 Okay, very good morning. It is Wednesday the 11th of December. I hope you're doing well Obviously lots for me to cover on my side this morning Notably the update from the latest you gov MRP poll which came out last night and has Knocked the pound from overnight and is currently trading down to shy of one point in cable Otherwise elsewhere. We're gonna talk about the ongoing trade war ahead of still the looming threat of Renewed tariffs on China by way of the US this Sunday, and then we've got interest rate decisions Almost feels like although we've been so focused on the election here in the UK. There is the ECB And the Federal Reserve obviously coming up this week The Fed in particular will be the focal point for later on this evening So we'll have a quick look at what to expect from that as well So first off, let's just have a look at the charts and see what's happening this morning And I'm not really going to talk too much yet on the pound, but that is probably the most notable Chart let's say from the morning you can see quite a gap down given the futures close that we have And this was all pricing in that poll that came out last night Again, we're going to details shortly, but otherwise elsewhere pretty quiet in the US 10 year in gold both Basically flat on the session This of course coming ahead of that that US central bank decision Otherwise a little bit of movement in the stock futures this morning Seemingly led by a bit of a technical break more than anything fundamental in the DAX So just before I've switched this live feed on was just talking over the mic Where you've had a bit of a break of a technical band of kind of resistance that around this area And we already had marked up and the market respecting so far some of the previous areas of Support and resistance that we've had through the last couple of weeks of trade and that in itself Just restricting some of the price action But certainly very quick run through 20 points or so when we initially breached the highs that were seen from Yesterday afternoon sessions some of that range high from the previous days Asia Pacific session as well As does the DAX tend to move at around it the pickup in volume spike at the cash open at 8 a.m. So Yeah, a little bit more I'd say technical on that push Rather than anything fundamental going on from a from a German perspective or overall global macro Kind of type of view on the trade side because there's not many in the way of new developments on the trade war either WTI crude futures pretty much unchanged There was of course the API crude or infantry's which came out last night And if you actually look on the crude chart, you can see we have had a little bit of a downturn As that data did come out and we've kind of consolidated just below pivot and the $59 handle So I'll also get you up to speed and what those numbers were as well So let's jump straight into the news and let's talk about this poll that came out last night So this is one of the most eagerly anticipated polls because not only is it the one that of course that predicted the 2017 election correctly using a new methodology otherwise abbreviated to MRP this multi-level regression post stratification model which essentially tracks polling data over a period of a week from a hundred thousand panelists across the country and then it extrapolates certain assumptions through different catchments of different areas and This one was is particularly well followed it came out initially the first one at the end of November so about two weeks or so ago now and if you remember the Pound actually gapped up because it showed quite a resounding victory and size of all majority for Boris Johnson's conservative party Now at the end of November that reading stood then of a majority for Boris of 68 however, the report that came out last night was the most latest reading and This one of course being quite influential because it's just today is the last day and then The electorate hit the the polling booth as of tomorrow So this is about as close as an insight as you're going to get to the the national sentiment And as you can see from the headline the key poll now predicts a majority of 28 So here's a look at those two polls November 28th to deck 10th. That's not a poll conducted on that day That's the release date of that poll So here you can see the Tory bar has Lost about 20 seats Labour in a net effect has gained that there's been some slight shifts elsewhere Not a substantial deal To that extent so here you can see the conservative majority 68 narrowed to 28 Lib Dems very little change. They're at an uptick of two seats The S&P has seen a slight alteration, but the the shift in balance here is really between Labour and the conservatives so they've been making up a little bit of lost ground that we've seen early around two weeks ago So whether or not the latest NHS kind of PR Blunder by Boris the other day with that sick child in that leads hospital because of the shortage of beds Or whether or not it's been a degree of complacency in terms of people thinking well, it's a bit of a shoe in I know talking to Sam. He's of a pretty firm belief that you know, this is This could well transpire to be a good thing because it will send incentivize Those conservative voters to really come out in force in order to lock in getting Brexit done essentially It could be one way of looking at it But the main thing here is having a look then at some other points of interest from this poll because There is a margin of error from the calculation from the methodology that you gov use in the MRP process and essentially that gives a margin of error of 367 which is a obviously a large