 Hello and welcome to the CMC Markets non-farm payrolls Friday webinar on Friday the 6th of April 2018 Give me the time. It's just gone quarter past 1 p.m. BST British summer time 115 p.m. UK time and this is the non-farm payrolls Webinar special as always with all our webinars I'm gonna do is I leave the risk warning screen slides on screen here for you to ever eat through It's all fairly straightforward and essentially states that anything that is covered in this webinar It's only my own personal views and opinions and thoughts and comments And they should not be construed as explicit trading or investment advice While you're having a read through those those slides, it's all fairly straightforward Others that a quick chat about what's been going on in the markets and in terms of volatility in the last few hours It's actually very very quiet as always. It's not from payrolls. It's not from Friday. It's very common to see Little no activity or volatility In the run up to the actual all important jobs report, which are out in about 14 minutes In terms of the recent news obviously overnight They make a topic of the entire week has been the kind of the pending or a possibility of a fall-on trade war between the United States and China Yesterday China turned around and stated they're looking at They're like a retaliating in relation to the into the relation to the US US's Imposition on them and then overnight we've heard that Donald Trump stated That the that the United States are looking potentially considering another hundred a hundred billion dollars worth of Imports on Chinese products and this is sort of it. This is exactly how Fortunately trade wars work. It's sort of very much going to tit for tat back and forth And all in all and it's and it usually sends traders into into a bit of a panic And I'm often puts a bit of pressure on equity markets So granted when that was announced it probably would be the early hours in other time It would be kind of I think it's half 12 or half one happened in In the early hours of Friday morning in the UK What that happened? We did see a quite a substantial sell-off in the dark futures. I mean also Index futures of other markets are around the world, but things have recovered somewhat. They're not things aren't any means About any means Rosie, but they are certainly a bit more positive than what they were It would appear that the fear factor has evaporated somewhat and we haven't seen this as quite a common theme recently We're by the initial reaction is quite bad and it wasn't actually saying saying it's a different story because Yeah, it's worth noting that base for the time being it's all just talk The the move by China yesterday on the last 48 hours those tariffs Won't actually commit to play for about 60 days So that leaves a window for negotiation Whereby the United States and China can sit down and a chat about to look at readdressing the trading of balance between the two countries Speaking of trade yesterday the United States and trade figures out yesterday and the trade deficit Increased for a sixth month in a row and it widened to its largest level in nine and a half years. So Mr. Trump whether you like him or not has a point in that There's a very much an in balance of trading between the United States and the rest of the world And when you delve down into those figures, you can see that number one in terms of, you know countries or continents or Trading areas number one that is area that the United States has a trade deficit with is with China and number two The European Union and there you go. China is in the firing line and the European Union has been exempt for now But we all know what Mr. Trump is like He likes to start off quite brash and then he can actually Back down or make me have a have a somewhat meet in the middle and I suspect that's what he's doing I think that's what traders are kind of counting on to as well that the initial reaction sounds quite quite severe And then what you have as a job afterwards is a bit of a cooling of tempers and All this the two sides will come and be together like if you look at If mr. Trump appears to be a bit softer and after than what he once was now That would obviously the alteration to the to the NAFTA agreement would obviously have a bigger position about Mexico and Canada You sell a lot to the United States But once again if mr. Trump talks top initially that could get a reaction from the various heads of government It's a government in both in both Mexico and Canada And that's how mr. Trump will actually probably would rather do business rather than actually going down have the rude Have a full-blown trade war you probably talk like he's having it willing to go Like a full-blown trade war and the way he got carries on on Twitter He might get intentionally be giving off the impression that he is a bit of a loose cannon and and That and ultimately It's often met in the middle these things often these things can take quite a bit of time But the situation appears to be the common theme seems to be that move happens Any political announcement is made it is quite a large a reaction from the financial markets and the flip side of that Why you end up seeing is some spot of a cooling of tensions In relation to the to the non-famperals. Let's take a look here. I think our economic counter for those of you Don't know our economic counter can be found on the market polls tab, and it is the fourth option down Taking a look here we can see here at the headline figure. We're expecting you can see here It's it's it here you unemployment not from payrolls half one We