 Okay, very good morning to everyone. Hope you're well. It is Thursday the 17th of October Going to go straight into things Have a look at the charts and then go through the headlines Obviously a focus on Brexit as we get that European Council meeting happening and there's a lot of information journalists tweets and rumors and so on about the likelihood or not whether the British Prime Minister can secure a deal and then the next obvious hurdle being can he get it through Parliament and So we'll have a look at that and potential reactions and timings around those events today Also, we had the oil inventories last night We had a couple of earnings reports last night as well IBM and Netflix quite a varying response to their numbers IBM dropping about 5% Netflix spiking about 10% on the upside at one point and then we'll have a look there's a couple more earnings reports and some significant economic data as well coming out later today, so First off looking at the general charts this morning really It's the the currencies and and the pound that's seeing some of the the biggest movement this far and you can see if I look at The center top chart. We've already had a fairly Aggressive move to the downside keeping in mind though that we're coming from a very elevated starting point So that does need to be put into context Cable down about 55 pips But you can see here about an hour or half ago or so the the pound saw a quick blip lower This came on the back of the fact that Apparently the DUP Arlene Foster not happy with the deal And obviously this had come with a string of positive comments about potential of a deal getting done in time Before then that technical kind of legal deadline that Boris has to then formally request an extension Which would be still on the table for this Saturday It's a bit of a pullback But again, you can see already having spikes the best part of we were trading around 128 33 to 27 73 so a decent decent 65 70-pip move the markets already bounced another 40 pips on the back of that So really does kind of sum up the trading conditions for sterling I think unless you were really locking in a bit more of that longer-term positioning Where you know here are some technical levels we had marked out before and As people were capturing some of the long activity going back from when some of these original headlines were circulating First target one would have been kind of around that area. What was then the near-term high scene towards the end of September? We then had those previous ellipses because this chart is really unchanged from where it was a few days ago That was the kind of obvious next point on any breach of that level and we've hit that and that's where we're consolidating at the moment Then that initial high print from yesterday amid all the the volatility Lining up with that previous low on the 25th. So logically then just working through technically the same process 65 that's 29 65 would bring in that 11th of March low Then you've got the 130 handle then the bigger kind of prevailing high would be up at 132 to get up to that latter point. I'd say we'd have to see some kind of deal getting done in regard to Not just Europe. It looks like there's political will perhaps on both sides to get something done But kind of a little bit reminiscent of Theresa May Getting a deal done with Europe is only half the job You've got to bring it back home and get support in Parliament and with that current composition obviously Incredibly difficult for Boris to get it over the line Going to be mathematically quite tight to get the numbers that he needs. So We're going to run through that in a second. So let's get straight on to the headlines first and let's just Start with the fact that if we look at where we closed on Wall Street last night The Dow was down about 22 points. So slightly negative finish As I mentioned, there's a couple of earnings report Predominantly a negative day given the fact that we had some weak economic data, of course in the US Yesterday afternoon that coming in the form of US retail sales dipping by 0.3% You can see on this chart here of the last 12 readings of that figure It's the first decline in retail trade in the US since February mainly due to lower sales of motor vehicles building materials hobbies and online purchases and so Quite a lot of the reasoning the analysts are putting behind this is perhaps a little bit of reaction to increase fears over US China tensions just seeping into then The kind of consumer psyche and what otherwise has been a relative Better performing part of the economy in America comparative to the manufacturing side however on the same token retail spending could be a little bit tricky to measure on the September month in particular due to seasonal factors If you think about it, you had back to school Spending, you know, how much of that then might have if anything propped up the number and perhaps this could have been weaker But on the flip side, you had an early Labor Day holiday in America this year And maybe that have brought forward some of the spending to the prior month Which meant that it was kind of it faded out of This month because of that seasonal factor, which on a year-to-year basis would have been factored in the last time round So yeah, all it means though is the in combination with something else. We had last night, which was the feds beige book If you never had or never have heard of the beige book before Pretty much market reaction is out as it's entitled. It is pretty beige in its impact on the markets Yeah, I mean, I feel like I can get away with dad jokes these days Sam because I am a dad But the point being is the beige book if you've not heard of it before Basically, there are 