 Okay, very good morning. It is Wednesday the 16th of December. I hope you're doing well and just an early heads up If you haven't already done so remember you can join us on amplify live this evening full FMC coverage for myself and the team so the initial statement coming out at 7 p.m We'll be doing a full rundown and live coverage as it comes out And we've also got the masterclass happening this evening. We've got a special industry guest speaker as well joining us So don't forget it if you're watching this on YouTube check out the link below to get access to that but let's get straight into it and talk about what's moving markets this morning and we had a Higher close on Wall Street yesterday Seemingly then snapping this four-day losing streak in US equities as optimism is quite high Intensifying of talks on in Washington on Capitol Hill to try and get this relief bill over the line And so focus was very much on those congressional leaders from both parties the Senate majority leader Mitch McConnell came out last night Upon conclusion of a number of calls at Nancy Pelosi the House Speaker was having with various different departments and team members About how lawmakers McConnell said he will keep them in Washington Until the deal gets done and that kind of commitment was met with kind of mild relief That ultimately it looks like things might happen Of course the pressure is on because these negotiators are working flat out to try and find out finalize a coronavirus aid to attach to a Package of spending bills which they will need to push through by Friday at midnight in order to keep government agencies funded And so hence that's the timeline they're working towards so it might be that you know We're Wednesday now It could just still be another few days of haggling over the finer details But the market still pretty hopeful in terms of market reaction and positioning that the deal does get done And that's been one of the main things from overnight So higher close on Wall Street the S&P Dow up around 1.3 1.1 percent respectively the NASDAQ up around a similar margin And then they handed the back to the age Pacific region which kind of followed suit and generally higher across the region so this morning stock futures S&P's pretty flat but importantly just holding on to the the relative gains that was seen yesterday as you can see here in the center Right just coming up to a little bit of near-term resistance here and around what was the Early Asia Pacific open a retest we had in the middle of that session and a European open test this morning price getting a little squeezed up from the low point and Yesterday's our one which was around the final half an hour into the rally that we had on Wall Street in the futures market So worth just keeping an eye here as this this price to get squeezed in if it continues to remain that way during European morning Perhaps then the volume pick up might see a breakout in other direction as we go into the nice session We've also got that high as well the weekly high Which was printed going back on Monday that was seen just above these current levels around 8950 Is the overnight highs and then around 6061 is that weekly high that will be keeping an eye on today If we were made fairly bullish in inequity space Otherwise, how does this translate? Well generally when we've seen progression on that front We have seen a degree of dollar weakness. That is a little bit apparent this morning some fluctuation seen in the dollar today It's just recently bounced off its lows as I deliver this but it is Broken through what was the lower bound of the Dixie yesterday and that's then promoted a bit of an extension of Moderate dollar weakness. So the major pairs have picked up a touch this morning albeit just seeing a bit of reversal Off the pullback from the initial highs cable a bit of a standout. We'll talk about cable In a bit more detail in terms of the fundamentals in a moment But you can see we've had a bit of a false break around this real important psychological and technical Relevant level of 135 we look on the daily that 135 of course is this Meaningful level that puts us up at around two-year highs that go mats around Q2 of 2018 if we can really get above then initial False kind of move we saw at the beginning of the month, which was that Election 2019 this time last year pop that we had on the Tory majority the beginning of sep and the area which we tested just a few weeks ago so people still fairly Optimistic and hopeful of a Brexit deal emerging kind of few comments yesterday We can get up to speed on that in a moment about what I think going forward otherwise Gold has formed now a relative range So looking to consolidate perhaps a little bit after what was a pretty phenomenal move over the last 24 hours or so Because we've risen the best part of 30 bucks really initiated by not the overnight But the previous nights Asia Pacific session and so we bumped up whether or not this is tied to the idea about the Associated risks with things like the coronavirus with the increasing restrictions that we're seeing in the US or in mainland Europe Or in the UK as far as the announcements and the kicking of the new tiering system today Or whether it's more tied to still concerns about future forward inflation given the fact the success of this stimulus deal coming forward Which has promoted the moment dollar weakness and gold has continued to remain on the upside As I said somewhat consolidation now 54 and a half to 62 ish Which was the overnight Asia pack high and you can see it was a little bit choppy But a rough area of consolidation we had back on the ninth and the low back on the seventh So we're keeping an eye on that on the upside if we were to see any further more substantial gains in the metal here As then we would look to target up at around the probably the R1 Which starts to draw in some of these previous highs you can see here Pretty much lined up perfectly to the T with the R1 at 68 and a half Which was that high on the afternoon on the ninth if you remember Well, that was the ninth of December before we had bit of a breakdown in price Otherwise elsewhere oil respecting the technicals Quite nicely in yesterday's session in terms of the initial push-up to the high