majority even more so than what we had in the first poll back at the end of November to the low-end margin of error of 311 which would be a hung parliament so captured within this is the is the definitely a possible case of a hung parliament You gov's political research manager said in the report last night that as things currently stand There are 85 seats with a margin of error of five percent or less So I guess for me doing the job that I do this is a bit of a tantalizing prospect because that means Essentially, I'm going to have about 85 seats on my hot list that I've got to monitor and track and deliver As quickly as possible to you guys to give you as much advantage as possible to try and get ahead of any Subsequent moves that happen in markets But all of that obviously is conditional on the fact that if we've got a going to a kind of more low Number of a majority or I guess a minority if you like or a low majority for conservatives Or a hung parliament that is the case then obviously it goes really down to the main Constituents by constituent as they come out throughout the night One thing to have a look at though There was most of slightly blurry, but I did tweet this last night if you wanted to see the graphic in more detail But essentially this was Bloomberg putting out their article ahead of the Election tomorrow and it was talking about the various different scenarios that you could have in the British pound against a dollar And I was looking at scenario one two and three to give you a bit of an oversight scenario one They were saying the actual relief rally in the pound would be fairly limited Given the markets pre-positioning that we've seen over the recent few weeks and so on That I would agree to some extent But obviously this latest poll has knocked the the pound by a good point So there is now a little bit of renewed upside perhaps to at least reverse course of some of the movement from overnight and Potentially if it continues through today But the point being is that the relief of a Tory majority is going to be far outweighed by the shock of a hung parliament And so the bigger move here the bigger risk and as what we've been discussing in recent briefings about the kind of option Activity would suggest that people taking downside protection Because the size of the move to the to the downside in cable could be fairly severe depending on The outcome so scenario two as you can see Bloomberg here and they're looking at an average poll of different banks that they are spoken to they're looking at a range of between 128 to 122 So this basically is a full reversal in the moving cable of the rally that we had initiated in October When we had the breakthrough on the kind of agreement at least for the moment about in framework and principle the Northern Irish border Now scenario three would be down here This would be if the Tories got less than 300 seats And at that point if Labour loses some seats as well While Labour might be able to form a government with support from other parties a condition from the coalition would be Most likely Corbyn's got to go They've already been quite vocal about this just talking about this as well with some of the guys here in early about if that did Transpire and it was a case of the Lib Dems Would they go into packed with Labour government in order to then you know former working government in that scenario? I think that's highly unlikely even though yes You would assume that you know politicians and Lib Dems would be the same one a bit of a power grab given the disaster that was the the Conservative Lib Dem coalition of 2015 and how badly that is still impacting them from a Public perception point of view. I think getting into bed with Jeremy Corbyn would be an utter disaster for that party So I just can't see that happening unless Jeremy goes and the possibility of Jeremy going I think is is a possibility But he's been such a he's stuck around through thick and thin it's going to be a big call to see that happen So all of that being said then that's got to be a bad case for the pound at least in the short term If Corbyn did go and there was a little bit more of a centrist Labour leader in coalition with the Lib Dems Well, then the pounds got a rally under that point particularly if it's then been smashed down by The initial political uncertainties that may have transpired So scenario three then would be we get a retest down at that multi-decade low That we briefly flirted with at the beginning of September if you remember we had that double bottom Defined at the end of 2016 early 2017 after the initial e referendum And then the uttering of hard Brexit from Theresa May at the first Tory party conference That kind of form that's lower bound of 120 we briefly broke there, but found to sustain it It around September of this year, but that could well be Under threat and certainly they mean we're talking about a ten-point move away from current price But bearing in mind, this is the lowest case probability So I would seem that would be a big shock if that did happen But this is the sort of thing we're going to discuss of course much more Tomorrow we will be covering this of course live. We're going to kick off on this YouTube channel So do subscribe if you haven't already done so. I'll give you a full rundown the exit poll will hit at 10 There'll be a media Movement on the back of that and then as I said depending on the scenario If it is close, then we go into the real nuts and bolts of the evening I'll have a full chronological order of all the key battlegrounds as they come out I'll be monitoring everything And we'll be going through every ebb and flow of moving the