 Very good morning. Anthony here on the desk Tuesday 17th of December. So I hope you're doing well In terms of what I'm going to cover in the session today got an update a bit of pressure on Sterling currency overnight gap down and we're trading down about a point this morning under the UK and European Open So why has that happened and what do I think about that piece of information that's come out about Boris Johnson? Essentially toughening up some legislation within the withdrawal agreement bill He's going to look to push through their lower house of commons on Friday So we'll look at that We're also going to have a quick catch-up on the Latest status of the US China trade talks a few more comments out of the Chinese finance ministry overnight and then Trump impeachment a couple of articles about that because it's likely that the house are going to push forward and Pass through the impeachment of the US president So he would be the third president in history to be impeached But I'm going to explain to you why I think that out that is a non-event and why Actually, I think that's a positive for Trump. I know it sounds a bit weird But when I explain it in more detail is hopefully my logic will make sense Otherwise quick look at the charts this morning things are relatively quiet I say that I am mindful of the DAX is just taking a bit of a breakthrough Of what was the overnight Asia Pacific session and a bit more of a cleaner break through its pivot level So the DAX under a bit of downside pressure in terms of equity stories from a specific Company point of view outperformers taller oil. I think just rebounding after getting absolutely Slammed last week on the resignation of their CEO and the cutting of their guidance So there are about 4% at the open Airbus benefitting of course from the Information that we've had from Boeing looking to halt their 737 max production in January so Boeing obviously coming under severe pressure on the back of that and that's sort of Helping support then their major competitor in France on the flip side. I just heard the squawk mentioning We did have the Bank of England stress tests Yesterday now all banks did pass that meaning that even in the most adverse worst case Brexit Hard Brexit, let's say disorderly non-transitional environment banks are seen now very different to where we were 10 years ago with adequate capital buffers to navigate that type of Severe economic situation. However Lloyd's banking group was seen as a little bit more fragile than perhaps some of the others And their shares down roughly 4% of the open But as you can see from the cross asset class mix Yes equities seeing a little bit of a downturn But nothing really too substantial bearing in mind. I do think that with particularly US equities I mean just put into context where we are. I mean we hit 3200 of course yesterday New all-time highs once again when it comes to US indices You can see overnight this morning as soon as Europe's come in a little bit of volume picking up Touching that high print the record from yesterday that we saw coming in towards the latter part of Wall Street sessions So I don't think there's I wouldn't over Interpret this slight downturn that's being seen at the moment. In fact, I think it's probably Quite a normal thing with people just booking some of those longs going into obviously the Christmas period So if anything that range kind of play could be the way forward Just looking at the session ahead So what I mean by that is this kind of pivot level providing some of that downside bottom end of the range I don't think that's out of the realm of possibility at all today to get down another five or Also points and then just kind of keeping an eye on that 3202 and a quarter of which now is around there is the all-time high So if anything, I just would say it's bit of profit taking probably helped Exaggerated slightly by the DAX underperformance just given the technical break through the cash open Volume pick up and as we normally see the DAX could be quite lively at the open and so the S1 then the futures just a Short way off and where we are at the moment currency markets I'll talk about sterling in a second, but otherwise euros very quiet. I mean in terms of the actual Dollar index, I mean most of movement is being derived from the British pound at the moment and that is weaker So the Dixie's up about point one three percent oil and gold markets pretty quiet and the US 10 year Effectively sideways just hugging the pivot level Or be it the Bund is up about 29 ticks this morning So let's have a look at this Brexit headline and what is the deal and and what how has it impacted the pound and let's put That into a bit of context From the UK general elections so we can understand the kind of journey that we've been on in in Cable and so this was it. It actually did come out in the telegraph I'm told at around half past nine last night But however, I don't think it really caught much market attention until 10 o'clock when the FT ran it And then all the other news publications were running it. So I just happened to be As I am a lot of the time in the evening. I just happened to be on my phone And I saw the news when it broke And essentially in summary Boris Johnson will this week publish Brexit legislation that would legally Prohibit him from extending the standstill transition period covering relations with the EU beyond December 2020 so if you remember at the moment and what he's trying to now force through Parliament with his majority Is the withdrawal agreement bill? This is the wab which we're expecting to go through before Christmas recess and that's expected to go through on Friday now That current status is that that then means that all being well He can deliver then going through the various formalities to complete that by 