12 regional districts that comprise of the entire United States of America These then would be Where these Federal Reserve or FMC board members come from they represent their own regional district And what happens is is that every region in America obviously in terms of its demographic It's composition in terms of how it creates its economic growth. It's very different You know taking California to the kind of Chicago area, obviously there Manufacturing to technology as a very simple way of looking at it. It's very different. The population is different And so on and so forth. So what happens with the beige book is that each individual area Reports its own underlying conditions and it gets summarized in an overall report So it gives us a bit of an interim update if you like as to general what's happening on the ground Across parts of America that does help traders formulate a little bit of a better opinion About where is the economy right now as to better position ourselves for what this overall Federal Reserve central bank might do as a decision Coming at the end of the month, of course And one of the take-home points in the beige book was that they said the US economy expanded at a slight to modest pace in recent weeks Which does represent as Bloomberg is suggesting here a mild downgrade By the Federal Reserve and its latest report card on the country's economic health Specifically, they said manufacturing activity continued to edge lower With contacts. So these would be contacts in the field if you like Reporting that persistent trade tensions and slower global growth weighed on activity no real surprise is there but does continue to kind of really Cement what is that thinking at the moment and why then although we've had some fluctuation in this figure We're back to a very much almost entirely priced in probability of a 25 basis point rate cut from the Fed in a couple of weeks time That's priced now for October at 88.2 percent and then for the end of the year We're looking at a kind of one and done for the moment Okay, moving on then let's have a quick chat about Brexit. What is the latest? Well, this is the latest headline I'm sure you've read it by now Brexit deal in doubt after Boris Johnson's Northern Irish allies reject current plan This did come after when I actually got on the train to come into it this morning It was all Possibility of a last-minute deal getting over the line, but then the DUP issue a statement this morning It's it's thrown cold water over that potential scenario to give you a bit of an idea of what's going on here and what the the DUP are saying there's basically three points of which they've Raised as concerns one new arrangements for dealing with customs checks on goods crossing the UK Irish border to Mechanism for giving Northern Irish politicians a veto over these arrangements and then three a lack of clarity on how to Institute sales tax in the region which was one of the Areas were said to be still being worked on at the moment as this summit gets underway in a few hours time So why is this important? Well? It all comes back down to you remember when Theresa May came back with three attempts to try and pass her Withdrawal bill through Parliament which obviously failed quite miserably But at the time we were talking about the arithmetic of Parliament now remember even though Boris has come in and popularity of conservatives Has increased without a general election the actual composition of the Parties and their representation of MPs remains largely the same and so he does still face a number of Challenges even if he does manage to broker a deal and I'm gonna post this link now into the trading live chat room I'll put it onto the comments section on YouTube as well But just a very quick run through to give you an idea So once non-voting MPs are accounted for there's that magical number what we've heard many times before when it comes to any Brexit issue in Parliament. It's 320 MPs he needs to get on his side to win any vote in the House of Commons now last time Theresa May tried to get her deal through this would be back a few months ago She had the support of 279 conservatives So you obviously quite a far distance short of getting over the line albeit it did improve incrementally each time She brought it forward now couple things though is that obviously Boris Johnson has expelled a large group of MPs and his party back in September after they back legislation blocking a no-deal Brexit So some of those numbers may have changed but also as a result there are question marks against 19 Formatories who previously backed May's deal on top of that Number one deal backing conservative Chris Davies lost his seat as well to liberal Democrats in a recall election That leaves then Boris Johnson still around 61 vote short. So then you have these other people The Gorkwood squad which is referenced to the justice or former justice secretary I should say and The deal here is about whether or not they'd want to come back into the fold and support Boris They were very anti no deal But the fact that if he can't get a deal did they then fall in line? So definitely not a guarantee but a possibility if they do want to come back in and have any kind of personal political Relevance then perhaps they need to start supporting the government That would be 19 as a figure then there's obviously there's the Working majority at the moment of the conservative government backed by the DUP's 10 figures Crucially, but we've already heard from them. They've said it's a no-go for the morning They wouldn't support his proposal in its current form then you've got what would be the self-entitled Spartans which is kind of this idea of The likes of the Steve Barker a Euro