pound overnight All right moving elsewhere off of the election This is a graphic That really underpins the price movement in US equities yesterday The guys here will remember this quite clearly because they were all training at the time You had a big rally because the Wall Street Journal reported China sees US delaying December 15th threat as tariff cuts Debated market took a good bid off the back of that and then later on December 15th China tariffs depend on how talks go the whole move reverses. So at the time I would say And as I did say, I think it's the least surprising news that second part coming because you know, this is just a gamesmanship if you like of The fact that there's a negotiation going on But there's also a financial market that's being traded at this present point in time. So here I would say just be a little bit careful When that initial Wall Street Journal article came out a couple of the guys managed to capture the move Which was great But my advice that I was saying to them having just lived through these kind of news cycles many times before is that just don't get greedy Be fairly proactive in management of the trade look to at least book the majority of it If you're keeping any on for a further extension of the move or if anything Just find that good technical level of relevance say the previous the overnight age of Pacific high and then just take the trade You know, there's no point sitting in it when you get that kind of momentum ignition It carries through as that, you know, someone like the Wall Street Journal We saw yesterday the market didn't move Immediately in that kind of algo spike way. There was a little bit of time Opportunity to get in because it was from a less followed Newswire typically the journal was associated with the Dow Jones news wire, which not many people have access to so there was a bit of time Ride the move and then get out of the trade because inevitably this can be the pullback and from a from a Expectation point of view given those tariffs are still a potential threat on Sunday I just don't see the point of why Trump would want to agree something so soon If I was him and I if I was an advisor to him I'd want to be keeping the pressure on China all the way up to the last minute to ensure that they really do commit Let's say on the agricultural purchase side to everything that they're saying You know, so I would expect this to be the same So do be mindful of that more choppy price activity and I do think they could be late this week a potential big shift in the equity space US led on the back of More definitive concrete announcements around yes delay or no And then we go into the weekend and that could cause some end-of-week selling going into the weekend in particular Perhaps people as well closing out some of those long positions that they've had on Riding this all-time record high move not want to carry any risk into year-end A few other things not going to speak too much about Christine Lagarde. Obviously, we've got another Day to go until we get the ECB meeting, but I did think it was quite interesting a lot of the press talking about Lagarde because she's really kept her cards close to her chest since she came in as ECB president five weeks ago quite a few big banks actually talking about the fact that she could She could well make an error in regard to an unintended miscommunication Especially when it comes to Q&A well as much as I agree any time a new person speaks at one of these top tiered Kind of events. I do think that is a risk But someone like Christine Lagarde although she was nicknamed Madame Lagarde when she was the finance minister Given that she was quite outspoken at the time that was over 10 years ago when she held that post And she's done a pretty stellar job Ever since when it comes to public announcements. So I don't share that view that I Assign a very low probability risk that she's going to make a communication mishap But obviously a lot of people looking at this with great interest She does have a job to deliver of course Couple of big banks like JP Morgan asset management going as far as saying this is not an autopilot meeting And they're saying potentially, you know, could we see a policy move as much as the markets and nowhere near pricing that in Obviously strangest things have happened. Mario Draghi. You remember when he took over from Jean-Claude Trichet First thing he did was unwind Trichet's Policy error of two rate hikes in 2011. He just came in and reversed it his very first meeting. So Yeah, much to look forward to in tomorrow Otherwise the Fed is tonight and again, we're going to cover that live on youtube this evening So we'll kick that off at 6 30. I'll give you a preview in depth and The announcement will come at 7 p.m. London time This a little bit different because Powell obviously is a seasoned veteran now at delivering this And even though this does include the summary of economic projections Recent economic data Would suggest then that when we look at this which is the federal funds target rate and the rate hike cycle that we had And then this mid-cycle adjustment that Powell's been pretty much right it was a mid-cycle adjustment because It appears to be paying some heed in the economy because as we've seen gdp forecasting now for q4 has come back to Stabilize around 2% Which has kind of mitigated what had been looking like an extended and protracted downturn and slow down into q4 2% would put us pretty much on stabilized growth for q2 and q3 in the us for 2019 so for the moment and the way that market surprised is that this mid-cycle adjustment is done at least for the time being and so The communication if