 Okay, very good morning to everyone. It is Thursday the 7th of November. I hope you are well Big headline just come out this morning as we were arriving at the office China says it agreed with the US to roll back tariffs in phases And so before I go into the details here's how the market has responded across asset class a media injection into the Equity index futures. So you see the DAX NASDAQ and S&P 500 futures here a pop on the upside T-notes lower gold lower the Dixie Down and so consequently both major pairs euro dollar top left moving higher cable Also, just testing up it around its pivot and WTI crude as you would expect any De-escalation in the trade war would equate to a removal of those concerns about the impact on global growth And so oil also moving in tandem with the upside that's been seen In regard to equity markets. So, yeah a a sharp and positive response So far, so let me just talk about this news and what's happened first And then I'll talk about some things to consider and my thoughts going forward So starting off go back to the headline China in the US have agreed to Proportionately roll back tariffs on each other's goods in phases according to the Ministry of Commerce of China The amount of tariff relief would come in the first phase Set to be signed in the coming weeks and would depend on the content of that agreement without giving further details so for me the really important point about this headline that's come out is for one this is China who I would say has been a little bit defensive in this part of the most recent dialogue of trade that's been happening and and This is a positive step. They've kind of offered a bit of an olive branch here if you do this will do that however for me the important Player on the tariff side is the US and the US at this point have not yet confirmed that this is the Indeed what's being talked about or how close we are to in fact this actually being Implemented now as per the reasons which we went through in great detail yesterday. I think from the leverage point of view from the US And then also just kind of appeasing the domestic base in that respect. I just think it's still Definitely not a done deal. I don't think the US are gonna come out and just agree to this I actually think that you need to be very vigilant for any moment now going forward But I guess really in a few hours time when we start going into the early hours of the euro or the US open So from around 11 a.m. I would just be very Alert for what did the US say to this latest piece that has come out on Bloomberg citing Some of the the Ministry of Commerce comments from China overnight because for me I still find it a little difficult to believe that the US are gonna agree to this Because there's aforementioned reasons so if that were to be the case then obviously Pump and dump I guess we go back to this kind of very headline responsive world of Positive counteracted by negative remember There's so much Backstory to the political nature of what these two countries are trying to achieve as well as Mitigate the current economic downturn and with that being said I mean here's a graphic of the slump in commerce US trade with China Obviously, we had the trade banners data earlier in the week. I think it was it Tuesday It tumbled in September And so definitely You know economic stress When it gets to a significant degree certainly sharpens the mind. I kind of think that's a real political Point of interest something like brexit for example as much as Brexit seemingly has become such an emotive subject where the electorate is so Full focused on this one singular issue that even though Boris Johnson's deal is worse economically than Theresa May's It just doesn't matter because people it's just about do it or don't do it kind of situation and all the rest is just Detail that's all well and good until people start losing jobs Companies start going out of business and the cost of living starts going up and people get You know there's a tangible difference to people's lives Then you'll soon see people fall into line. That's what history shows us. So here I mean certainly the intensification of the impact of what it's having on exports to China imports from China certainly would suggest then that You know deal making Could well be in the offing Given the fact that they they need to counteract this this impact that it might be having on that on both both economies. So That being said, I still stand by the point there. I mean Here one of the things I was talking about in a briefing yesterday Is the idea that I just saw the market was too overtly positive about the current state of play ie that we were kind of It was an impending inking of a deal on phase one. I just thought was Does the market getting a little bit ahead of itself? Now one of the things that was coming out late yesterday was this idea about where is the summit going to be now The latest reports have suggested that came out yesterday afternoon that trump and g May not be able to sign a partial trade deal until december Now the timeline obviously being pushed back and this is exactly If you follow me on twitter To give myself a bit of a shameless plug my handle is below, but yesterday morning. I was tweeting saying if I was a Audit negotiating table acting as a strategist for president trump I would be why on earth would I cut a deal now? I would absolutely want to take this all the way up until What is it the 15th of december when those tariffs are going to kick in? I would absolutely want to keep my weapon on the table Just to make sure that the chinese implement what it is that they're saying they're going to do and so It being delayed now these talks could be slipping into december I think is absolutely in fitting with that that kind of view. I think you know, you've got to adapt and use the to kind of art of the deal strategy In terms of game theory thinking about what the us are after and what the chinese are likely to do and so on And everything I think has played out in such a fashion thus far Now yesterday I was talking about iowa as one of the reasons of why I think it would be difficult for trump really certainly out of the What difficult one to manage giving it such an agricultural center for us exports particularly soy beans and those kind of soft commodities So iowa and alaska apparently now have been ruled out and I think that's probably Uh a better tactical move from for the us but also for china Let's not forget that you know chinese people And american people are very different culturally And the chinese do not like Uh to lose face. Let's put it And so being able to sign a deal on a more neutral ground or in fact even some locations in asia are being discussed Shows that they're in control of the situation because just like we talk about trump a lot Xi also needs to appease his political base back home in mainland china So one possible location on the neutral front that's being discussed is london Where the two leaders could meet after a nato summit that trump is due to attend on the third to fourth of december I think timing wise that works quite well