skeptic senior kind of influential member within the The whole idea of it's getting a bad deal with Europe and unless we get something very strong Then we should have this no-deal threat And the idea that it's kind of them against the world trying to save the idea of Brexit There's been some actually pretty lukewarm comments coming out of Steve Barker and he is really Absolutely crucial to this getting over the line because if he goes for it being the leader of that group Which represents roughly about 28 people so significant? Then the rest would probably follow He did say that he would tolerate basically the the current construction of the deal that they're doing and then there's labor and There's a potential 21 pickup Obviously may was was banking on the fact that a lot of people would have crossed the floor and voted with her But she really struggled on that front Would you get any that would do the same this time in order to get the deal over the line not liking the kind of direction that The Jeremy Corbyn is going in then you've got independence other MPs, but as you can see It's such a tight call and so much rests on so many different factions of how Parliament is so split at the moment Even if you get a deal That's only as I said only half the job the idea then being can you get it over the line will be key in the dup's comment Which we had this morning has really cast a lot of doubt and hence why you've had a bit of a pullback So one thing I'd say with Brexit going forward for today, and I'll leave it at this is that Really you need to be on top of Twitter. So, you know the usual suspects Peston Coonsburg all those guys what I would do is you know go through make sure your Twitter feed is absolutely up to date with all of the Major political journalists from both sides the Irish newspaper like Tony Connolly of RTE But similarly, you know, don't just rely on the big guns like Peston and Coonsburg There's lots of other political journalists you can pick up on Twitter And they will be adding good value throughout today from a timings point of view Because this is going to be a very fluid situation So I think there is going to be more potential seesaw price movement to come here is the timetable for today's European Council meeting So all of this is Presumably an hour ahead. So if we're converting this to London time, it's going to be around 12 30 when we have arrivals 230 then and second arrivals the round table begins at 230 with the press conference time to be confirmed They then hit the ground running first thing tomorrow morning to get it underway throughout the entire day First topic on the agenda, of course is Brexit. So there's also going to be probably the likelihood of some rumors coming out during those meetings, but my my kind of experience of having lived through multiples of these over recent years is that probably Late late afternoon evening because they'll be working all the way up to the last minute That's when you might get this kind of latest broker deal type headline if there is one to be had Or a concession or a complete breakdown Type of information. So as much as being agile throughout the day I think you've got to be you've got to then update then you're trying to duration of your trade strategies Because there's a real Risk of high degrees of the market just flipping on itself But then late afternoon we have seen many times before the big headline can come when you get a much more cleaner Longer lasting direction move. All right Moving on We did have a bit of a down-tick in WTI crude oil last night. I'm sure Sam will have a look at that. We saw crude futures WTI move from around 53 29 Decent 30 Overall if you take the Asia-Pacific move decent 50 cent decrease in prices it came after quite a whopping and Surprisingly large headline crude build of ten and a half million biggest build since February of 2017 The street was only looking for a bill of three million Cushing bill 1.6 gasoline draw just have a million distillate draw of 2.9 million Analysts were expecting crude inventories if you remember the briefing I was doing on Monday I was talking about Expectations in the market were for the fifth consecutive week in a row of builds and obviously that now has been snapped and hence Sorry analysts were expecting crude industry to rise for the fifth week in the road They did but this degree of which they rose was particularly high In that respect now is the point I wanted to make and so much stronger than expected So exerted some quite aggressive downside force on the price So you need to take that into consideration when we have the DOE's later room final reminder with the oil figures with the DOE's because of the The holiday that we had Columbus Day on Monday in America It means that instead of usual 3 30 p.m. London time release. It'll be at 4 p.m. So don't forget that always the case when it's delayed by a day The earnings reports. I'm just going to brush over these as I said IBM fell about 5% last night There was some expectation or hope that their kind of technology acquisition and integration of red hat Could have helped boost their results, but it was fairly lackluster Their third quarter revenue fell again about 4% for the fifth period of decline now So they continue really to struggle on the flip side though one of those fang names, of course Netflix I mean Netflix have had such a rough time of it in recent quarters the bar I think was set pretty low There they missed their forecast for subscribers for a second quarter in a row But perhaps not quite as bad as some were fearing because of the context now of the new competition We know that they have in the form of apples streaming services and Disney Outside of the US though the