31st of January moving us into the transitional or Implementation phase now at the moment the legislation would dictate that that's December 2020 So there's a year lock-in However, what was also previously in there within the wab was Conditions that if it was looking unlikely that he was going to get a deal done by the end of 2020 He would need to inform then his EU counterparts by July at the latest about the request for an extension And within the clause is an extension of either 12 or 24 months beyond that of December 2020 Now what's come out overnight is I'm well surprising, but I'd say surprising in a sense of I don't think everyone was thinking That you know there was a lot of talk about him now having such a firm majority Would he need to be so strong with Brexit and could he soften the stance slightly in order to get a deal done with Europe? but it's quite the opposite and What's happened here then is by doing Toughening up this version of his original Brexit legislation Basically creates a new cliff edge at the end of next year if no trade deal is in place So we could actually end up where we were if you remember in October before the original deadline when it got extended to the now Jan 31st. That was when we saw The actual options market pricing in large volatility Pound was coming under pressure at the time the risk had to be priced in of an actual Disorderly non-transitional no deal now. We're talking about a transitional But still a no deal needs to be reflected in price So hence the reason why if I just transition to cable I've marked this up just now to see some of the main Fundamental Catalysts that have created the price action that we've had in sterling dollar futures over the course of the last week and you can see here obviously the Sharp gap up on the surprising size of the Tory majority That took us in the futures north of 35 particularly when the working to and Darlington results came out Which were the first kind of early Areas to release that turned Conservative and that was when we hit that kind of peak price in the futures, which was around 135 50 We then kind of backed off you remember on Friday morning. It was almost like Just fading the move in a sense that majority was the baseline expectation We broke a couple of key technical points as well as psychological handles. We came back down We then rallied as Markets reopened on Sunday night perhaps a degree of relief However, we've now had a gap down I mean looking in proportion to the size of the gap up on the election I mean the last night's one is very small but a gap nonetheless and importantly it's a gap that puts us below the price point of what was then the initial pullback we had on the morning of The results last Friday So that now I think will form a pretty decent and strong area of resistance You can see here the market on the gap down Responding on the s1 on the daily pivots came back up to that exact level So you would have had and I know Talking to Liam here one of the guys on on the trading floor He's a bit of an early bird and he was up at 5 a.m. This morning And he really great entry point to get in on the short there on the digestion of UK European players coming in Really, you know a lot of people would have been asleep last night when that initial news came in so looking for a secondary phase reaction on the gap and You could have got a nice entry on that s1 Stop just above on the previous low on the pullback to the low that was formed on Friday And just rode the move all the way back down playing the price movement that we had on the initial movement on the Reopening of blowback's trade last night scaling out and perhaps even keeping some on this morning to target back down to the gap fill Which we briefly had last night But back down to targeting towards 132 75 80. So yeah, excellent trade for him Early bird does indeed catch the worm in that in that sense So yeah looking at it Stepping back, you know, we are pretty much where we were on that Thursday on the day of the actual vote in itself before the actual news broke and came out so Quite interesting that that that spike that we had multi-point of course already taken back And we're only just a few days Post that that big political event and what do I actually think about this because I think that's a different thing Well, let me just flash this up Let me transition my screens again. This is the brexit timeline now, of course We can kind of scratch out a couple on the left-hand side. We've had the election We've had the EU council meeting the potential vote on the divorce deal is likely to happen at the end of this week We know then he's done his cabinet reshuffle yesterday. So that's complete He's now looks like he's gonna repend the withdrawal bill to make it a little bit tougher than it on brexit than the original Legislation, the Queen's gonna give us speech on Thursday The wab will be heard and voted on on Friday That then allows them to go on Christmas recess on the 23rd of December They will not return to work potentially could be a movement on it until the 6th of January and then The deal to be ratified by the UK and approved by the EU council and EU Parliament in January to reach that of course Deadline that we all know about which is 31st of January then comes that point of phase two negotiations pick up in Feb and then And this is one again that just to be aware of and how this current piece of law works The deadline for extending a transition period is actually the 30th of June as far as what? What's existing at the moment? So that means then that Boris Johnson? Basically the reason why I was so sure of the fact of getting extension is that he basically needs to have a complete trade deal with Europe in four months Which I think is absolutely impossible Quite frankly from a legal perspective