 Okay, very good morning to you. Hope you all had a fantastic weekend. It is Monday the 20th of July So a brand new week and a look ahead then are some of the key things for you guys to be aware of Let's just start before we get into the EU commentary from the weekend as to how markets are behaving at the open today and Despite some of the deadlocked headlines that we're reading in regards to those EU Meetings over the weekend the euro is actually trading higher I'm going to get into the details there of exactly what's been happening because they've been Discussing and negotiating all weekend, but the bottom line here I guess is the fact that look the talks are not off completely and despite some resistance from the usual suspects the frugal four in particular With focus on the Netherlands it looks like a deal or some kind of compromise is going to happen So I guess as a net result that is a positive And therefore no one really was expecting a definitive deal to be struck this weekend Remember what we were saying at the end of last week Just the notion of the fact that they're making progress could in itself Turn out to be positive for prices and that's very much. So what we're seeing this morning So the likelihood is here is that they're going to go into further negotiations and probably look to wrap something up Towards the end of the month So the euro is trading positive as you can see here in the euro futures We've managed to break above a kind of area of key resistance really for the week of last week Breaking up through the R1 this morning and on a longer-term chart. This certainly starts to get Particularly interesting. This is that chart We've been looking at for a while which goes back all the way to the summer price activity from 2018 the retest At the beginning of this year and some of the fluctuations around the pandemic that we had In the recovery But we've managed to bust straight through that that trend line and area and cluster of resistance And these are weekly candlesticks here They've been holding price for best part of nearly two months has just been broken now with a bit more conviction And so forcing a push-up now towards the 115 handle Which would be that year-to-date high as far as the euro currency is concerned. So I'm sure Alex some part of our team who's been pretty bullish on this setup for a while It's getting involved in that for sure So on the week definitely keeping an eye on how the euro responded around this 115 Any breach above that then obviously it takes out some of those relative highs that we're seeing going back towards the summer of 2019 and opens up then the prospect of perhaps a deeper or higher run up towards then the 116 mark Which would push us back up towards where we were towards the back end of 2018 All of that would also be contingent of course within the currency pair your trading obviously two currencies So ongoing stability in the market would be almost necessary in order to keep the dollar in check From a risk perspective and so that the euro can get some clear blue skies on the upside in the equity market You know just interesting here is looking at the the S&P 500 this morning And in the near-term price action given some of the market movement we had last week with a bit of roller coaster with the South China Sea dispute that we saw then the California rollback of the reopening Caused a bit of a dip at the beginning of last week before then the Madonna news came We gapped up and we kind of have gone sideways. So we're still in a relative range here I'd say as far as near-term price activity is concerned so that S1 level which is around 31 97 that does mark up nicely with the overnight Asia Pacific lows And also the lows that we had towards the the back end of last week that helped support price And then slightly below there at 92 and three quarters is that kind of weekly lows That's quite a key area of support to keep an eye on as we go further forward and not just today But this week and then looking on a daily though. What's so interesting This obviously starts to look at the much bigger picture This encapsulating then the whole year-to-date view and Where we are at the moment and if you actually look here in the top right-hand Corner where my mouse is now we are in fact just consolidating really between really the one 32 handle just below there 31 96 and 32 31 And interestingly then this is upside cap We've had at 31 and a quarter in the S&P obviously marks those high prints that were resistance back on the 8th 9th and 10th of June But where we are at the moment means that we are pretty much scratch for the entire year Started the year at 31 21 or right there and thereabouts and that's where we trade right now So, you know, it's just interesting given the size of the volatility that we had in March You know the Fed have done a really fantastic job at basically just killing off volatility with all the different and scope than breadth of Tools that they've used to intervene in this market not just from the traditional but the unconventional That as well with the various fiscal policies that we'll discuss in a second as well as kept this market To recover Despite the economic reality that's obviously impacting lives across the world and in the US for sure With the jobless rates do incredibly elevated the