company reported 6.3 million new subscribers So outside of America that was actually quite a bit stronger than expected where analysts were looking for 6.05 million So perhaps then kind of the lesser dependency and more Reaching out to a bigger global audience was also seen as a net positive Their shares up about 8 to 10 percent last night on the earnings front Who have we got today because it continues at a pace for more companies to report So going back to the document and I will share a snapshot of this later Now the biggest companies to be aware of you got Honeywell fairly sizable about 127 billion market cap There'll be a one or excuse me 1130 EPS expected at two dollars and eight cents um, otherwise Philip Morris Might be worth keeping an arm pre-market midday EPS expected at one dollar thirty two But that's pretty much it I mean there are a few other notable names like Union Pacific Morgan Stanley But no I would say ones if you're trading the index future that are really going to initiate and spark things to life Um, apart from perhaps Honeywell and Philip Morris is worth keeping the ear out on the squawk for um calendar wise What's coming out today because there is quite a few different things to keep an eye on for the uk obviously you've had Uh jobs updates. We've had inflation updates now looking for retail sale updates And the expectation is actually for an incremental improvement from the prior month from a contraction Um in august to september being flat month on month. So that date is coming out in an hour's time Again any trade on the back of retail sales if at all I would suggest being pretty prompt in wrapping that up Just giving yourself that you wouldn't want to be exposed to a potential breaking news comment where the market Really is much more focused not on the economic side of things But particularly with that council meeting happening and all of the relevant officials Gathering, I would say, you know, brexit is the by far more dominant force So retail sales could be interesting. I don't think it's going to be market moving though given that given those reasons Later on this afternoon, u.s. Housing data starts building permits coming at 130 alongside the regular jobless claims Also quite interested to see the performance of the fiddy fed Uh business index just generally that in line or alongside I should say the industrial production and cap utilization out of the us at 215 p.m Should be particularly interesting to just get the latest again health check on the on the us And then the oil inventories at 4 p.m The council summit as I said will be really kicking off officially from about midday And then you've got feds evans the sole fed speaker today Alongside bowman both at a conference at 7 p.m. Later this evening And the deputy governor of the rba speaking much later at 9 p.m. If you're sticking around late or training the asia pacific session Okay, that's it for me. Let me quickly hand you over to sam Look at a few things from a technical perspective, but I wish you a good day. Thanks very much Yeah, guys. Good morning. I hope we're all all doing well and uh a good First half of the weekend and just having a look over I'll have a look over the dollar pairs and the dollar index just back to flat for the day after drifting To the upside this morning the the Dixie now back to pretty much where it started and and on the flip side We've just seen a bit of euro strength Here as we come up to what has been a pretty key level over the last couple of sessions just looking from yesterday's higher the agent session higher now the european as well around 111 30 so you've got to keep an eye on that for sure um I actually had some orders waiting down around the pivot So the higher the morning Also, I guess this makes in the in the well there way there at 111 Uh, I think quite come in and you can see the reaction really from there has been a decent push to to the upside I'd still keep an eye on that level because it will course Around here. You've then got another high from uh yesterday around three o'clock So a bit of a zone there if you'd like to perform 111 uh on the futures Be keeping a close watch on that now. We've had the the low of the morning as well I'll probably would be looking to get uh a bit of a trend line on here as well Just to see could if we do come back down Do we get a third test of that certainly over the last few sessions? I mean look here. It's just really decent push to the upside Of course nothing to right now get our Get ahead of ourselves because obviously the euro has done this before this year Only to come crashing down and and make a new low for for the year But it has been a decent run here and above these highs from the morning work We've been looking just looking on the 240 now You've got quite a few highs looking back from the the 20th of september and the days before that as well So there's still room for it to go before I guess you would hit a really really key resistance point Which I know people would be looking at just above today's r2 around 111 50 reason for that Just because you've obviously got the lows from here 23rd that looks very much like a ECB announcement Fed maybe um and then these highs here as well. So you were maybe a bit more to go. Um, I think for now We could easily get that level in the next couple of sessions. What happens around there Will be interesting the pounds Just been on a whirlwind journey as we know it's now back above the pivot It's it's a tricky one to to trade. I was speaking to just someone this morning Actually the euro yesterday they were saying save them They got in a couple of trades on the pound and Literally just getting stopped before it goes and it's a tricky market Certainly in