 Okay, very good morning to everyone. Thursday 23rd of January. Before I begin, don't forget to subscribe to the YouTube channel for our macro fundamental updates every morning and also live events. We'll be covering the Fed live in full next week and also the Bank of England. So it's a big week for those central bank decisions because those two, particularly the latter, the BOE is going to be very interesting. So don't miss out on that. But looking at what I'm going to talk about this morning, we've got a couple of different things. A bit of an update on the Brexit situation and also within that the trade situation between UK and Europe and UK and the US. A few things to update you on. Then going to have a look at an update on the virus. How is that impacting markets if anything at all? There's definitely a disconnect at the moment between how the local region is being affected and how that is playing out on the things like Shanghai Composite, for example, and the Hong Kong Hang Seng comparative to the overall global market. So we'll make a bit more sense of that. Then we've got the ECB policy decision day and so what to expect as a nice matrix I can show with you with the different things to look out for as a crib sheet. A quick word on Italy going into some regional elections at the weekend and then the Aussie saw a pop overnight to the upside. Unexpectedly positive jobs data creating then a rethink over the RBA potential action of their interest rate policy in the near term. So that are things I'm going to cover but before I get into that in more detail, a quick look across the different charts to give you a bit of a flavour for sentiment this morning. And relatively quiet we had a slightly lower close on Wall Street last night. Very marginal losses on things like the Dow for example. And overnight in Asia as I said the Chinese related bosses are lower still and this comes well let's just jump to that first story in fact which is here. This will give you a bit more of an insight as to the this is the Shanghai Shenzhen CSI 300 index and as you can see as the virus has developed and what's happened essentially yesterday is that Wuhan which is the apparent city of origination of this coronavirus is a city of roughly similar size to all of greater London if not slightly larger but it was put on lockdown and attempt to quarantine this this virus. So authorities have banned all transportation links so suspending buses the subway system ferries they've shut the airport train stations to outgoing passengers everything's been put on on hold in terms of the actual stats at the moment of where we're at with the virus just under 600 people of a belief to now have been affected it's reached all of the country's provinces now as well as obviously that one person in the states on the the northwest coast as we were talking about yesterday Taiwan Korea Thailand and Hong Kong 95 patients in critical condition and mixed reports but around 17 to 19 people have died so far so yeah with those numbers reason why I go through them is to me those numbers suggest at the moment this is still a very low level obviously requiring some vigilance to continue to monitor but I think you know between this chart that I'm showing you now and if I transition to this chart which is my charts showing the European US stock index futures things like the euro dollar pair cable oil T notes you can see there is a start contrast and I think that's kind of summary of where we're at at the moment this definitely is having an impact locally but it is not yet at the point where it's making investors nervous on a global scale just yet and unless it does spread into those other geographic kind of continents let's say I don't really see that happening at least for the time being so don't want to speak really too much more on that issue because I don't think it's really warranted at this time but again we'll keep you updated as it develops now otherwise as we look at the other asset classes things are relatively quiet if you look at things like gold sure it has ticked a little lower over the course of the overnight session or even from yesterday's highs when we were trading up to around 62 we're about $10 down from there at 15 53 at the moment the 10 years up a touch six and a half ticks oil down 84 cents there were some infantry data last night but overall it's still relatively quiet and certainly this has been a bit of a familiar pattern of the last week and a half or so really since the initial reaction to some of the virus headlines the signing of phase one deal the almost de-escalation of the Middle East which quite frankly no one's talking about now comparative to where we were just two three weeks ago it's almost like the market still is in a bit of a wait-and-see mode bit of indecision waiting for the next queue of something to latch on to and perhaps then the central back decisions next week could be that thing because as I've discussed not too much is expected from the ECB later on so I'll leave the chart set up to Sam let's have a run through then some of the headlines starting off with with brexit he probably would have read various comments from Johnson yesterday at the moment on track to deliver his brexit in regard to European Parliament now need to ratify the terms of the January 31st split this comes after the House of Lords back down on Johnson's EU divorce bill obviously