Which was the Thursday high that we printed which was around the 47 74 So yesterday it was a nice technical area of resistance with that high in the R1 and just given the scope of the rally that we had seen from Monday night session after the initial dip that we saw on the OPEC coming back on their demand forecasts So again somewhat consolidation now so looking around the pivot level at around 47 29 to that Double top now 47 74 would be the ideal areas to look out on the upper and lower boundary of that price For the rest of the session ahead All right Well, let's get stuck into some of the news. I've already really talked and got you up to speed with the general vibe on The GOP leaders citing progress in talks with Pelosi. So definitely we need to continue to track this This will be one of the defining factors really for the second half of the week But then let's have a quick update on Brexit. What is going on here? Well yesterday as you would have seen Sterling saw another pop on the upside and as I'm just showing you this morning It has I'm just speaking cable is at its session high now So definitely worth keeping an eye on here because technically a firmer move through 135 might see a bit more Momentum to the upside if we can really push on now one of the things yesterday was a BBC journalist called Nicholas Wacked so if you aren't following him on Twitter, I suggest you do so Tweeted about a feeling among British lawmakers that a Brexit deal may be close And that was enough then to really trigger further acceleration to the upside in the pound I think one of the most important things now is we need to see follow-up more definitive Confirmation that that indeed is the case remember with a lot of this Brexit noise which does create a lot of Kind of volatility and false movement in the pound Generally in a day training environment a lot of this commentary is coming from journalists and hearsay That they you spoke into official who's been part of a conversation or a round table meeting Of the negotiations and from what they're hearing. They're saying X Now what I need to hear is what why and what Z and did they all stack up pointing to the same thing that indeed? Yes, a deal is going to be imminent So there's a potential here for a build-up of Potential negative kind of reactions and given the market now. It's very reminiscent really of last week I feel that people are quite bid up the pound into the idea of yes ongoing somewhat dollar weakness, but also optimism over a deal only then for that to Kind of fall flat towards the back end of the week when we see seemingly no slam dunk concrete deal is signed and therefore As those comments start to emerge in a similar tweet fashion to the positive one yesterday We start to see quite aggressive downside risk kind of flashes to the downside And that could be largely worn out of the fact that the market has moved considerably higher in the in the prior session So it's worth bearing that in mind and actually overnight sources in the Times Newspaper here in the UK have stated that nothing was imminent on Brexit as of last night Both sides are pretty certain. Nothing will happen immediately I'm pretty similar what was echoed by Paul Brand of ITV news as well. So Definitely not a done deal yet I think at the moment I feel like the pound potentially could move higher Before then towards the back end of this week It starts to move lower and it perhaps quite violently so in terms of aggressive pullbacks as people get again Apprehensive that the reality kicks in perhaps the deal is not going to happen as as soon as they might have think So that's that's the latest on Brexit. The other thing you've probably read a lot about it's really dominating the national press at the moment is guidance around celebrating Christmas as we know the government is set to Relax the rules over a specified period of time so that Family and friends can get together under certain criteria Of intermixing of different social groups now it's come under a lot of scrutiny because Various different medical advisers have given advice to the government that this would be a bad idea as we already know the COVID situation if anything has worsened particularly in the likes of London and the southeast of England Which has resulted in this change in the tiering system effective today where? Approximately 61% or so of the UK now are in the highest possible Category of tiering for the the stringency of restrictions So at the moment there's a lot of pressure on the government the latest that they've said overnight is that they're expected to strengthen the guidance but not actually alter The the rules about up to three households being able to to mix to form a so-called bubble All four nations are scheduled to talk further today This is a this is I'd say a situation a fluid one that could well change I think the governments are going to find it particularly hard to do so because of the The public reaction then to what that might mean over such a cultural period However polls have suggested that public opinion might be swaying in the way of actually people not particularly happy with the government handling and would prefer to put Actually new rules in place. So how much of an impact really does this have from a markets perspective quite honestly? Perhaps some If we do remain in more strict lockdown and let's say let's say Christmas is off I Think in terms of containment of the virus then that would probably be very beneficial How much that would influence the pound? I mean perhaps mildly positive given the fact that What a super spreader event like Christmas could have is something we talked about yesterday, which is What we've seen in the US post Thanksgiving, which is quite an acceleration in cases And the problem here is that services like the NHS Liking in America with the US hospitals their near full capacity, which brings about big difficulties In terms of not just people with COVID but other people who also need to be treated for other different diseases and so on so That being said then I Don't think the government are going to change what they're saying I don't think that necessarily is a negative for the pound. However, it might well do so I mean become negative if then we see a big spike in