now what this means then is what what he's doing here then is you know What what's the thinking and thinking about this last night? My first reaction was that for me? I've been thinking about well. How can I think Boris Johnson? Absolutely will still extend the transition period Irrespective of this legislation passing let's not forget legislation can change as it is now can change again in the future So I think sure he gets his hard Brexit legislation through He then has and a good Positioning to go back to Brussels quite aggressively, but more importantly I think Boris and his team know that you are not gonna buckle in this situation He's gonna run into a lack of progression But importantly for Boris Johnson and what's at the heart? I feel of this move is that now he's gonna be allowed to pivot from the people versus Parliament which is what won him this election So a resounding result I think he's gonna pivot that now that narrative to us versus them Us being Britain them being the EU. I think then when Inevitably he goes cap in hand because there's no way he'll execute a no deal This is his greatest bluff He will then go back to Europe at the end of 2020 and then people will forgive him People will not now say Boris didn't deliver Brexit because he will be banging the drum as he was in the build-up to the election But instead of people versus Parliament, he'll be saying us versus them. It goes completely tribal In that sense if you're talking about human psychology and behavioural the way societies function People will forgive him for changing the narrative and and and missing deadlines just like he did I mean technically speaking giving his own words Boris Johnson should be dead by now but he's not and No one seems to have batted an eyelid and I think This is a stroke of genius on the the puppet masters that control Boris because I think ultimately They're gonna extend but they're gonna get away with it and the British people are gonna forgive them Just like they did with him not delivering on Brexit the first time round to have such a great fantastic result with Brexit. So In the short term, I think people have got a price in this negatives and I've just seen the pound flash on my charts Yeah, look at that. So Liam Great trade if you're still holding some of that I mean as I was saying Targeting real just a real nice setup on that trade to get in if you go in early Nice risk reward You're coming out some of that at the bottom end of that original spike Coming out of some more on that original hide It was on the 12th and then letting it run if you've got a few more on I guess looking at the top downside targets now Probably yeah, exactly where we are at the moment just bringing in some of that price activity late on the 10th You have that initial high on late on the 11th for the break hire Then probably just closing out the trade. I mean if that is How he's traded I would say 20 past eight go home job done In that respect so yeah, I mean the pricing in here negative I think fundamentally all make sense but a bit longer term what I do think is that As per what I've just described. I think it's an unsurprising tactic in regards to the Politics behind this move from Johnson I think actually the toughening of legislation Puts no deal back on the table allows him to pivot the narrative towards us against Europe He then accepts the extension at some point in 2020. He blames Europe Breaks his previous commitments, but washes his hands of any accountability and the show goes on so Again, that's that's my initial interpretation of what we're seeing on that issue Next then just having a quick look at US China China to grant more regular tariff waivers for US farm imports. This is all a little bit of extension of the Agreement on phase one that we had at the end of last week So China will provide retaliatory tariff waivers to buyers of US farm products on a more regular basis after the countries reach that phase one deal According to people familiar with the situation The trade secretary Lighthizer has said he expects the 86-page trade agreement to be signed by him and his counterpart vice-premier In China in early January in Washington So still relatively positive on that regard for the time being a lot of jokes though circulating I saw on the Twitter world in regard to The whole when are we going to start getting him playing the market with phase two getting done The other thing just briefly to mention because I think it only warrants a brief mention because I really think this is just a bit of a media circus rather than it is something influential influential for markets, but Donald Trump is this week likely to become just the third US president to be impeached when the Democratic-led House of Representatives votes on charges stemming from his efforts to pressure Ukraine to investigate political rival Joe Biden The House likes to take up impeachment on Wednesday setting the stage for a vote later this week The Democrats enjoy 36 seat majority in the House. So they're expected to win an impeachment vote Only requires a simple majority. However, that then needs to go to the Republican held Senate Where the red party holds 53 of the hundred seats in the Senate? So net net it's not going to pass Because it would require two-thirds majority of those present to remove him from office So this is kind of similar to what's happened before of course with the likes of Bill Clinton got impeached But they ever went through same things going to happen I think with with Trump here and if anything not sure if you saw my my tweeting this morning Perhaps slightly controversial, but I actually think Trump being impeached is a good thing for Trump I think it helps his case I think it legitimizes his argument for a witch hunt and it comes for me in the backdrop of all-time