could see here that we're expecting 193,000 jobs to be added in the month of March that compares with 313,000 that were added in February So a big step down but to be fair anything in around the kind of 200,000 mark is fairly good is seen as quite positive Economists have stated the United States needs to be adding at least 200,000 jobs per month Actually, you can keep the economy taking long So if even if the number comes in bangin line somewhere in around the two remark will be deeply quite positive Now I've said it before and other non-farm payroll webinars And I always put it in my market commentary and analysis on the day of non-farm payrolls The devil is in the detail It's quite common for the market to react solely to the headline number This which is the main number I just read out here everyone's focused on the 193 number But what we but there are several bits of information released at the same time this first of all this previous number of 330,000 for all we know that maybe we provide higher or maybe revise lower So that's something to keep an eye out for revisions to the previous month's number second second on the list Is the unemployment rate unemployment rate is tipped to fall from four point one percent to four point two to four percent And in terms of earnings, which is it which I think is a real real key On a multi-basis average earnings in the US is expected to take up by increased by zero point two percent And that compares the previous month's rating of zero point one percent increase and in terms of the year-on-year basis All the average earnings is tipped to increase by two point seven percent And that compares to a previous month's rating of two point six percent at my view the devil is in the detail and All the information the headline figure the revisions If there are any the unemployment and also the average earning figures they all need to be taken into consideration my view is that Traded the market often has an each old reaction to the headline numbers and then the other information sinks in and it's not unusual For the headline number to be say either really good or really bad the market moves in certain direction and there's a realization Oh, hold on things actually aren't as rosy as it actually seem, you know looking back at last month You know looking at over 300,000 jobs paid that a very rosy picture last month But then you take a look at the average earnings for example, and they were solid They were fine, but there were there were there were They were declined from the January figure And that was just that that kind of tempered the mood So don't necessarily get too sweet to swayed by the headline number because more often than not headline numbers get revised so the My view is that the report should be taken as a as a whole and then she fully digested numbers and then try conclusions from there What also is is worth is worth noting yesterday We had the US jobless claim since the people who were you were claiming unemployment benefit in the United States That came out yesterday as it does every week Thursday at half one that ticked off from 215,000 to 242,000 And that was a larger than expected increase. They're spending increased by 10,000 to 225,000 in the grand scheme of things It's fair enough. It's not good to say that not good to see that the Jobless claims rate ticked higher by you know nearly thirty-odd thousand But in the grand scheme of things, it's actually still respectable seeing as that the jobless rate in the United States is That multi-decade is near enough multi-decade loads a few a few thousand here or there isn't really gonna rock the boat a whole lot Turning our attention now To Wednesday's ADP private sector employment numbers We can see here that there are two or 41,000 jobs created In the month of March and the ADP private private sector employment role That was well above expectation. There's like two or five thousand jobs to be created It sinks in nicely with an economist view that the United States need to be adding at least 200,000 jobs per month in payroll and if you look at The the previous month of 235 so it's an improvement on the previous most readings well ever saw size things are looking quite positive In that respect so traders View the better expected of the ADP numbers took a look at the fire wasn't expected ADP figures. I realize that this is overall fairly good And this we can set the mood for today's non-firm payroll But if you take a look at the kind of the wider context of what's been going on in US economic indicators we saw the core PCE Indicator last week take up if you look at various different say Surveys in terms of customer in terms of consumer confidence They're quite high some of them are actually a multi-month highs or multi-year highs all their economic indicators such as Manufacturing and such as housing in particular are quite strong. They've come off the boat ever so slightly They're maybe not as high as they were Two three four months ago, but they're still broadly in quite good shape Bearing in mind the Federal Reserve raise interest rates last month the language of the Federal Reserve seems to be I think we could be heading that we could be looking at another potentially to possibly three more rate hikes from the Federal Reserve in 2018 but obviously today's numbers are called to be of major importance Johnny Allen the ex head of the Federal Reserve only said in the last 48 hours that she expects that we could see three or four rate hikes in 2018 that's all well and good when the When you're actually out of the hot seat, it's easy to give your views and your opinions