 Very good morning to everyone Tuesday 3rd of September and it's already begun in terms of the price movement this morning the pound sub 120 and obviously that's a Symbolic and long-lasting Technical level of focus and support given that was the kind of double bottom that we printed immediately after the initial e referendum back in 2016 and then we tested 2017 and here we are this morning Having a look just below 120 session low printed in cable this morning. I just changed my charts over here You can see This morning as UK and European participants have come into the market. We had a little test seen at first Kind of entrance around 6 6 30 this morning then we broke through At about 7 7 30. We've had a brief retest and it hasn't the low point that we've had so far 1979 has come back up to trade at 96, but sub 120 for the moment, so Increased speculation of course of a looming general election given a speech from Boris Johnson yesterday and the options The lack of options almost to the left for parliamentary members as they return today Reopening of the lower house of Commons, so we're going to discuss all of this of course in more detail Shortly, but certainly the pound capturing some attention this morning the DAX Also seeing a little bit of movement quite a nice technical level of support though It's just running into at the moment after this initial quite staggered fairly Normal characteristics really of the DAX future When you see these kind of impulses of movement it tends to be quite staggered and since the Cash open in the last several minutes or another wave of selling pressure just breaking through the Asia Pacific low point That's taken us right down in the daily pivots to the s1 And as you can see an area of support that we've seen over the course of the last two or so sessions, so This again DAX quite typical of the kind of speculative nature of the product You tend to see then people targeting using these daily pivots and technical levels being quite key areas to kind of Manage actively the trade any break of below that level. I'll probably be looking down around the 30th of August high that will come in and around 11 a 80 And then the lower bound the s2 starts to bring in then some of the respective highs that was seen on 29th And some of the low points thereafter. So yeah worth keeping an eye fairly fluid situation this morning other asset classes gold and T-notes a touch higher up six dollars and three ticks respectively overall then given that slight shift to a flight to quality bid With the US 10 year coming up to just keep an eye there technically on the the R1 Which was also encapsulating the the high point from yesterday late afternoon session obviously Very quiet just given the fact that US participants will be returning to market today after their Labor Day extended weekend Excuse me So my moderate risk off as I said safe havens a little bit higher Equity index futures a little bit lower this morning the main global issue has been headlined still Regarding the ongoing trade war apparently sources have suggested that Chinese and US officials are Struggling to agree on the schedule for a plan meeting this month to continue trade talks after Washington Rejected Beijing's request to delay the tariffs that kicked in on Sunday. So apparently according to unidentified sources China had put in a request to delay that of which obviously Trump has ignored those Tariffs went into action on Sunday and the oil levy retaliation from China also took place But the point being is now they're struggling to actually pin down a date for them to talk. So still more political fallout but Excuse me, I'll try not to cough my way through the briefing But the pound another staggered move to the downside again fresh lows So as I'm going through this briefing do keep an eye here because point being when it comes to the long-term levels for the pound this is a daily continuation in the futures and This was that key area, of course that we've been looking at for such a long period of time Now we've got this credible threat of a general election and obviously Boris came in and around this if I just put a square here On the right-hand side. So we've had a significant repricing from Really towards what where we were trading around run 30 handle all the way down 10 points lower as the Prospect of a no-deal is increased given the stance that he has put forward But just looking where we are at the moment. You can see I guess his trend line at Sam may have had on kind of scaling down from originally the Post or this was actually the the e referendum That was actually the first uttering of the words hard Brexit from Theresa May at the Tory party conference of 2016 We had the retest in Jan 17 So any break here technically there's not a great deal of support and we were looking at the spot price This is obviously what I'm showing you the futures and Sam was saying that support really got to go back to 1985 And looking around a 116 handle. So that's quite a fair distance Obviously four points below where we're trading at the moment this trend line here would come in I guess in the interim period, but then you'd be looking more psychological to 115 110 certainly as downside levels. That's not to say we're gonna get near there today