record high US stocks and low unemployment So for me it helps even further polarize this political divide And it strengthens his case. I think so Yeah, I don't think it's a market-moving thing And I think it's saying there's going to create a lot of or take up a lot of airwaves or airwaves, but Yeah, I wouldn't stress too much about it from a trading point of view Quick look at the calendar for what's to come. We have already had the RBA minutes They came out overnight. So if you have missed them, they basically said they're going to revisit policy in Feb 2020 but has the ability to add further stimulus if needed and it's ready to ease again if required so the Aussie as I speak is at session lows. So you're aware. It's been slowly weakening from the overnight session already through us S2 in the Futures market From data in the morning, you've got UK unemployment rate employment change and weekly average earnings Then leading us on into the US afternoon where we're going to get building permits housing starts in the US Industrial manufacturing production and the weekly API crude oil for trees they'll come later on this evening speakers wise Couple bit of a mix between well really ECB Fed and the Bank of England ECB speaking Kasmir at midday ECB's lane at 130 and if I'm the Fed you got Kaplan Williams and Rosengren all through the afternoon Kaplan will be a voter in 2020 Leaning Dove Williams a voter at present as to his Rosengren with neutral and hawk stances respectively and then Bank of England's Mark Carney Actually speaking at a dinner later on this evening at 7 15 So that's it from me. Let me hand you over to Sam You can go over some of the charts a bit more detail. I wish you a good day. Thanks very much Yeah, just as I'm coming on you see the pound has filled the gap on the futures there You can see let's put this on to 60 minute chart. You can see that just now Fill in that gap bit of support as you'd expect what a place to take profit if if you were short Overnight or any time this morning really but yet fill in that and looking quite heavy It has to be said but keep her keep an eye on on probably how we finish the 30 minute candle here could be a bit more Of a guide, but yeah, certainly this this market Which is over 300 pips down since Friday's high, which is a move in itself But yeah being pretty technical has to be said you can see we broken through and the first part of support that we had this morning Like I was saying was the high that we had back on the 12th on the election morning We've then broken through on the second attempt and then close that gap and maybe just spiking through a bit 132 in the futures below that but Marco saying to keep an eye on where we finish the half hour there decent move to the downside I'm remember from the election Alex got short up at the top. I'm not sure if he's still holding now, but what? What a trade what a call it was certainly You know a chat amongst us saying that we believe it's going to come down before then you know drift higher into next year, but Yeah, we all failed attempt of pushing that home and we've just lower and obviously an extended move today already down 166 pips since the the open on the future so big move in the pound over the last couple of days Zero just being dragged down a bit here as well worth keeping actually an eye Other than the 112 handle, but just a bit below here. You've got the s1 and lowest You know this part of the morning yesterday around 9 a.m We keep a watch on that because if that goes and you know You're also going to be coming into the area where you're most likely to find one of these trend lines And this is put this in of course on the March contract now so the to left-hand side looks a bit more thin You can see around that area. You're going to have some of these trends that do come into play And of course that is going to be pretty significant for the euro because if that was to To break where suddenly you're looking at euro coming back down again despite obviously a decent push Which we've seen time and time and time again this year for the euro Let's wait for this to load up here now looking on the daily chart. What is the euro done all year? And it's spring in Push higher drop down trend higher them drop down and are we seeing that yet again here? Well that trend like a bit of a guide for that I think maybe the opportunity wires would be as well if we were to get below that and close significantly Below you know maybe the highs that had on the fourth Which were a quite a key guide over the recent months for where direction could go So back below there. Well, you know, good absolutely drift lower yesterday gold I was putting this into with the pivots We we came up to test what had been quite an interesting level historically for for gold around 1483 Or so some decent price action again around there was also at the time of double top I know one of the the traders in stage three took this and Held it beautifully and you also got that trendline break I mean and looking at this were well good trade even the trendline break would have been but yeah rode that down towards near the low And actually probably got out literally the lowest price there was a fantastic trade however that bit of You would you would argue a bit of risk off this morning gold pushing to that top level So with the significance of that really do keep an eye on here Maybe you want to drag it towards yesterday's high on the R1 just to be super sure and it probably brings in now a new range Those highs and then down to Yesterday's lows which are pretty much bang on today's s1 So quite a key mini range there for the gold 47 and a half 14 77 and a half to the downside and call it 1485 to the upside if that is to break to the downside yet again just want to reiterate the importance Really of