markets are exactly flat So where we go from here? I'd say as we have seen over the course of the last couple of days It does make sense to me that we're in this kind of phase of consolidation for the time being just given What's happened with the pushback up a little bit of that profit taking on the second wave fears has genuinely started to dissipate now Or be it the COVID situation is still under monitor Still in intensive care. Let's put it as a subject matter to to continue to monitor So this week really keeping an eye on the top end of that range Obviously any break break above there things continue to remain fairly bullish under those circumstances and you'd be eyeing the 3300 mark as the next kind of stop on any push higher on the pullback As I've said before I think in in some of the briefings last week I don't feel like we're we're going to see a catastrophic drop-off here Can't really see what elements can happen to instigate that type of move although we continue to monitor not just COVID But the trade war but even with that we've seen some quite intense Escalation and it hasn't really impacted the markets a great deal So even if we did break the near-term range, I'd still be looking for support down at 31 19 for this week And then in oil markets the final chart. I just wanted to have a quick look at we remain in pretty much the same setup As we have done throughout the last week or so if we look at the daily And that is that that squeezing in on that key 41 level on the upside From that March gap down that we had on the failed OPEC meeting. So Here price was really unaltered by the JMMC meeting and that Fade kind of rollback of distrigency of some of the supply cut As was though largely anticipated And so again continue to kind of put this in context of really what's driving this at the moment Is the fluctuation of a general sentiment about the economic recovery at this point? But technically that 41 although was broken last week momentarily is still under again Observation this week is as a key level to keep an eye on All right, well, let's get into some of the headlines That's kind of the overview of the charts and let's talk some some of the news and starting off with this European situation so the European Council president Charles Michelle proposed that the fund should include 390 billion euros of grants with the balance made up of low interest loans So that's the latest out of this morning a French official has said that the delegations now do see a path ahead for a deal and Talks are due to recommence at 3 p.m. London time today So remember the original schedule for just Friday and Saturday. That's now rolled over to Sunday. That's now rolling over to Monday So they've doubled up On their time dedicated to this which I think does show a lot of political will in order to get something done today And probably says a great deal about why then the euros Reacting in a fairly positive fashion this morning breaking this down then the Dutch Prime Minister Mark Rutt and his Austrian counterpart Sebastian Kurtz Rejected some of the new offers that were tabled at the weekend and stood by a pledge to limit grants to 350 billion euros So again right at the center of this debate is this idea about non-repayable grants So remember if you're of the frugal four you do not want to be handing out money willy-nilly Into countries without them being paid back So they've been more going down the avenue of trying to decrease the grants and look at look We're willing to help but it needs to be in a loan-based format that we eventually would be paid back Which obviously is meeting resistance from the likes of Italy for example So the frugal leaders on on Sunday basically proposed that amount should be cut back to around 350 billion This would be a far cry from the original 500 billion that had been tabled in the original plan As well as the Franco-German proposal, which was circulating back in May Most diplomats see and predict a final figure around 400 and hence the reason why you have that European Council commitment number this morning Around 390 so again this looks like the compromise. They've basically gone from about 500 worth in grants frugal four came in They wanted 350 they've now met somewhere towards the middle coming up towards 390 So again though the idea being that look it's not like there's going to be no grants It's just a slightly smaller amount But compromise is everything and they've managed to get a deal looking like it's going to go over the line One of the comments that I saw from an Irish political editor In terms of timing was suggesting another meeting potentially either next weekend or on July 31st And again, that isn't that surprising There was really no one was looking for a real one-and-done type meeting to get the whole entire terms around this deal concluded But as I said, it looks like they're now kind of honing in on the sweet spot that would keep all party members Satisfied from a European wide basis. So continue to keep an eye on this Of course, but I think the reaction kind of says everything this morning So euro higher the tax really has been relatively uninterested, but the Bund has backed off a little bit here It's just dropped down through Breaking the the highs that were seen towards the back end of last week And it's just remained