these conditions A bit of luck of the draw being at the the desk at the right time may help some trades or a super level false breakout Looking to get in that because these markets are quite choppy Just having a look where we're trading now. Obviously, you know this area 28 24 is going to track people to come into To look to go short because of what was the previous support and the breakdown area While I would say you could expect a bit of resistance here I'm just not Convinced at the moment that a big move to the downside is going to come in without a real substantial headline Above that then you're looking at the asian session lows before we did get that breakdown around 6 15 So on the futures the the next resistance points 28 24 and 28 38 I'll be keeping a watch on as we get above there or if we get above there I should say again worth having on these trend lines and 129 hit yesterday 900 ticks since that low Not too long ago incredible to the downside as well. Obviously we just made the low From An hour or so ago 127 73 Like with the euro Is there any trend lines that we can get on mark those up as well? And you can see pretty well respected going here from the low the 14 15th Yesterday morning little folks break through that and then again here as well So perhaps, you know the opportunity to the downside from a technical point of view really kicks in if we were to break this trend You can see 28 24 This has been tested to the tip almost 28 23 You'd expect obviously like I said a bit of resistance around that point moving over to gold At 1492 looks like it's finally stopped working I know there's the spike higher coming off that the poor retail sales numbers, but Just going back to any previous session You can just see the importance of that area and it had offered really good Support or resistance that seems to be just waning a touch now So I almost looked to get rid of that and 1490 I guess you could argue with the pivot low from yesterday evening Is it is a level to the downside the failure here to to get above yesterday's High could be quite key So are we keeping a watch on that and if that is to drift down No harm in sort of dropping it down to 15 minute and sort of seeing where the previous resistance was As well so gold, I know it's not the right time of the day, but technically Looking okay from from certain opportunities and Whether we can get higher and if we do Even then 1500 is is a key resistance point and a failure to close above there since well the 11th So what's that? Friday morning and we obviously came back down since then so some key points above where we're training for gold and also Below before we would get potential tests and you can see again 1480 We just can't get below that Over the last few sessions as well other than the original push lower the beginning of the month So gold set up quite nicely and I was you know saying to someone this morning as well I changed my medium-term view on gold almost daily It's a tricky market And I'm just not convinced which way I want to want to be positioned on this Especially with stocks pushing high and like they are doing right now Euro stocks and the DAX as well like in this morning Euro stocks above the pivot and the DAX nicely above it as well that in turn Just dragging us equities higher hitting pivot now in the s&p Relatively small range yesterday. It has to be said you can see again that what was the range yesterday working superbly now And one two three four tests of that could be a little opportunity to get sure if that was to break I'd just be aware of the original high that we had from Tuesday And then to the upside bit of a mini range 2992 before our one could come in so again quite technical quite a small range however though for The s&p so far Be keeping a watch on any potential trend that could come in around that high as well But the pivot for now holding that up the The range in the nasdaq yesterday. We came back down To test what was Tuesday's high to the tit perfect opportunity to to have got in and see this reaction here is that the nasdaq Report the earnings and we've then tested the top of end of that range as well. So small ranges and equities Can we get a push higher if the DAX was to break? Yes, there's high on r1. You've got to imagine the top end of these ranges have gone as well oil Um, you can see a decent move to be fair for the the api usually I'd say it's a bit bigger than average. It has to be said and and we have uh drifted lower Although pivot worth keeping an eye on also 53 23 the the breakdown area Which was the higher the day before the api came out. Also quite a key resistance point You can see let's make this chart a bit smaller. Yesterday's high The day before and the evening before that's really really good price action here around 50 Well, let's call it a zone 53 64 to the top part of that 79 We're keeping a watch on that of course with the DOE's coming out later We are just Creeping to the upside in regards to the lows at the moment We keep having this on as well one two three For the trendline breaker that potentially later is a good opportunity to target those lows where the trendline Had started so the meet key point up around the 53 60 area this trendline pivot and 53 23 As well as usual any questions, uh, please, uh, do let us know T-notes boomed just coming under a bit of pressure as stocks like in the morning The yen following suit as well. And actually the yen is not far away from What could potentially be a triple bottom on the hourly chart as well? But like I said, any questions, please do Let us know things are starting to get interesting in terms of coming to technical level So that you guys trade that but I hope you all have a good trading thing