 Okay, very good morning. It's Thursday the 2nd of July. I hope you are doing well Just a quick word before I begin showing you my screen here amplify live Which is our rolling subscription service that we run and the reason why I'm pointing this out is because today Me and the team will be covering US non-farm payrolls live this afternoon Obviously coming out today only to the market closure on Friday for US Independence Day this weekend So I'm going to drop the link to this if you want to check it out It's not just covering payrolls live, but you get exclusive access if you are watching this Recording on YouTube then you can get first kind of viewing of that briefing I do every morning earlier on here You can also get some daily updates from Sam ahead of the US Open end-of-day trade reviews as well as Sam's going to Be doing a private masterclass webinar and we have one every single week with different members of the team as well So as I said, I'll pop the link in the description of this video to check it out if you are interested But otherwise look, let's get straight into markets and and have a look what's going on today and kind of a relative Flat open if anything holding on to some of the positivity that was emerging yesterday You're given some of the early trial of experimental coronavirus vaccine from Pfizer and BioNTech I'm showing safe Showing that it is safe and prompting patients to produce antibodies against the new virus that and as well as Generally speaking an ability for the market at the moment to look through the fact that corona virus daily cases in the US topped 50,000 for the first time again That's in one day record in the three most populous Areas or states in America being California Texas and Florida so markets continue to overlook that for the time being But not only did you have the the positive drug developments? You also had some further Forecast kind of generally beating Economic data the ISM manufacturing PMI coming in above that key 50 threshold stronger than expected ADP a little bit below Expectations but a sharp upward revision to the prior month a swing of some nearly 6 million to the upside in that revision So overnight in Asia generally things have been relatively positive And therefore in the index futures this morning the backs is up about 147 close proximity to the high that we were trading In the overnight session from yesterday so worth keeping an eye on that And then in the US index futures and as that got 40 the S&P up about 10 at the moment to go down about three bucks T-notes pretty quiet overnight not too much going on there Relatively flat up just one tick in the currency markets the dollar still remaining fairly Depressed and that following the downtick that we saw yesterday with some of the positive moves seen elsewhere and resentment So major currency pairs remain a fairly elevated Neuro-dollar not too far off then the high that was seen yesterday afternoon just coming up to into ward the one 13 handling the futures in cable Currently sitting at around its highs at this present point in time oil markets again pretty flat So despite the the infantry figures that we've had Still being somewhat Counterbalanced by the idea of potential implications on the demand side given the coronavirus developments particularly in the US at the moment kind of leveling things off there in the crude market So at the moment sitting pretty much bang on the $40 handle So just very marginal gains and just slightly breaking above here the overnight Asia Pacific high, which was also an area of Resistance that we had in the afternoon period of yesterday. So worth keeping an eye on the price activity here And at the moment oil and inequities seemingly looking quite correlated once again on this general risk appetite play So, yeah, I mean, let's just have a quick look at different things then a couple of news stories to cover as I said Quite a lot of people were looking at that that drug news yesterday I was off the desk But I mean I did see at the end of the day Pfizer shares were up about five point six percent The bio intake shares in Germany rocked about twenty percent The companies for a little bit more detail for those who weren't in the market yesterday They're evaluating at least four experimental vaccines at various doses and we'll pick the most promising one to move on to the next stage of tests Which may start as early as next month and we're involved in a much more wider scale as many as 30,000 patients I think this last testing was more like sub 50 so as ever Markets particularly sensitive to this type of information. We've seen this multiple times before whether it's Moderna whether it's Gilead Sciences Markets have had this a kind of knee-jerk reaction Interested to see where we go from here because the idea being that you know They've still got to go through multiple stages of testing before it would become anywhere near something more conclusive In regard to a more effective solution for counteracting the spread of COVID So markets still at the moment fairly very positive and obviously today We've got some major economic data in the form of non farms Which will which would certainly be Interesting to watch whether it follows suit with some of the other data points that we've had Other things then that have been happening if I'm just running you through the headlines from this morning We did have the FMC minutes last night. So, you know, if you look at your charts There's not really a great deal of reaction here to be honest and as per the nature of minutes They tend to be fairly dated but the Fed malls explicit forward guidance stays wary of yield targets So The Federal Reserve official showed no readiness at their June meeting to commit to yield curve control Which was quite a talking point at the time but did reveal an eagerness to provide More guidance basically going forward and probably the reason for that is I think they've got it on this this article Actually, I mean if you look at the forward guidance from the Fed at the moment I mean it's just a mess because things like the dot plot is is pretty much Render redundant because of the fact that it just really doesn't tell you a lot at all I mean, it's basically telling you that rates are gonna stay low through 2022 which was obviously the headline at the time of the the