they were and have been always much more on the remain side and so looking to kind of pick some holes in legislation in regards to the upper house on the government's bill but quite frankly the way that this process works now is that Boris has this resounding majority of 80 and so whatever they were going to do it didn't really matter anyway and so basically this has now gone through and it goes through the formalities for Royal Ascent and it has to go to the Queen she signs it off basically so as we've been talking about this Jan 31st is not really a a significant one from a trading point of view it's what happens beyond this and what happens beyond this really then is we we've got to start sorting out some trade deals and this has been quite interesting actually we haven't seen any real immediate impacts on the pound but there's been a few interesting developments Seiji Javed you remember the UK Chancellor at the weekend was quite critical about coming up to the standard requests for things like food requirements health and safety legislation in order to be able to deal with the EU's rules and that's caused some friction a bit of a standoff at the moment between the UK and Europe but now Seiji Javed has confirmed plans to introduce a digital services tax which will mainly hit big American technology corporations you remember this is something a similar route that France were going down and then the US came back with a whopping two and a half billion dollars worth of tariffs that they were going to put on a variety of French goods only for then for Trump and Macron to secure us a temporary kind of truce ahead of Davos a few days ago but what's happening now then is Mr. Javed has said that London would prioritize a post-Brexit trade agreement with the EU over a deal with the US and Stephen Manchin the US Treasury Secretary has not taken kindly to being put second place to the Europeans now from a UK point of view just given our volume of trade and the geographic location of which we have with Europe obviously Europe is the priority however at the same time you've got to manage the Americans and with Donald Trump in the White House who tends to be fairly volatile and very sensitive to the way of which he has dealt with is on a diplomatic kind of public level it's gonna be quite interesting to see how how that plays out maybe one of the reasons here I think Boris has ducked Davos I think that's probably a wise thing he sent the Chancellor so it's okay in my mind for the Chancellor to say these things because Boris can always say well it wasn't me that said that and I'm still best friends with Donald Trump so again it's kind of it's all strategy I guess negotiation in a way but yeah it's going to be interesting to see what the US have to say with being put second in that queue given obviously the Americans tend to tend to put themselves at the top of the pile one interesting statistic that I just wanted to show you and there's been a lot of question marks a lot of questions from some of our junior traders about you know why is the pound rallying when everyone's pricing in a rate cut and this is what I wanted to show you this is the the CMEs basically there it's very similar to the Fed watch tool that we look at but this looks at the not to get too complicated but looks at short-term interest rate futures so it looks at the Sonya curve when it comes to UK short-end rates and it allows us to see an implied probability of what the markets are reflecting in terms of their current price and positioning for the probability of a rate decrease from the Bank of England when they meet next week and here you can see rates coming in UK of course at 0.75% and just tipping on the balance is a likelihood of a rate cut from the Bank of England 55 to 45 now what's really interesting here is bottom box which gives you the statistics of the last month so one month ago to the day the price of a rate cut from the Bank of England was 5% I mean that's just crazy we've gone from 5 to about a week and two days ago or less than a week sorry six days ago we were at 72% and now we've gone back to 55% so yeah a lot of indecision being reflected in the markets in regard to what we think you know as a marketplace of what the BOE are going to do and so typically what would need to happen here is the Bank of England's MPC needs to come out and kind of relay some kind of guidance forward guidance in order to tip the scale in one way or another what central banks typically don't like to do is leave rate decisions right on the balance like what we're seeing priced in by the markets here the reason for that is it creates then a lot of uncertainty which means big volatility upon the release because it's a pretty 50-50 bit of which way it's going to go and that exacerbates the intraday kind of reaction to it more so what officials like to do is guide the market one way or the other so it's a nice and smooth orderly transition if you like between meeting to meeting but perhaps this is very reflective of the notion that the vote split is going to be so interesting next week remember we've had two dissenters for a long period of time but if you actually stack it up with the commentary that they've been saying or the commentary would be indicative of a 5-4 split in favor of a cut and that's very much what the markets pricing at the moment so yeah it's definitely not a done deal though