you like from the Fed is likely to be one of just sitting on their hands for the time being And largely to be reflected as well in the dot plot changes We did of course as well have payrolls which helps that narrative Non-farm payrolls on friday came in at 266 000 way above market expectations of 180 It was the largest advance in payroll since january Notable health care gains or jobs in health care professionals and technical services employment also increased in manufacturing as those gm workers came back from that one time strike so Yeah, it will be one which will cover of course But not expecting great deal of fireworks to be honest that come later on this evening That the other thing we did have the api all different trees As I mentioned wti crude has drifted a little lower overnight The crude headline was an unexpected build So a little bit bearish on on that number 1.41 million expectations for a draw of two and a half million Cushing though was a draw down of three and a half million that is pretty big But expectations were for a draw of around two and a half gasoline Build 4.92 million more than double consensus distillate so build a 3.24 so despite the cushing number The the crude and gasoline now weighing and just bumping prices down a touch overnight Okay, I'm going to leave it at that and I'm going to let sam come on I understand things have been seeing a little bit of movement as I've been talking But as I said a little flurry and a push in the back skin looks more technical to me I can't see any headlines that have really hit the tape and the fact that the markets and pull back would kind of solidify that that way of thinking Okay, I will see you in the chat room. Thanks very much guys Morning, hope we're all doing well. Yeah. Dax was pushing up and I'm hitting the R1 there and I guess it takes us back to where we were on Friday and almost to the top of the Well, yeah, just post 245 And uh, yeah complete reversal Of of that move lower that we did have in the early hours of yesterday morning You can see now that's done and more taken us back to yes or in monday Sort of afternoon high and we've come back a bit since then Looks like it was almost a central bank meeting the Complete reversal. I guess with this market where you'd be keeping an eye on now is there's almost back towards where we broke broke out You can see the highs of yesterday was quite a key level resistance for For quite some time before breaking this morning We did actually already snap back to to test it along with what was the the asian session higher this morning Before that but keep a watch on that it's going to be key support for this market if we are to continue higher You would have to say also Keep an eye on those previous highs if it was to to come up you can almost Say is a bit of a trend line from Those highs that we had from late Well on the sift as well So keep a watch on that the next market to to bring in the pound of course gap in lower overnight as expected we didn't come down of course at We can see here 9 30 to 10 o'clock and Keep a watch if we are to push higher on any potential gap here You would expect that to be some sort of resistance if that was to happen 31 31 to the downside obviously keep a watch on that but more so I would just say just a tiny bit above that You got the low that we had back on the sip And that round number and some support that we had on the fourth So quite a key level there Uh, I would have marked up and then if that goes be looking at the high that we had from the morning of the fourth as well Which give or take is about 30 ticks below there looking a bit longer term because of course, you know the The move that we had to the upside was on the premise that you know, there's going to be a decent majority That's perhaps not looking as likely now So if those levels are to go well, you could always be looking at us getting before The election result down to 130 17. I think that would be a big move to happen I don't necessarily think that's completely out of the question So those would be the main levels. I'll be looking at 131 130 69 and 30 17 to the downside and of course if we do get some positive spin on this double bottom and then up towards that Uh That gap keep a watch on that before that though 131 33 would be a level to focus on some nice support in the Asian session before we did break down when volume just starts to pick up post 6 30 into 7 o'clock. So some key levels there to to keep an eye on obviously euro pound as well Would have gapped to the upside you can see there obviously the liquidity in the future is not Great for this market, but uh, yeah one to have marked up moving over to the euro Dollar you can see it's coming under a bit of pressure This morning. I wouldn't necessarily say it's going to be completely dragged round by the pound But you would expect if the pound was to break that low the euro should do so as well and and worth as well with the The euro here getting on this trend line or potential trend line Should we say because you've got the low that we had back on non farm payrolls on that sixth and then monday And it does look like if we were to come back down to to test this trend line You're going to have a an area of support which was of course resistance back on the ninth So keep a watch on that if that was to come in now That would be around 110 80 On the future some key support levels below that though most notably from yesterday Around midday into the afternoon at 110 77 And then the all those lows really from Those previous days to the upside if the euro was to to have a strong You know back end of the the morning into the afternoon It's got to get