actual rate release to dissenters But definitely the median is still to be a ground zero where we are at the moment And then we get this big leap in an undefinable period of it being termed as long term Which is fine This is the normalization of rates at some point in the future But there's a massive glaring gap between what does the shape of policy look like between? Okay, the end of 2022 and then to the point of when we get back to more normal more neutral rates Let's say and so for more forward guidance as per what they were kind of indicating there Would definitely make more sense because the market's gonna need way more clarity than what was offered in those latest projections Which they issued so yeah, I think that was the interesting part nothing really too much else to really talk about on that There was an exclusive piece in the FT overnight Feds Boulard who is a non-voting member that tends to be quite a vocal chap in terms of his general view on markets And he basically was saying that risk of financial crisis remains warning of a wave of bankruptcies without public health Measures now I must stress that probably other than Neil Kishkari Who's the uber dove of the Fed officials but I was right there along alongside him? So this type of rhetoric I don't think is that surprising but again, I just wanted to bring this your attention This is the the COVID situation so Yeah, quite quite phenomenal really how quickly this has picked up and whether it's got to do with The acceleration of the reopening whether it's to do with a lot of the riots that we had remember just a few weeks ago The timing would fit in regard to that kind of incubation period Lots of different variables, of course that could have could have led to this but the point being here is that New coronavirus cases in the US now have topped 50,000 So this is in one day for the first time remember there were Medical advisors suggesting that in the future we could get as much as a hundred thousand in just a day And so yeah, the numbers continue to grow rapidly in the US and that's led to further Kind of stores coming out Apple there to reclose 30 stores in seven US states bringing the total now to 77 you remember they were one of the first kind of brick and mortar real Kind of big names to pour back on the reopening and so more stores there closing McDonald's is pausing as dining reopening plans for a further three weeks And then Houston's intensive care units now are exceeding for capacity in total According to the FT's analysis 43 US states have now seen their average daily case rates rise from a week ago So it's definitely a nationwide thing here But being led of course by I think from a population point of view if you were to take California, Texas and Florida Which are the three largest in in order you mean you're talking about about 90 million population So a phenomenally large amount of the overall total of the United States so definitely At the moment in short term at least it feels like markets are continuing to kind of brush over that I Guess you've got to continue though markets will remain sensitive to those afternoon updates for sure And I think this weekend is going to be really quite telling and I'd be interested to see How the market holds its nerve if it does finish on a positive footing today Given the extended long weekend in the US and the fact that it is independence day holiday and independence day holiday Does tend to lead to a lot of partying if you if you've ever been in the US at that time of year And so we've already seen these kind of snapshots of on Memorial Day in the US when people were you know Definitely not adhering to social distancing rules And so could we see all we're well we are already seeing an acceleration Across the United States is it going to be amplified even further by the independence day holiday? It's going to be a really tricky one for the authorities I think to handle and so dependent on what type of things are happening and how it gets reported over the weekend It might see markets get lower at the reopening of next week's trade if there are these photos of mass gatherings and you know pool parties and people on the coast just hitting The beaches and these sorts of things because again the likelihood is that's probably in time going to lead to more Confirm case spreading on an already accelerating situation. So yeah At the moment it almost feels like I don't think non-farm parallels It's really going to be too significant overall today and what we're going to see and as I said me and the guys will cover that live I'm quite interested though to see How the market opens on Monday, and I do have this feeling and if you actually look at the pattern We've generally gapped down at the reopening of each Week in the last three of around a range again I'm just going off memory here of around point six to point eight percent at the reopening of trade In say the Dow future for example So yeah, they'll be interested to see whether or not we break that mold and maybe gap down the lower Just given the fact that if we continue to push on market positioning being quite positive, but then if we see these quite Kind of updates that would suggest then a further pick up in the virus cases as a new week gets underway On the trade war side, there definitely are a couple of things You know the rhetoric will continue again markets are brushing this aside because I think they're of the understanding that look The situation is deteriorating domestically for Donald Trump This is reflected in the polls so he needs to ramp up his anti-China net rhetoric in order to kind of detract Then the attention away from him and on to China in terms of the core reasoning of why this virus took place in the first place So Trump has said he's not happy with China. He said he wouldn't comment on another deal This was coming late last night US House of Representatives passed the unanimous consent a bill imposing sanctions on banks that do business With Chinese officials involved in cracking down on pro-democracy protesters in Hong Kong So it's obviously follows that ruling that happened just two or three days ago And then the US is reportedly readying sanctions on China over human rights abuses something which has been ongoing for some time So now a few things to monitor there, but nothing