But again the breach of such a long-standing and such a symbolic level here of focus Could well open up a decent runner of at least a point or two today. That would not be Holy surprising I would say and as I'll discuss in a second for me That weakness at the pound all plays into Boris Johnson's hands and I'll explain more my reasoning of why I think that this is Absolutely his strategy On that point, let's get into this Brexit situation. What exactly is happening? So Brexit fight raises prospects of a new general election. It's the headline story You can see the little red flash of the fact the pound is broken down Through that 120 markers. We've just seen on the charts now Prime Minister will risk losing office rather than back down. He gave a public address yesterday But the conservative rebels say they're determined to stop a no deal. So let me just show you this This is the best summary. I can really see this morning from the press It's from the BBC and it encapsulates the five points of which is really what's happened yesterday Puts us in the best possible starting position to get ready for what could happen today So point one Boris implored his own MPs to back him over Brexit and reject what he said was another pointless delay being proposed by Labour, this is very important as part of the strategy I think from Dominic Cummings is trying to trying to muster up, which is this the people versus Parliament It's those parliamentarians that are stopping the will of the Democratic vote It's a miscarry as a misjustice of Democracy that these politicians are not fulfilling their mandate to deliver Brexit. This is what the strategy I believe is from Boris Johnson is trying to really Put across that message and hence the wording that he's using pointing to the opposition party is delaying what he feels is The the will of the people number two Downing Street told journalists the government expected to table a motion to hold a general election On the 14th of October if MPs voted to take control of business in the House of Commons later today I will run through exactly What this means in a second So we're all crystal clear, but essentially there is a Something called a standing order 24 which is likely to be an action when Parliament gets underway later this afternoon, which will allow emergency debates to happen, which is where then the opposition Parliament MPs in Parliament are going to try and table point four on this list Which is a fast-track of Bill in Commons to contemplate a further delay to Brexit until the 31st of January 2020 The other things that are happening here the government is up the ante by threatening to deselect some of the most senior conservative Conservatives in the party if they defied the party whip This is something we discussed in a briefing yesterday and then the fifth point meanwhile across the channel the European Commission has said it was Considering allowing EU countries to apply for cash to cope with the no-deal Brexit using a special emergency fund So EU kind of holding firm for the moment not blinking under the Boris bluff if it is that for the moment And you would say we're not close enough to the deadline yet. So I'd say point five is unsurprising at this point To clarify then why have we arrived at the situation? Where we are at the moment so from the political point of view The legislation to be put forward today in Parliament seeks to tie Boris Johnson had Boris Johnson's hand And instructs him to ask the EU for an extension for the Brexit process until the 31st of January of 2020 Now if the European Council proposes an extension to a different date What this legislation then would do is that the Prime Minister must accept it within two days Unless that extension has been rejected by the House of Commons So in other words the power to decide will lie with the members of Parliament and not the government for the PM this of course is Absolutely cannot happen because he's promised to leave do or die on the 31st of October come what may So it seemed impossible that he would ever accept that and then hence the talk then of an early general election Because that's why Downing Street said if that does happen Which could well be a prospect later on this afternoon then he has no other choice but to call a snap election Now for me, this is absolutely going as planned for Boris Johnson The weakening of the pound only further helps his cause because it makes his argument That the the blocking of Parliament of trying to do what he's doing is causing this deterioration in our currency and is causing more complications for him trying to get the deal over the line and done and so So far so good, and I do think this is heading to the general election So what does that mean? Well, this is the latest poll tracker where we can see the lines Representing the weighted averages across all of different polls that there are because there's obviously lots of different ones and What you can see here is the quite well to two real key political Milestones that we've had in recent history. One is the European election. That was when the Conservative Party got Absolutely decimated. They came fifth. This is the leading party of our government came fifth That is diabolical by anyone standard, you know, and What