under a bit of pressure sub the one 76 mark now as I as I speak Elsewhere I was going to quickly comment on US politics because as part of the calendar for the for the kind of week ahead This does pick up pace once again So policymakers will resume contentious talks About the ways and forms of which they are currently implementing stimulus in their country And this comes as much of the stimulus that they have put into place as part of the proactive response to the COVID situation and the Huge downturn that's been seen in the US economy comes up for exploration And this does raise some interesting questions then Republicans and Democrats remain a standstill on a number of these key issues Including whether to include a payroll tax cut. So if you actually look there's a bit of a Combination of looming deadlines towards the end of July early August Where and need with this graphic on Bloomberg? I did share it on my Twitter account this morning, but it looks at what's ending and then basically what's at risk? so for example Households about whether or not they can pay next month rent and you know, there's estimates to be around 20 million households which would be subject to potential difficulties under those circumstances if some of these these these kind of short-term legislative processes come to a conclusion 116 billion dollars worth that was dispersed in June This is referenced to the amount of final payments That will come at the end of the month for an additional 600 dollars a week federal unemployment insurance And again last month's context that was around 116 billion that could vanish at the end of this month So there's a lot here to be done Some would say then that you know, you need this these types of Cliff edge scenarios in order for politicians to really start to take some action if none of this was to be kind of rolled over in any type of degree then obviously that would have implications for people's assessment about the The future trajectory of the economic recovery in the US So with that in mind you would think that the politicians on either side on Capitol Hill will come to some form of looking to to roll this out or Introduce some sort of new form of stimulus to keep keep the show going for the time being but quite interesting graphic here because such as with every Covid program that every government the UK Eurozone or the US is implemented at some point that has to stop It cannot go on forever And that in itself is quite an interesting juncture for the markets which have been predominantly supported by this Unprecedented level of monetary and fiscal stimulus. What happens when it ends and I guess with the monetary one They've kind of set the stall out for a number of years But in the fiscal side of things remember in a Western Market sense, you know politicians tend to be fairly short-sighted because they they serve relatively short term So they need to have maximum bang for their buck and the performance in economy is quite critical to their political fate So with that being said my logic would dictate then that they'll probably come to some kind of compromise to to keep Another of these programs ongoing until their economic recovery is more assured in its footing Elsewhere then the COVID situation. This was the US Things still particularly high on the COVID situation cases still north 70,000 on a daily basis I was looking at the weekend Texas joins the 300,000 case club So these rates obviously in the Sunbelt areas have continued to remain elevated One interesting thing that I was seeing this morning is I know this is a bit small to look at But this is looking at all of the individual US States and their reproductive or our rate if you remember in the UK you're watching those press conferences a few weeks ago Where Britain would every day update? What was the our rates and the key metric here was that this figure needed to remain below one? Now the virus is effective reproduction rate a critical point then of one Well, if you actually look at it This is actually got one two three four five six seven I've seen other reports that would suggest all but five of the US is 50 states is Is above one effectively meaning then that weighted by gross domestic product? About 95 of the US economy is affected by a viral reproduction rate That's greater than one i.e. meaning a cause potentially exponential rise in case numbers Now that in itself sounds quite frightening prospect for a market trying to fathom then the strength of an economy recovery because what we're saying here is that Nearly 95 percent of the entire US economy is being impacted by a situation where coronavirus at the moment is getting higher Not lower Now a couple of points here to act as caveats before we get to doom and gloom and that is that in the current wave The general lower levels of are so typically we've not seen levels go Go up to two above two three and so on like we did in the first wave We were as much more aggressive but a number of reasons really for that The age distribution of the infected groups has been younger the case Fatality rate within intensive care units has fallen this treatment has improved And don't forget just generally people are more kind of socially aware of this issue So they're able to act it and be more aware of the kind of Telltale signs of having