COVID cases if Hospitalizations get to full capacity of which is a risk and then subsequent deaths start to rise quite sharply When we get into the beginning of January Then certainly that at the time then will need to be factored in as far as now is concerned I think it's somewhat overshadowed by the fact that there's this looming Brexit deadline that's in play That's going to be more of a near-term draw for the pound for the here and now The other thing of course today and probably the most important thing of the day overall for global markets is the Federal Reserve Really fantastic article in the FT just summarizing things and the four things to watch So let me just give you the the summation really of that. So since June In the early months of the pandemic the Fed has been buying a hundred and twenty billion dollars of US government debt every month 80 billion across treasuries of all maturities and 40 billion of agency mortgage-backed securities or MBS And they have said that they will maintain that policy Quote and this is the wording over the coming Months and it's that particular phrasing that's probably going to be the key thing to look out for When they announce their statement and then their subsequent press conference later on this evening at 7 7 30 London time So today it is expected to make a fairly significant Signalling change in that regard extending the time frame for those debt purchases by linking them We don't know to what specifically is yet but linking them to a certain economic metrics in the recovery So at the moment instead of saying coming months, which is kind of say Although there's some wiggle room. There's an idea of okay. So coming months means three months Let's say for an example Whereas if it was more tied to a certain economic metric in the recovery, well markets can take Somewhat confidence out of the fact that well look if it remains like it is at the moment and The economy the economic data remains weak like what we're kind of seeing now reemerge in America Because of the fact that COVID's been so violent and it's spreading creating these new round of restrictions where jobless rates are going to go up And confidence is probably going to diminish in the period ahead in the short term. Well, that means there's nowhere near that the Fed Are going to exhaust their bond buying program and that would be a net then more dovish move in terms of the language language change So that's one of the key things a more extreme scenario would be But very much so less likely Option would be for the Fed to increase the aggregate size of his asset purchases. So it's not so much about size It's more about the commitment of the timing of how long they're tied to doing it for There are a couple of other things as well people have talked about this idea of targeting then different parts of the curve to try and Pin down rates in the long end to try and keep them if there's a risk of a stimulus deal Coming forward soon, then that's going to create a new demand in in the economy as we go through in the period ahead Let's say as the economy recovers stimulus really starts to pay off in the in the actual real sense But so then the Fed will be conscious of trying to hold down yields in the long end in order to keep then a lower lending environment perception if you like because The pressure that would put on credit where companies are pretty high on debt at the moment Could be one of the biggest tail risks for markets under those scenarios And they will be conscious of that and in that kind of yield curve targeting fashion Which we've seen adopted by the BOJ or the RBA They won't commit exactly perhaps to that but something akin to it by just moving out the average maturity of their purchases Another thing to be aware of today. They're publishing their new Macroeconomic kind of forecasts so similar to what the ECB did just last week Good news on the vaccines may well lead to a rosier overall economic assessment if the Fed does see solid macroeconomic Improvement next year. It may lead officials to predict earlier interest rates than they did in September When the median prediction was for no lift off into at least the end of 2023 I Think that's make sense I mean the vaccine has come to market in a relatively quick fashion Which does give some cause for being perhaps a little bit more optimistic than where they were before However, I would say the Fed under POW like under Yellen who will soon be the incoming Treasury Secretary very much So of the disposition of Kind of slow gradual cautious type approach And I think if they're going to be any more bullish at all on their macroeconomic improvements for next year It's going to have to be like outweighed I would say by a more dovish signal elsewhere whether that's in the bomb buying language or somewhere else the other thing as well is if you remember there was this kind of whole slew of Emergency measures that got adopted by the Fed in response to the initial onset of the pandemic to offset the immediacy of the economic collapse that we saw in post spring However, there's obviously been a rift developed between POW and central bank and the outgoing Treasury Secretary Steven Mnuchin Where the latter wanted to pivot money back under from these underutilized programs back into more federal kind of spending and Basically what what markets might be looking for today? Is that the hope that perhaps then some of these Facilities get reinstated in the near future We know that Yellen is going to come in under the Biden administration She's going to work in a much more collaborative fashion with your own power than the previous administration ever would have done And as I said knowing her characteristics from her tenor does the head of the Fed It could well be likely that this is another form that the Federal Reserve could give that That idea of a very lucid Accommodative stance going forward for the fairly still uncertain period ahead to ensure the economic recovery What does all this mean? Well, ultimately a lot of this then Would be supportive generally of equity markets if the Fed do tweak the language That's a little bit more Accommodative of pinning it down to certain economic metrics if they change the average maturity further out if they kind