happened then? Well, that was the kind of beginning of the end of Theresa May at that point Brexit Party was the big surprise. They came out, you know on fire and their performance The only difference is though is that they have zero at this point representation in Parliament and so Hence the reason why we've had this narrative shift into going quite hard Brexit no deal or die situation from Boris Johnson as he tries to encapsulate the risk or counteract the risk Are the fact that he could lose the the conservative vote could could Split and some could be lost to the Brexit Party So in order to make sure that that momentum is caught and that situation does not materialize He needs to talk a very hard game Now Boris Johnson becomes Prime Minister and there is a quite clear and immediate bump up in conservative popularity Labour has done absolutely zero. They've just gone sideways Whereas the Conservatives have really pulled away quite substantially as the Brexit Party has faded Basically after the week or two from the parliamentary election the Brexit Party Nigel Farage has had a couple of LBC radio appearances, but really he's done his job He's got his nice little team around him now Brussels. That's it Farage doesn't want to be Prime Minister And he doesn't want a full government to be sitting in Parliament every week on week And so for him it's done and therefore that's been reflected in the polls Brexit without any PR Like the machine that was underway in May in the lead-up to European elections as that's faded away Basically, Brexit Party has faded with it and as such it's almost a perfect divergence as the popularity fades from Brexit It goes straight into the Conservatives. Why because it's ain't a Theresa May government It's a hard Boris Johnson government And so this is all lining up in addition with all of these Public spending promises that Boris and his yes-men team that he's surrounded himself with are saying and so hence the reason why this is all going as planned for Boris to pull the trigger and by Calculation at this point could come out with a pretty firm majority government of which he can then go back to Brussels and cut a deal so Timings, what have we got to look out for today? I was looking at the parliamentary website What's on the agenda? And it's 230 and really the main chamber of the commons reopens for business remember The whole reason why this is happening is because the very Time frame given the prorogation that's already in place now for Parliament which can happen in the next week And so today is going to be key because today is going to go back to Standing all the 24 and the push for 0.4 on this agenda here Which is Parliament trying to fast track through a bill to push this idea of Legislation to tie the Prime Minister's hands and delay Brexit until 31st of January if that goes through Boris then triggers the election at that point other things then to be aware of on This front is looking at the timings here. A lot of this isn't going to really kick off. It seems it's all much later this afternoon, so I'd say If you got in that short at 120, I'd say you're probably best Keeping that position on I think just you got to sit tight. I'm afraid for the rest of the day It's probably not a great deal of risk around blips in the dollar Obviously, you've got to keep an eye out for any trade related comments coming out of Trump and so on but I think that we kind of know the status quo there The only thing I'd look out for is we seem to be in a negative State in that trade situation. So any positive olive branch type conciliatory comments from either side Could have a meaningful impact on markets given the fact as I said the general cross asset class mix this morning Is one of a risk off moderate sentiment and so a positive trade comment could certainly fire things up in reverse It's a profit-taking on those shorts and equity space in a reversal and golden and T-notes so do be aware of that But yeah, I think overall I would expect the pound to potentially trade heavy into drift south Particularly interested when the US come in Not that they see Brexit as More important than the trade talks, but technically obviously having seen the breach in the spot in the futures at 120 I think people will be interested stateside in this this situation But it could be a late afternoon show early evening if you're going to be trading the pound before we get the real Juicy details what exactly is going to be happening? We could finish the day with a general election being tabled by the Prime Minister that would not be a shock if that did happen Okay, the other point just Finally to explain Some of the the other pressure on the pound. Let's not forget as well economically We had yesterday UK manufacturing activity contracted in August for the fourth consecutive month to the lowest level since 2012 Brexit uncertainty mounting fears of recession deepening business confidence falls to a series record low So whilst all these political Movement that's happening at the moment if you are a business There's no way you can commit any type of capital for an informed investor looking to invest in the UK There's such uncertainties at the moment that There's absolutely no surprise that these types of figures are decreasing