as straightforward as that But it's I said that which is actually the case But also I say that because it's often seen Jerome Powell the head of the Federal Reserve currently is Taken over miss. Yeah, that is seen as sort of a giant yet You've seen as a as a person that not too dissimilar to Jan Yeah, and so if miss yeah, that's looking as commenting saying three or four rate hikes this year That could suggest that Mr. Powell is thinking along the same lines Obviously, he's not going to just fit in exactly with what the predecessor did But the the market is views him as summer someone along the same lines He's only a job a few months. He took over in February. I thought he's gonna be in any rush to actually kind of Roughly effect feathers. It's likely that mr. Powell is gonna want to actually just get his feet on a bit under the Under the desk and actually suss off the line the land for people before actually kind of going Before having any any kind of major terms Changes in terms of terminology in terms of terminology our language or tone We've got about two minutes left before we actually have the figures come out The Fed have stated that they are focused on the economic indicators I like I just said the economic indicators are broadly fairly positive You know this arguments to be said Four four right four four four rate hikes this year But there's also arguments to be said that four is too many as I keep going with keep going with the give The last couple of years only three rate hikes one minute left Wait for the numbers to come out for those of you either training platform by looking at the market pulse type here What you can do is if you Wanted an indicator to always pop up on your screen What you can do is this this alert here if you click that alert that means it'll be kind of permanently set that every every Every you every time that that economic indicator comes out every month Every week whichever it is will always automatically pop up in the streets You don't necessarily have to wait every to be tuned in because it is pop up on your screen So I love the the alerts all set up for the non-farm payrolls the unemployment and also the actual And the and the earliest figure so we're waiting now to see what the kind of market reaction is going to be what the figures are going to be Coming out now So take a look at the headline number. That was a colossal miss I just want to double-check on my rotors screen on it I roll instrument on a different screen to ensure that that was the accurate figure 103,000 is the as the it was a figure When they were expecting 190 193,000 that seems quite low to me the on the flip side of the last month last month number of 313,000 was revised higher to buy 10,000 also looking at the average earnings average earnings On a monthly basis increased by 0.3 percent an improvement on the 0.2 percent I was expected and looking at on an average earnings on a year-on-year basis Kind of more important what to look at came in a 2.7 percent bang in line with market expectations. I'm so like very quickly Look at it my rotors terminal on a different screen I just want to really be sure that those headline numbers were actually that the numbers that we're looking at In terms of that the reaction from the markets Yes, 103,000 is what was fed through in terms of the non-farm payrolls report. It's a quite a considerable Quite a considerably below expectation that this is an enormous truck appears with the previous two months period with the previous month but No, I know there's not a chaos and you can see the price of gold is a shooting up And I could see here that the US dollar index is lower But as I said at the top of the webinar the United States is be adding around 2,000 jobs every month to be taking along nicely a bearing in mind last month's number was 326,000 because it is revised higher and now we're getting just over 100,000 which is poor on the top of the head and the at face value, but It's still an average 200,000 jobs per month when you amalgamate to it's probably it's probably it's still a fair It's still reasonably good. It's not amazing, but it used to be good and this is a classic example Whether I think the markets are going to be too focused on the headline figure, but also unemployment did take up as well That's something that is something to be to take note of so also this is clearly isn't a particularly good report headline number Was very weak the other plumber ticked up The only thing only got positive I can say is that on a month-on-month basis the average earnings ticked up But the yearly one which is the one people really focus on came in banging on with expectation It's good to see more Americans are Are Getting better are getting paid slightly better, but ultimately it isn't it isn't an overall good report I think what we're going to do now is I'm going to take a look at some of the market reactions I'll say quick look now at the dark futures. I'll observe it It's not skeptical but hesitant to kind of pay attention to what's going on with the markets immediately after the number has come up because There's a lot of all those two good problems. I look at it on a better basis We can see here That the numbers came out at this candle and it's one that I can't hear the reaction was down and then I pushed higher It does appear that we're actually we've taken off the lows of the Of the the candle but when the numbers just just about came out if you look at this we can see here that the market did Was going to quite a bit of volatility, but there we go You know the numbers are not 40 minutes We can clearly see on