it's not a slam dunk that we're going to see that and hence the reason why it's not just a persistent kind of weakening of the pound at the moment it's a lot more on the fence so yeah look out for that and any more subsequent changes in the coming days any bank of income comments moving over talking of central banks to the ECB this isn't going to take me long because ultimately there's going to be no change in interest rates or quantitative easing at today's event the main thing that people are looking for really is this this second bullet point focus will be on the guards plan strategic review and also as a footnote the guard basically as soon as she's done with the press conference she flies to Davos and she's giving a keynote kind of panel discussion with Steven Manchin of the US Treasury with the UK Chancellor with the Bank of Japan governor they're all going to be speaking together at Davos tomorrow but this is the best short form way of preparation for the ECB interest rate event this is always done by the Dutch bank ING and it's the most useful way I think to consolidate a lot of information to put you in the best possible position to interpret and trade this type of event if there is that opportunity and how this box is divided obviously if you're watching this on a video you can just hit the pause button you'll be able to digest it but here you have the four main kind of facets that comprise of policy within the European central bank so monetary policy can obviously be highly complicated so as a trader what you want to do is break it down and make it as simplistic into its definable parts as possible therefore it's much more actionable for you to cut through the noise in that respect so here you've got the inflation outlook the growth outlook the interest rate decision in itself and then also this idea about the strategic review what and when is that going to happen then you've got a scale top to bottom what would need to be said as a change to the current which is the orange at the top here phrasing that is the way of which they categorize each one of these these sections what would be dovish would be here what be hawkish would be lower down on the matrix and then the subsequent reaction the ING think we could see in euro dollar in the currency pair so yeah this is a this is a good way and then almost as the event is unfolding you can almost like tick off the boxes to get an overall interpretation of is this in line more tilted to be dovish or hawkish and therefore not just trading the event as words are being said sure that is one way of something meaningful is spoken but more so what could be then the trend that might materialize throughout the rest of the afternoon session after the press conference other final things quickly to mention BTP futures are seeing some some decent movement at the moment and a lot of this is coming ahead of and just to put this on your radar there are several regional key regional elections happening across Italy on Sunday now what's happened here is that the five-star leader Demaio resigned and that has caused now some question marks about the validity of the coalition government and obviously Italy has seen lots of political disruption over the course of the last several years so this is going to be very interesting to watch in particular Sunday's vote in the northern area of Emilia-Romagna could see Salvini's league defeat the DP Democratic Party which has been pretty much forever a historical stronghold for the DP if Salvini and the league which obviously has been Eurosceptic and if you remember he's the one that caused a lot of the issues and confrontation with Brussels about the social radical reforms that would have required much more debt to be accumulated breaching European conditions this could be then problematic and bring Italy right back to the forefront of kind of risk factors so that's not happening until Sunday but just wanted to mention that because local bonds in Italy are starting to see a bit of movement and this was the other thing overnight Aussie I'm sure if you've looked at your Aussie chart in the FX market has seen a decent pop on the upside and it has held a bulk of that move essentially unemployment rate unexpectedly fell and what this has meant is that more than half a percent what the currency has jumped more than half a percent as traders are now pricing in just 25 percent chance of a rate cut next month as of yesterday the odds of a rate cut were 50 percent so following this data the likelihood of an RBA cut has been sliced in half and so that being reflected and the Aussie holding firm for the time being and then DOEs are coming out later obviously had shifted due to the Martin Luther King Jr. Day holiday US markets were closed so this bumps all the oil infantry data back a day last night slight down tick and oil but very much following the trend lower in W2I crude futures you had a crude build of one and a half million surprise against the drawdown of ones that definitely bearish there cushing those a drawdown of 429,000 gasoline slightly bigger build as to distillates gasoline at four and a half million so those DOEs are coming out later this afternoon but that is pretty much everything from me I'm not going to go not going to bring up the calendar because I think we've pretty much discussed the main events that being relatively quiet for this morning got the ECB