yet enough to an escalated point to really phase markets at this point in time Going forward into the calendar then it is very quiet this morning Although we do have the unemployment rate in the US own producer prices These are not things that typically would move European instruments. So we look towards the afternoon And yet a little bit unusual to see payrolls on a Thursday But that's the case because of US market closure tomorrow in respect to giving people that long weekend for the US Independence Day So payrolls today the headline figures expected at three million. That's that's a positive three million And I remember ADP yesterday came in at two point three six nine million Being slightly shy of estimates of three, but again positive job creation And we saw as distinct upward division to the prior number Couple of things that I'm going to talk about with payrolls and why ADP might not be the most accurate indicator in this particular time Round from a range point of view on the headline. We've got a low of four hundred and five thousand to nine million so Either end of the spectrum would be positive growth jobs growth. So continued Improvements if you like from a very negative situation. We were in just about two months ago So in the midst of the lockdown Dropping the top and the bottom ten percent of payroll forecast So if you had that normal kind of distribution if you like Shape of estimates kind of chopping off the top and the bottom ten percent It leaves us more of a range of about once one point six five to five million Around that median of three if that helps the jobless rate is expected to Decrease so to go to twelve point three from thirteen point three percent Remember the Fed had projected that the unemployment rate they're expecting According to the summary of economic projections that unemployment will fall to nine point three percent by the end of the year So that's looking progressively like it's heading towards in that kind of similar fashion. However, I think it is worth noting that remember the the unemployment Figure has been kind of artificially made to look good by the underlying methodology of how Unemployment is then calculated because of this idea that people are being furloughed and the way it's kind of calculated that they're not technically Unemployed but they then might not return to the workplace and so on so if the BLS the Bureau of Labor Statistics fixes that what we call a survey error It's admitted to have made in previous months, which has reduced the unemployment rate by up to three percent It is possible that if that has been amended and they haven't really suggested I haven't read anything to say that is the case But if it has it could mean that we get an unemployment rate far worse Then what's actually expected it could add multiple percentage points to it So something to be mindful of also as well something just adds a little bit more Makes the makes the water a little bit more murky and trying to read the quality of this data in non-farms is that benchmark revisions Diminish the usefulness of the ADP survey because it has you know as it goes through these these kind of Usually the annual benchmark revisions then it can mean that the numbers being reported in ADP aren't necessarily Reflective of the underlying situation Again more the idea of some technical tweaks to how the data is is comprised And then we don't have a full set of the usual economic indicators We would normally see and let me just flash this up Now one of the main things that we look at going into non-farms as to ascertain a better more accurate picture of the underlying job situation in the run-up to the reference period that would be non-farm payrolls is the PMI reports and the ISM Non-manufacturing PMI and remember it's a non manufacturing one which is particularly telling at the moment because it's been The hospitality sector which has seen this massive decrease of jobs and it flashed back quite strongly In the last payrolls report, you know, it's kind of those those jobs more related to the lockdown In that respect and particularly lower paid jobs, which has has implications for the average hourly earnings as well But the services ISM will be released after the jobs report So there's a little bit of a degree of uncertainty then around projecting what you think payrolls is going to come out today so I mean otherwise If you're looking elsewhere, little jobless claims continue to fall very slowly numbers continuing to track above a million I guess a sweet spot might be consumer confidence. We saw was much stronger than expected In terms of the manufacturing PMI the employment subcomponent Recovered from 32.1 to 42.1 in june But was disappointing against expectations as well. So Yeah, with payrolls Yes, as ever it's going to cause a little flurry of price activity Yeah, I'm not I'm not sure whether markets will What overinterpret it in order to then drive direction beyond what is today's session I guess it's the point i'm trying to make I think what becomes Evidently more important is the developments of the the covid virus over this extended weekend and particularly given the risks surrounding the fact that the 4th of july celebrations could see Really the authorities control of handling then social distancing put under extreme pressure Which could then help accelerate what is already a worsening situation with the virus So look we'll cover payrolls more sam's obviously going to jump on with alex and tim and some of the other guys And we'll look over the market for much more of a A technical point of view of how we could execute across different scenarios depending on how payrolls plays out But for the moment Things relatively positive at the open. The Dixie is is testing. It's low from yesterday So keep an eye on those major pairs. Euro's just testing up at around that high that we had yesterday short of the 113 handle And you've got cable up at around highs equity still tracking Higher for the time being and an oil kind of following suit with that general Overall sentiment. Okay guys, that's it. Any questions at all feel free to drop me a comment on the video Happy to help as always and if you're in america Stay safe. Stay well Be sensible But enjoy yourself over the extended long weekend and i'll see you guys on on monday. All right. Thanks very much