of a lesser Let's say bullish in a macro economic forecast which supports then more dovish actions from the central bank and if there's Conversations about reinstatement of some of these emergency facilities because they're prepping up for them to transition with Yellen coming in I would see weaker dollar higher equities Under those types of scenarios So that's how I'd be interpreting things as we go further forward But we'll get very much more into this as we deliver this live later on amplify life Finally couple of things you had the API all of the trees last night. They really had no Lasting impact. There was a momentary blip on the downside and then we move back higher the headline crude number of billed of 1.973 million that was a little bit bearish hence that initial reaction Cushing a draw 165,000 gasoline billed 828,000 to still a billed 4.762 million. So not really too much there To speak of really So we'll wait for the DIYs later, but as I said crude is trading around technically some interesting levels at the moment And just as we've been talking we've seen a further extension of Some of the movements key metrics coming out this morning. This leads us on to the calendar So you just have the French services PMI come in at 49.2 49.2 Expectations worth of 40 that is a phenomenally strong French services PMI number and again, don't forget This is for December So people analysts were expecting a very depressed number given the fact that we're in a fairly stringent knockdown at the moment across France particularly the capital manufacturing in the French flash PMI for December came in at 51.1 And that's above the expected 50.1 So awesome French data there and it's really fired up in the market as you can see here So the euro look just to give you an idea of the type of speed of reaction If I stick this on a one-minute chart, you can see just as we've been talking here in the briefing the euro is just bounced higher here Nice nice move breaking above then the early European entrance high bit of resistance being found at the R1 at the minute And that is quite a key area. You've got the previous High that was seen on Monday just above there at the moment And this is an interesting area actually for the euro if you look at it on the performance This is going back through the month of December here The euro is right up there at the moment and around that 122 handle So we got the R1 you got the weekly high that was printed on Monday sitting just above And then that takes us back to the third and fourth high on a daily chart. What's interesting here is You can see we just continuing to to break out of what is quite a key area of which for the euro then Does mean that if we can really punch above today coming days this area It really does mean that potentially this on what upward trend can continue over the medium term Certainly that would be the view of most who anticipate euro dollar to trade higher in the coming months and the persistent Dollar but intraday key level of resistance here being tested at the moment in the euro and you can see European equities loving it And rightly so the French number that is Fantastically strong on the service side against expectations. I don't think in my 14 year career I've ever seen a 9.2 beat over Expectations but there again, we're in a different unique era in the post pandemic world And these numbers the variants of them are particularly large at the moment so the DAX has Catapulting higher you can see really with an injection of that the German numbers haven't yet come out They'll come out half past but usually the way these PMIs work is that if the French numbers very strong the German number Usually then people trade that ahead of time positioning for equally a strong number And you can see here in the S&P it's helped as well technically We were knocking on the door of that The weekly high on Monday and that range restriction of price that we had and you can see it's just Popped on the upside there through that level and up to the next area of technical Response which is around 9675 which brings in that previous high on the 9th and that range support that we had Through the 9th and the overnight session. So yeah, it's some quite bullish news here in the PMIs this morning We got the UK PMI obviously coming out later And then you've got the US PMI also coming out So another interesting chart to watch today will be for those PMIs You know if you think about it if all the PMIs are not as depressed as perhaps people might have thought Remember these are flash December numbers if stimulus does get delivered And we have no more hiccups in the vaccine situation if Brexit gets delivered You know, these are these are very Positive catalysts which largely have been priced in by the market But confirmation of them will probably see a bit of an extension on further relief And it'd be interesting to watch as well the crude oil market If optimism generally is quite strong We get some more positive signs on the stimulus with the US and manufacturing service PMI follow suit in What's likely to still be a fairly cautious Dovish sounding central bank in the Fed. This is kind of the perfect Kind of semi Goldilocks scenario that could see then oil as well Breakout above this key area of resistance to push on certainly to trade at a 48 handle in the near term All right, I'm gonna leave it at that actually the full calendar is available on Amplify live Remember, we've got our guest speaker later Who is this chap here who just happens to be my brother Matt? So Matt started his career working at RBC and investment management. He then Was a trader for a US proprietary trading firm He then started what is the world's leading squawks service And now he is the CEO of a fintech startup called I push Paul So he's gonna come on he's gonna have a really great chat a lot of questions at the moment about these rich tech valuations But he's really got his finger on the pulse of a lot of emerging technologies and companies that might be exposed to those types of things on a single stock Perspective so really look forward to having a chat with him with the rest of the community later on today All right guys, that is it. Have a good day ahead and I'll see you on the live stream. Thanks very much