a miniature that the market is heading south take a look now at the S&P 500 I suspect it's going to be a similar situation on the S&P 500 So for those people you're thinking about what's the kind of state of American equities We've had a series of lower highs For that in recent weeks. So I showed you the kind of big snapchat We can see here that the market has been in a fairly obvious downward trend here of the S&P 500 similar looking chart on the Dow Jones the market day edging lower here fairly It has popped higher on this occasion. So it's recouped some of the ground that was lost here But we take a look now at a minute minute chart and now you can see here once again This is when the figures come out here at exactly half one I know we're already below the lows at the half one. The numbers only came out four minutes ago The markets made made digest this I think to themselves. Well, you know what when you combine the two months report together It's still okay. Not amazing, but okay, but The initial reaction into the downside is that one second there, please So I think in the very near term. It's likely to see pressure on US indices Trading or in our non-found payrolls is obviously quite high is obviously very is obviously is also quite high risk Given that the volatility And what's going on in the markets ice as I said, this isn't a good report on its own But I think the market might try and convince itself that the report combined with last month's report isn't too bad And for that reason what we couldn't end up seeing is We could have seen a scenario by the the market isn't as worried About as initially let on if that makes sense. So I'll take a look at what's going on with the US dollar So the big picture on the four-hourly chart here The US dollar yesterday with this morning hit its highest level in over a month And as you can see now the markets coming off on the back of that This is the US dollar index take a look now what we can see here ban major sell-off Nothing was going to see if you positive in terms of the US dollar outlook So bearing in mind particularly on the one-hour chart the US dollar has been doing fairly well recently So a bit of a pullback isn't an entire surprise I suspect Things aren't as bad as they initially seem So I think we could see a bit of a turnaround in the US dollar in the next few hours Just so we could see a turnaround or we could see a push higher in US equity in the next few hours I don't think I don't think that's really gonna be anything enormous, but I think the We may have seen the kind of worst of the reaction in that The people might look at this number and go, you know what when you take a consideration last month's number It is an overall that bad One market which has been very correlated or inversely correlated with the price of The US dollar has been the gold market and they can a big picture over the last few months Safety and safety December onwards has been broadly to the upside. We have taken up the low You have to create a lower low here But the in recent weeks on assing five or six weeks price of gold has been for all the kind of pushing higher and if you look at the if you look at the moves it on the back of the Imperial number it's also pushing higher on account of it. This was kind of put it with numbers like this unemployment rising Poor headline number that would really kind of put traders thinking, you know, we're probably not going to have The Fed probably are rushing out raising rates in June ever that reason. We're seeing a push higher here in the price of gold that they mentioned the gold on Certain days when the economy market is on a severe pressure because of the uncertainty around Pension trade war gold has matter to do quite well I take a look now at a couple of current popular currency pairs like the euro dollar the power versus your US dollar so Over the last few weeks, we can see here that the even though the euro has been doing fairly well against you I guess the US dollar In the grand scheme of things we can see in recent weeks for 2018 It has been edging a bit lower and it's kind of always gonna run out of steam on the kind of 125 level I'm looking at any kind of a shorter term basis What we can see here is that it has been edging lower here But now that the euro is actually probably did well on the back of the that the latest figures We could see a bit of a continuation of the of the reason of the reason gonna sell off. So taking a look at it Take it thinking like this this level here. We were pretty much on One of the areas keep a mile forward is this this area here It's in around the 122 40 level or just north of that the moment 122 40 Which is with exact low from late March is 122 39 We're training ever so slightly higher that the moment if you can relate north of that It's likely we could see the euro push on higher from here given the idea Sell off in the US dollar and also it would be a resumption of the wider trend and the big picture trend Like that is more likely to continue, but that being said If the euro has found it difficult once again, I get the euro I guess they guess north of the Hits and moving average at 123 35 We could look into what's 124 and then the late March high of 124 76 But notice how the euro is further difficult to get to get up towards the 125 level I take a look now at pound dollar What's going on that? So the pound versus the US dollar has been a solid upper trend over the last 12 months You can see here that recently enough we have a this this move here recently is appears to be a bit of a pullback in Compared with the kind of wider The move