kicking off this afternoon of course from the US weekly jobless claims oil infantry data is one of the main focus and then Christine the guard of course the press conference that will commence at one thirty will be key also Angela Merkel does give a special address at Davos that is going to be happening at one fifteen London time as well to just be aware of okay see you in the trading live chat room any comments obviously watching this on YouTube just feel free to drop a comment and I'll be happy to respond by hand. Thanks guys. Hi guys hope we've had a good evening we'll start off with some of the currencies as that mentioned the Aussie last night or overnight should we say had a decent push higher looking at this more refresh these charts so you get rid of that that line so technically pretty key and obviously the the reason we've gone higher is all about that data and you would have wanted to unwind positions before of that but we also broke out this little trend channel that being guided in price really since the sixteenth so a decent push above there we then found support on what was yesterday's high and a fantastic move back up towards those those levels that we saw on what day we now Thursday Tuesday evening and I think as well that is also a bit of a fib level in there from the bottom of that you can see around the fifty cent fifth the R1 this fantastic opportunity more importantly I would say as well you know I'm just going to remove this trend channel and the pivots got a bit of a false break here now of this head and shoulders and just make sure that you can see that and not get the calendar the camera in the way you can see nice area where we've had that neckline you've got the two shoulders shoulders heads and we're now back above the old classic yes stay on that head and shoulders look to be good but of course the data comes out and you don't want to take that risk and we're we're now back above and trading at sixty eight eighty Euro actually you know over the last few days it's looked pretty similar to the Aussie and all it's done and you can see here a bit more choppy but similar price action and then you've got the sort of the shoulder and the head and we're now just trying to get below that area yesterday or I should say on the yeah yesterday was yesterday we found support on the Euro and on a level traded back on the 29th of December pretty key would have been the next area support for the move lower but you can see we're just sort of consolidating a bit as you'd expect going into the ECB we'll obviously run through this through trading night in terms of the levels to be aware of ahead of that release but I would be very surprised if we broke out the R1 or yesterday's low before we come to that point we are just getting squeezed you can see from the last couple of days anyway for the high of Tuesday worth having a little trend line on there yesterday's high you've already got the three tests yesterday's low you've already got the three tests of that coming in so prices is waiting to to do something would I want to be in a trade before 1245 from now for the Euro probably not probably not near to be a case of wait and see and and then react from that but if we were to have an ultimately dovish ECB or more dovish than expected well this Euro has got a fair bit of room to go to the downside to attack some of those levels last seen from last year the pound decent day yesterday and you know incredibly you know you look back at this this trend line I know and I'm bringing it up a lot but it's just the the significance of these technical levels regardless of you know the fundamentals that are going on if they don't break you can see suddenly good news actually starts to filter into the market and a decent push yesterday the trend line had held 130 as well in the mix there we're now trading 160 ticks above that level from 32 in the future is an area to now consider but just starting to consolidate around those highs from yesterday as well keep that just a little bit of a trend channel little flag up there to to have marked up for any potential move to the upside you'd favor yesterday's high and then the highs that we had back on the 8th of January of this month I should say as well so keep a watch on that break down to the to the downside got a couple of interesting previous highs to keep a watch on 131 and the high that we had on Tuesday probably the most notable support point there as well oil pushing lower and decent technical breaks yesterday of the the lows of the year and you can see that nice little set up push through and and continued we have bounced a tiny bit off the low this morning but looking at you know this this market here to get these trend lines on and in the weekly strategy report where we were looking at some of these levels you know these trends did get hit I know on the daily broken through a couple of those so here going back to that low from 2018 that would be one to have marked up around 55 bucks and where I would actually be pretty comfortable in saying we could find a level of support it would be the third test of that trend you'd also have some of these november december lows in there of course 55 dollar handle I think that could be quite a nice area where would you be comfortable you know going long above where you'd have to you know put this back on the 24 in say really where we just broke through around 