That is pretty much it from me on my side, so that's kind of your general overview of the headlines and things that are going on So ahead of non-farm parallels don't forget you get the usual kind of sequence of major US data So you'll get the ISM Manufacturing PMI today you get the non-manufacturing PMI Wednesday So keeping an eye on those employment constituents alongside the ADP employment change number on Wednesday And the weekly jobless claims on Thursday all of these things will help give us a bit of a reference point What we can expect from the BLS report on Friday? Otherwise you've got the German factory orders and they're coming out on Friday Which I'll also be keeping relatively close on as well as alongside the German unemployment change and rate and then as I said you get there's other European PMI numbers manufacturing on Monday today and services on Wednesday So that is it from me any questions at all just feel free to to leave a comment on On the video. I'll be happy to engage and respond the final thing just to leave you with for any oil traders There's been a couple of headlines out this morning already OPEC is reportedly close to bringing forward their next meeting to this Thursday Previously the meeting wasn't scheduled to next week on June the 9th This is following a proposal from the adjuring energy minister and it's reported that Russia has had no obligations about bringing that meeting forward And of course this could be quite important just given the fact that there has been some noises remember About a week ago or so about Russia whether or not they want to continue down this route of aggressive supply cuts or not And so that'll be one to watch any further updates that could come this week. All right guys That's it. Have a good session ahead and a good week and I'll speak to you tomorrow