to multi year lows That really does again heap the pressure on the on the politicians to get some kind of resolution whatever that You know come what may Okay, let's move on other than the trade talks and Brexit the other thing I just wanted to mention was the equity market JP Morgan Banging that drum like there's no tomorrow. I almost feel like I'm a part-time JP Morgan salesperson But I thought I'd point it out again Because not just JP Morgan Bank of America have also come out with a similar type of note on Friday And JP have said it's finally time to buy stocks despite the trade woes If I just skip down to the bottom of this These are their their points Here are some of the potential global equity drivers cited by JP US Federal Reserve is easing But high-yield spreads or jobless claims aren't spiking Global activity momentum is like to improve going into the end of this year Profit margins in the second half could surprise positively equity valuations on P. E. Basis are Undermined undermining That's a typo there an investor Positioning remains defensive without inflows, which is contrarian bullish signals So we've kind of gone over this before they've been backers of this call for the last couple of weeks But I thought I'd just point it out again a little bit of a division on Wall Street. I'd say Not the biggest names, but UBS legal in general. They'd be much more bearish looking to Rejig their portfolios to position out of to become underweight equity exposure Whereas JP Bank of America seemingly just filling their boots at the moment But I would say as discussed about a week ago. I think that those two All those players in in the market are looking at different time horizons and I think in the short term I think JP Bank of America could well be right Whereas in the in the medium to long term, I'd prefer UBS's strategy in terms of portfolio composition And elsewhere finals thing I'll talk about for a hand drive to Sam We had the RBA interest rate decision overnight. No no shocks there if you actually look at the Aussie Currency it is it has seen a decent bump higher overnight After the result came out They kept rates on hold as expected at 1% There's obviously a very small amount in the market looking for potential cut That didn't materialize and if I look at one of the main phrases that they said they said They left policy unchanged as it waits to see how a combination of interest rate cuts and tax relief impact the economy While Sydney property prices already showed renewed strength and remember it's the housing market, which has caused a lot of Concern for policy makers in Australia and as such stabilization there in fact property prices going back higher has been As kind of led to the idea that potentially no further cuts for the moment despite what had been building in Few weeks ago possible multiple rate cuts So yeah, if anything Less dovish than expected rather than being outright hawkish this led to appreciation of the Aussie overnight and that in the short term Outweighing any negativity from the trade situation Okay, as you can see I'm struggling to talk without coughing. So Let me hand you over to Sam and he can finish things off on the tech side. Okay guys. Good luck if you're training breaks at headlines All right guys. Good morning. Yeah pound struggling and it's it's gonna be very very important today It's just to to keep an eye on where we close where we close the day. Is it below 120 or above? However You know opportunity wise from then for the short might be might be long gone the way it's looking at the moment As I said said to answer before the next real key level is from the 80s Somewhere So quite a way down and you got to imagine this stops here You've got to imagine from a psychological point of view now we're below 120 we close the day below there and really It's it has probably got a bit more to go Not to say, you know, this time of six months. I don't think we'll be higher But certainly you got to trade what you see here in below 120 the classic They're not bad to down to the previous load the day not looking too good than euro pound as well We have a quick look over here is just coming up to quite a well You can see the line is still pretty much drawn on here a key point I'll argue it's there. So just around 91 45 and a half in the futures a Bit of a breakdown point that we had on the 22nd again close above there And even the euro which is under considerable pressure elsewhere could find a bit of strength here euro dollar is Drifting as well big data to the downside yesterday into the afternoon bit recovery overnight But again is struggling and and obviously it's on on the lows of the year And so the dollar is is strengthening and like I said, you've got to be aware for any comments today on the trade side And we had a few from I think Trump Was it yesterday or something to do with the trade and and it's just not buying the weaker dollar at the moment So you've got to I think here again go with that flow and looking for opportunities to to go short And I think with you know markets like the the euro here Yeah, you're happy to to stay short short as long as you know trend lines like this hold and Obviously that would looks like it could if it was to come up shortly mark up as well