contracted this Virus and so on so as a result political resistance to full lockdowns in the most severely affected states it's very much been a Key thing at the moment they continue to kind of press ahead and try to be very reluctant But as we saw with California last week and some of these other states like Texas under quite extreme conditions at the moment It continues to be something that I'd watch quite quite closely But as I've said before at the moment although that case curve total of confirmed cases in America keeps rising it's really the more tangible results of Going back into more extreme forms of lockdown that we had back in say April that would cause I think a more negative reaction in markets anything less than that I don't really see phasing things too much at this point going forward Elsewhere one other thing I wanted to mention was a few people have talked about a developing weather pattern in the Atlantic and Just wanted to add a bit of context. This is the National Hurricane Center. There's a Weather system hat that's at the moment just going over central Bahamas and central Cuba And it is heading towards over the Straits of Florida today and over southeastern Gulf of Mexico by Tuesday and across the central Gulf on Wednesday Obviously the Gulf is a particularly important area for any implications it could have on the oil and gas wells and refineries in this particular location. However, there's a 0% chance of a cyclone formation in the next 48 hours. So although this Has caused I've seen a few headlines It's unlikely to be a material impact to that particular Gulf region when it hits in the next 48 hours or so So just wanted to point that out From an earnings perspective just going to quickly jump over. I was tweeting about this at the weekend This is your earnings kind of docket for the week and What we have here are a few things. So there's 92 S&P 500 companies reporting this week and that eight of those being Dow Industrial components of the highlights here probably Tesla and Microsoft coming after market on Wednesday Will capture a lot of attention Tesla doesn't actually tend to perform in history as a guide That well in terms of its share price reaction to its earnings and particularly given the context of phenomenal Gains that their stock price has seen over the last couple of months. They'll be quite interesting one to watch Microsoft always as well being one of the largest companies in the world Twitter IBM A number of the major US Airlines reporting as well This week when it's been such a rough quarter for them being said to see their numbers and how that plays out Otherwise from a calendar perspective for today very quiet for today actually and for this week US data is particularly quiet That doesn't mean that there are a few things that I'll be I'll be monitoring. So for today, not too much is going on It's more focused around speakers. You've got ECB's to Gwendoz kind of second in command If you like under Christine the guard speaking at 9 a.m. This morning London time ECB's Lane later on this afternoon and then to Bank of England members How they the outlying I guess you can call him on the more hawkish side because he was reluctant to vote With the group for more QE at the most recent Most recent Bank of England meetings that we've had and then turn raro is also speaking. She's kind of Centrist slightly dovish of view. They'll be speaking together at a trophy select committee hearing Later this afternoon for the week ahead. This is what it looks like. So Monday's pretty quiet Tuesday We're going into overnight. You do get the RBA minutes UK public finance data Wednesday some housing existing home sale numbers coming out and then on Thursday Again pretty quiet advanced consumer confidence number at the Eurozone in the Bank of England speaker Haskell Friday really is the main event As far as the schedule is concerned. That's when we get the global latest flash PMI numbers So first chance to see the flash data PMIs for July So includes everywhere the Eurozone UK the US and just having a quick look at that This is what it looks like This is looking at the red line is the US the green line Eurozone the yellow line is China So China has seen the earliest and in some cases the most powerful recovery its number pretty much Tracks over and above all of the measurements In terms of the headline and its constituents against the US and Eurozone But let's just leave China aside for the moment looking at the US and Eurozone here We are looking for a continued recovery from these incredibly depressed levels, but Would I get Exceedingly excited about this not so much I'd definitely be more keen to see what the overall analysts ranges are and if we were Getting over and above that then sure maybe perhaps that's a little bit Assigned to get more optimistic, but anything short than that then probably not Looking at the employment situations. I mean these are ones particularly in the Eurozone which still Remain particularly depressed At this point in time so all the more reasons for them to get this recovery plan up and running that they've been debating all weekend All right, that is it from me any questions. Please do leave a comment in the chat Otherwise, I'll let you get on with your day and I'll see you again same time tomorrow. Thanks very much