here that happened largely in the month of March push higher from here See a bit of a pullback appears to be resting on the 50-day moving average, which comes to play in 139 87 if we can hold above that level We could be looking heading back up towards 141 that we can see here that the market ran out steam in around the 141 area And if you go north of 141 the next level to keep an eye for the upside we want to 42 44 the late March high, but even if the Market does better to drift a bit lower from here We could be looking at getting support in around the 139 area. We saw a lot of consolidation in around 139 And if he if you even if you do manage to go south of 139 In around the kind of 137 50 ish if you did look at the this trend line here We can see that 137 50 ish would be in around that trend line So while we remain north of that trend line And for those of you who want to know that is the trend line from the loads of March last year to the loads of August last year Grounded in November it traded south of it a couple of times But then they should make it a slice and move through it If you draw a timeline from there, and if you remain north of that trend line I suspect the outlook for pollen versus US dollar is going to remain positive It's only if that trend line is broken it could actually look to get a bit worried on the back of this What I'll do now is it's a look to take a look at the at the at the footsie with 100 Is there any markets that you want me to have a look at or comment on that? I haven't already commented on feel free to just stick that in the chat box But bearing in mind there's only a few minutes left On this webinar, so we'll be looking to wrap things up fairly soon Taking a look now what's going on on the On the footsie 100 we can see the big picture of the footsie has had a quite a decent sizeable sell-off in 2018 The market is pushing higher here yet again It appears to be running into resistance at the fifthly moving average Which comes into play just in around the kind of 7,200 mark where we're basically where we are now The market's moving higher We can see positive momentum on the rise of so the the upward move is being confirmed By the positive by the increase in positive momentum But why do we remain south of the of the march high of of a 70 to 56? I suspect the mark is going to is um is Could turn over on itself potentially, but if you do break north of 50 to 70 52 56 We could be looking getting back up towards the elated marks February high of 73 40 And if you go beyond that big the big psychological number of 7,400 would then be in play at 7,400 Is also important because it actually coincides with the charity moving average But if we do see the market look to actually run on a steam here And if it turns out that this this upward move is only a bounce back in the wider Series of bounce backs that we've had the next day to keep them out for the downside We're 47,100 and then of course the big psychological important 7,000 level I think i'll sell the 7,000 we could be looking getting back down towards 6,839 I'll take a look now at the DAX and then I look to wrap things up Right as you can see here the DAX has also had a fairly fairly rough 2018 after losing serious ground that like late late late January early February It hasn't really managed to actually kind of snap out of the downward trend that it's been in It's firmly below the two-day moving average which comes into play here So the outlook is quite it remains negative that being said It does manage to hold hold north of this support area here This price actually you know if in around 11,700 there thereabouts 11,692 or 11,700 as an area As you can see a classic example of lower highs So I suspect we could be looking at heading south again On the DAX and should it should that be the case the next day when the watch out forward to the downside Will be the kind of psychological important 12,000 and if you go south of that down towards 11,800 and if you go south of that Look towards the 11,700 region and if you go if you go below 7,000 because at this area here 7,800 that will create a new low for 2018 and that in itself would actually be quite a worry And it could point could point to head back down towards levels and that seems to be everybody of last year in around the Just south of 11,500 What we need to be doing is you need on the DAX to kind of shake off or negate the negative trend that we've been in recently We need to kind of first of all probably Capital head north of the fifth of the moving average which comes into play at 12,390 But then also you would want to be taken out the march highs which come into play just shy Well, they're thereabouts at 12,500 12,475 Wouldn't be taken up before we can actually even begin to consider Should we be looking head and higher if it do you might as you go north of there We'd be looking heading back towards 12,600 And I thought was the case you can then get to get a sense of fear that we might actually target the journey moving average Which comes to play at 12,671 Well, that's all for me this week. I hope you enjoyed this week's non-farm payrolls A webinar it's going to be on the market insight section for the next hour or so And market insights can be found under the trading trading pulse section and the second tab down I want to point out that we also have a webinar the Monday market webinar You feel free to sign up for that. That's on the Monday coming. I'll be giving that webinar and that'll be on at 12,15 BST British summertime. I do want to thank you for your time and your patience. Have a good trading week and good luck