57 70 above there fine we can find a bit of support but you can see the significance of that 55 bucks if we can get there gold before we have a look over equity markets just have a little look here put those pivots on gold really is is undecided isn't it I've been speaking to to people in in the the first stage of the the training program and just what what does gold really want to do if stocks are going to go higher then it's it's confused and should come lower but if the Fed are dovish and the dollars weak and you know people are hedging themselves for you know something bad to happen later in the year it's really undecided and you're seeing that here you're seeing that here we're getting squeezed from both ways if I were medium-term trading you know I really would just be you know waiting really waiting for you know a bigger move to happen we spiked higher but then obviously came down early hours a couple of days ago let's put this back on the 60 minute and lower that time frame today's higher the r1 previous highs from what we're talking here the 10th of the month it's pretty key keeping on this trend line to the downside because that could be an opportunity should that that go as well which we have seen on on previous days when those trend lines go in gold you can really get decent move so that's what I'll be focusing on lower you know shorter term trend lines from yesterday's low in the mix there as well to have marked up but some nice levels some nice levels s&p yesterday's drifted lower didn't after making a new all-time high when will we get bored of saying that key level to the downside though you know if you were of the the bearish persuasion you'd be happy to be you know looking medium term short below 3308 3309 today's s1 the low that we had Tuesday the high that we had on the morning of the 16th before we broke through into that evening decent area of support where you know below that fine we could you know get a bit of a drift lower you know got the double top from yesterday on the all-time highest bit of profit taking so at the back end of the week people maybe don't want to hold that risk over the weekend maybe more virus announcements comes out you know below there those headlines perhaps carry a bit more weight levels below there I would be marking up 3300 and and just a bit below that to below today's s2 as a as a key point and if we go on that daily chart where would I be a massive buyer of a dip well ultimately and I don't think we we get anywhere near this for a very long time but that top end of that trend channel that we broke through would be the the place where I really like I really don't think we get there for quite some time and and here just looking on the on the daily chart 3300 I like the look of and I would say also going back if we could get anywhere near 3263 I'd be be a buyer but I don't think that happens I don't think that happens I think we just will gradually grind higher and you know hit those milestones certainly in the down of the 30,000 there's still a level where I think could get drawn towards it would take its time but I think we do get there eventually relatively choppy on on trend lines looking here on the s&p but you know 3309 3298 and then 3300 and or above where we're trading when could you get a bit excited about the the push to to attack those new all-time highs pivot looks like a relatively decent area just above there you can see we had that breakdown yesterday so 3324 let's mark that up we're just finding a bit of resistance on where what's the high of the day you know failure to to push through you've got the double bottom in a bit of a range ECB let's see what happens there but some nice levels across the board just to wrap up let's have a quick look over at the DAX which I'm just going to put this on you know the weekly chart that is that we've had this week a new all-time high for the DAX as well the where we close the week will be key and if we were to close where we do now it's a double top it's a failure to push on and and technically is that the point where we start to drift lower ECB may have something to say about that just finding a bit of support here on the the lower 21st below there and here this would be on the more hawkish side of things if they were to go for it just keep a watch on the low of the 8th the low of the 14th and the lowest 17 around 13,380 pretty key level of support where you can see about a few few lows that come in around that area where would I be happy to to be a buyer I will obviously wait for the ECB if we were to get above I mean really here you there's a couple points where you know the yesterday's low into today's high 13 and a half thousand I quite like that if we can get above there I think we do to drift towards the pivot pretty quickly and you know above there well you're now talking all-time highs again hope everyone has a good trading day as usual any questions please you know do get them in the chat we'll cover the ECB through trading live around 12 30 12 45 and then the press conference but markets perhaps just going to drift into that especially the european ones s and p if we can come lower 30 309 the level to keep an eye on gold I'd probably wait and see oil 55 bucks a dollar below where we're trading now could be a very important level to keep an eye hope you'll have a good trading date and I'll catch you all in the chat later on