this trendline from the low that we had on the on the 12th of November if that is to go It could be buy by gold but a break above here and maybe 1490 well actually now you start getting a bit more confident than this market could be looking at 1500 again So gold very much set Waiting for a bigger move. It's obviously other than that push lower that we had on the on the 7th of November It's kind of been up and down, you know with the trade comments Understandably You know that were positive and then negative it was hard to really get a direction What the Fed going to do as well and it still feels very much like we're waiting for a bigger move here So for gold for me, you know, you would you'd be comfortable getting in You know a long maybe above 1500 medium-term or a short if we were to break that trend line Intra day. I'll just keep it towards that range and let that guide price actually S&P we did a little chat during the day you say about the the handles on the futures And let's just do that again here now 3100 when we first reached Back on the 8th of November. We came lower the next time we broke just a bit above it and came lower again Let me just make this a bit clearer to see It took us one two three days of testing that level with good resistance before finally breaking through And then it offered a good level support on the way down. We're now obviously at 3200 first day yesterday We've had a little spike through to then come back down seven points. We're now attested it again We've come back lower. Yes helped by the overall mood in the market But just the importance of these round numbers On the on the futures is quite significant here So where could we go to to today to perhaps find some support? You know while the pivot is not a bad place You've got a decent bit of resistance there from yesterday the low of the day That's a point to consider and then maybe below there You would be eyeing up the the higher that we had back on Friday the 13th 31 88 as another key level as well We're getting a cue perhaps from what the DAX or euro stocks are doing as well But stocks just under a bit of pressure Today as well potentially later on if you don't like the idea of buying a dip and you want more of a Continuation strategy into the afternoon again Not a bad decision to do that you can see this triple top on the on the 15 minute here a break of that Could well be the preferred choice I would say with these lows Just considering the time of the day the range trade isn't bad But maybe you want to see a bit more confirmation before looking to get in there as well quick Look over at oil before we have a look at the European equities It's it's not doing too much to be honest and we were actually you know Just talking about when I was doing the charts with the strategy What you know, what's the main driver for oil this week? You know OPEC's kind of done obviously trade comments could Swing this market one way or another but that again seems like we're perhaps through the worst of the year now And you know other than the inventories, you know I'm not expecting too much in the way of movement for oil and that was kind of resembled yesterday and of course tomorrow this morning You're not gonna see a great move either but 60 30 to the upside Let's keep an eye on that as well from the beginning of the week. Let's have a look see if we can get some sort of trend No, that's lovely this low here 15th Over night to the 16th yesterday and then this morning one two three nice tests on that break of that down to $60 pivot It's not a bad little trader perhaps consider and then to the downside another key level support 5980 I'll be keeping a watch off a break of yesterday's highs Maybe our target in the spike that we had on Friday the 13th Dax and Eurostocks this morning to breaking through their pivots looking pretty Identical has to be said we just come up to find or look to find a bit of resistance on what was the initial low Of the morning to keep a watch on that to see how that reacts along with the low before We really broke down around the pivot So those would be the key Resistance points that I'd be watching a favor. I would favor I should say the the pivot just because it you know Seems that's why the selling really started this morning Also, you can see a break of this trend in the early hours Actors such good resistance to the upside. So if we at any point do push higher just be aware of that as well quite a lot of support has to be said for equities both Europe and the states below where we are training so it's not like I'll get to ahead of ourselves here Just in the early morning quick look over the pound just to finish again. You can see still having another go at Just trying to confirm that push below The gap here. You can see that 15 minute clothes was above Can we get one below and I think that's when you would get maybe a bit of an extension below 132 But again a failed test of that and you can see a reversal as well So interesting price action this morning a couple levels really set up quite nicely Let's have a quick look over just to see the morning So you've got that UK day at 9 30 unlikely to really do too much about again Keep an eye on that it's coming out in 50 minutes and then it's quiet for the morning till we come into the afternoon and relatively quiet week data wise for the US anyway But yeah one to to bear in mind, but any questions as usual, please do that Now the pound moving stocks have got some nice supporters below where we're training gold at a massive level is you are about to do What it's done all year oil not much going on and just keep an eye on any of those Previous support levels in the DAX that could give a guide for the rest of the market concerning risk Hope you'll have a good trading date and catch you all in the chat later on