with the the previous low the day at 109 70 Around there as well. So quite a key area maybe into a day happy to stay short You're a dollar as long as that holds and if not then obviously you've got some other key resistance points to come into play But every time we push higher we just met with a big move to the to the downside Over the coming days as well equities we talked For a while yesterday and every other briefing there has been just about the importance of this area here Called it I guess 2950 down to 43 just such a key key zone So just to reiterate again wouldn't really fancy being long like Jamie P. Morgan are saying unless we can close Above that just because the similarity to this trying to trade to October November December last year Is uncanny? So unless we close above not really too interested and if we do I think Medium-term trade to the all-time highs is on the cards. However at the moment We are trading below and again held very well yesterday morning and I guess you could you start to See if there's any trend lines that come into play not really as of yet But you can maybe look to get those third tests around Well potentially just below that s2, which is active is pretty good support As well from the previous high that we had on the 28th as I was talking about a break below there Then some we are drifting down again. It's obviously worth getting the cue from what happens in European equities this morning, but unless we get above that that foot for 2943 And 50 I would remain of the bias that we could be drifting lower similar to the the euro in That you might be happy to stay short today as long as this trend line holds you can see from yesterday's high to this morning To the sorry the the lay the day high to then today's high as well as long as that holds then yeah You'd be happy to go short a break of that and sure you get a bit of a reversal pivot from yesterday and those highs from yesterday morning and Friday afternoon could well be of option gold we talked about yesterday being in two different ranges having broken out the The top part of the bottom part of the one that we held from the 26th to the 29th We're still within that and that's how I would look at this market, you know buyers in charge of 1525 and sellers 1541 breaks either way you could see the push back up towards those highs of the year to the downside Then you know can be even the way gold moves looking at 1500 despite there being quite a lot of Previous levels of resistance to active support below so but gold it for me It's just a case of holding firm on that and waiting for the market to really tell us what's going on Obviously expect the volume to slightly You know increase after Labor Day yesterday as well quick look over at oil As well you can see here not too much in the way of movement from yesterday But certainly and I was just looking again on the longer term chart And we've said this before and in that just waiting for the real move in oil to come And that could be when it breaks out the trend line to the upside or the downside as well Just going back from the the August low We're not too far from a potential third test of that trend and as well from the upside the April highs Not to what we weren't too far yesterday anyway from from potentially reaching the top end of that So this is a daily chart on oil I think there's no harm in just waiting for a break either way to the downside From a medium-term trade. Yes that August the 6th low and then obviously the low that we had back on the beginning Or middle of January and then beginning of June could come into play to the upside if it breaks through Well, you'd imagine a decent run higher towards 60 but similar with those recent highs Do you see two equities who's starting to get that? Correlation coming into play so keep an eye on those two as we go through the day as well The that's just starting to recover and this is a you know We've already had I guess of us put some a five minute a test of that whole area You can see marked up. So so quite key from an intraday point of view What happens around here? Does the DAX decide to hold here and actually equity start to push lower or a break through? And it turns into being a false break and actually this market then pushes higher and equities in the US follow suit So quite a key one to keep an eye on now for the DAX Obviously other things going on certainly in the currency space and just bringing in the The euro as I did this chart for the for the strategy Yesterday, let's move this away Big one to keep an eye on would be the retest of this trend channel again Doesn't look like it's gonna come into play for now But something to just to focus on on any push higher And then you are looking really at the next levels down at 10860 from May 2017 Not completely out the question that they that can come over the next couple of weeks And obviously like the pound again, you'd be keeping a close eye on where we close the day and week as well Any questions as usual, please let us know trading live or on YouTube Looking like it's gonna be a pretty interesting day for the pound Really could be a big movement either way and keep a close eye on obviously where we finish as well I hope you'll have a good trading date and I catch you later on