above its previous low similar time that the the pound broke down So 110 91 would be an area to focus on and you probably as well worth getting on a couple of these trend lines Which you can see well well respected yesterday and then into this morning So that third test could come in around one of those previous highs As well so euro ranges relatively small It seems as if it's just getting squeezed both ways no harm in perhaps waiting for the break of either of those I'm going to look over at gold this morning just as equities were pushing up We saw gold just on the five minute come down to test that low the days It's uh, all that is that it's a little test not much going on there But there is quite a key level on that low around 14 66 0.8 you've got the low from yesterday After noon so let's just call that a bit of a double bottom now And it was the highs from Monday evening and then Tuesday early hours So key level to to have marked up if we were to to fall through that then you've got all of these Bottoms to keep an eye on around 14 64 from yesterday's low to monday's low And then if that if we start coming into that territory, then you're getting the the trend line from the low that we had back in November And that all comes into play for for gold. So that could be you know an opportunity that is to go As well. So definitely would be marking that up. You can see here starting on the 26th going into The lows that we had on the 29th and then all of monday And then yesterday as well that trend line to the upside because of course It's not guaranteed that we do get a test of all that level You can see the high of the day where you would just want to move that horizontal line just a bit up because it's taking Uh, rid the the interest here of those highs that we had back from around three 54 o'clock yesterday to keep a marked Zone on that with yet today's high as well a break above that And I don't see much stopping it really until you get towards sort of 14 73 As well a favor the move to the downside here by any push higher You've got to be aware of 14 76.9 the nice double bottom there that we broke on non-farm payrolls didn't really get a retest of that So if that was to happen you that could expect some decent Resistance there but nicely set up has to be said having a quick look over at The s&p you can see to the tick hitting Well pretty much the tick hitting yesterday's high And then coming back down testing what was the Previous high of the day as well. So in between that range call it a new zone between 30 31 43 and 31 36 keep a watch on that r1 and the high that we had from Monday as well a key one to to focus on Just having this trend line on from the The sick see if that's come in so that's probably worth having a look at that as well And then of course the trend line that we had from the all-time high Marks up similar kind of price. So using the high from the second the sixth and the ninth A break above that then we could get a further push to the upside But it has to be said the s&p is a tricky one to trade at the moment I don't you know, we're getting so many conflicting trade comments that coming out It's uh, it's a tricky one to to trade and I don't know Whether you'd want to get too heavily involved in this market or not at the moment But certainly to the downside you can see a well respected Uh, sort of area, uh, where we're getting squeezed in from from both directions So I would have this on as well. You can see let me just modify that sorry Starting from uh, yesterday around one o'clock to this morning and then again just on the eight o'clock So yes, there's opportunities if those are to go but I would be looking to take profit a bit earlier than normal Especially in the afternoon once trump starts tweeting and these comments start coming through As well having a final look over oil You can see not much really going on here if you're looking on the 60 minutes getting squeezed from both directions We had this trend line on from those lows yesterday. That's kind of but didn't really Get tested after hitting the one o'clock But we did come down literally Well 15 minutes or so ago to to have tested that so there you've got the third test of that So definitely had that marked up here on the 60 minute from the low the 6th to the low the 10th And then at the moment the low of the day a break of that and you'll be looking down towards s1 Where you'd expect some support and then really any of those lows that make up that trend line as well Pivot to the upside worth keeping an eye on just because it was some nice support Late last night. We retested it pretty well in the early session So around there 59 dollars pivot and a decent point of support turn resistance above that be looking at any of these points where price reacted quite well Following the the api last night. So of course keeping a watch on the doe later as well Quick look over the bigger picture. What's the Dax doing still holding above its Asian session high so as long as that happens You could imagine maybe the s&p is going to do the same and get another test of yes That is high and then keep an eye on those trend lines as well The pound is going to be interesting because you've got some really key levels of support below But you've just had a double bottom there. So can we come back now to test 131 33? And if that goes then suddenly looking at the gap getting filled gold has got some really interesting levels of support Just below if that is to break I think there could be a decent sized move As well you wrote keep an eye on that trend line for other than that I hope you all have a good trading day and any questions Please do let us know