because Definitely it doesn't mean that come the fourth the second day of that meeting trump's just going to sign a deal with But it means then well what we could have is the next three weeks of the ground work being set to really develop the Details around a lot of the headlines that we're hearing at the moment About the different phasing of potential cancellation of tariffs and so on that's that needs a lot of work This is just headlines we're seeing this morning And then the two leaders meet they kind of discuss the the top level finite points And then perhaps we get closer again the strategy being Keeping that cliff edge deadline is a is a powerful Weapon that I think the americans will want to have and then if there is a deal to be done It gets done at the 11th hour and if a deal does get done Again as we've seen before like this like brexit does the goalpost just get moved again And trump kind of manages the situation drags it out prolongs it a little more as long as the equity market stays where it is It's it's job achieved at the moment other possible sites that have been discussed here europe and asia But the former is more likely With sweden and switzerland among the possibilities. So again this idea of looking for some sort of political neutral ground I mean you're talking about london sweden or switzerland At this point there's probably the likely location. So Yeah, that's uh, that's the main crux of the matter This was the other headline of course what we've just discussed So my summary point here with this headline that's come out this morning is the markets have obviously rallied Now what you're seeing here is a little bit of consolidation of those initial moves. So gold Uh is still lower t notes still lower But we just I feel and rightly so the market is hesitant to really continue that move And I don't think it can until the us come out and for me on the on the on the balance I think that the us Uh are not going to play ball on this issue Even though that this might be the talk underway Even if it is I think the us won't want to show that they're so receptive so early if that makes sense from a political strategy That's my thoughts on that. So just be careful trade headlines will be key and the us responding I'd keep an eye out from 11 a.m onwards as we get into the early hours North america Other stuff we're looking at today. Let's have a quick transition to This is the the very useful i ng crib sheet for the bank of england. I'll get sam to share this in the chat Now while i'm going over it Sam if you could kindly do so um This is the easiest way I find to really summarize what you're looking out for now Long story short the bank of england is likely to be a bit of a bit of a non-event but What I do like with the matrix that i ng do is it just makes life much easier because rather than going through copious amounts of research They just structure it into a nice format of being Top dovish going down more hawkish as scenarios and then from left to right the key areas of which you need to be aware of when Looking and dealing with this bank of england announcement and remember the bank of england announcement today is one of the Eight meetings. This is one of the four where we get the quarterly inflation report now renamed as the monetary policy report Where they unveil their forecasts and we get a press conference of mark carney and the rest of his mpc crew So here the main subject matter of interest of course first and foremost is brexit How explicit are they how do they see the impact of that having on the economy Or can be quite clear to define how hawkish or dovish they are at the moment Because we get the forecasts We're going to get update with growth and inflation and then what about their forward guidance? What do they think about their rate hike path now i ng are going for the third option? Which is a hold in rates so to be clear the interest rate decision today for the bank of england is Absolutely going to be on a hold decision. There's no way they're going to hike or cut and It's almost definitely going to be nine nil They're just not in a position Particularly now with the general election happening in about six weeks time to make any type of decision Specifically on actual physical maneuver of their policy. So hold nine nil Eliminate that from the information you're going to hear upon the immediate release at 12 What you are listening out for then is a statement that they make and how do they describe some of these other things? And then with the court inflation report expectations are that Here's a look at the gloomy outlook. So bloomberg has surveyed All of the analysts on wall street and asked them What do you think about growth and inflation? Now given the fact that 2019 is near at the end We're focused here on 2020 and 21 growth 2020 21 inflation So these second and third one and then the two at the bottom And you can see the the yellow line sharply outweighs the kind of pink one That's showing then that nearly all analysts are expecting downgrades to growth and inflation Now how severe or not those downgrades are that could be point one of interest to dictate how then things might occur After that of which their description of brexit will be key. The other thing then is What do they say about rates now i and g saying they simply reiterate that gradual limited tightening may be needed um a more the most dovish Way that they could phrase their forward guidance on rates would be this top right hand corner removes tightening bias completely Risk one or two members even vote for a rate cut i.e. We get a a seven two split The most hawkish would be hints that market pricing is too dovish and signaling a rate cut is unlikely So again, it's very good to get the The kind of nuances of the language down And this is what makes obviously trading these monetary policy events can be quite tricky But if you have this crib sheet, it definitely makes life easier I definitely agree with what they were saying about a reiteration of the current stance on the rates um here What do I think about brexit or the base cases warns of a period of entrenched uncertainty But notes good news of deal being agreed because at the moment remember I think there is a degree of some neutrality or positivity because of the fact that a deal has been done in principle at least A little bit of progression from where we were with therese therese amaze Failure in her withdrawal bills and now we've got a general election of which the baseline scenario at least for the moment is that potentially this could sort out the impasse in parliament now one thing I would say with that is obviously The election at the moment the pound's been quite a bit more quiet because it's not really going to ramp up until A few weeks time when we hit the 12th of december on election day um one thing is though is that there was a Down tick of about two points for the conservatives in a poll that came out of sky news yesterday One of the things you probably would have read about was jacob reese mog just basically making some Pretty mismanaged comments about the people who died in the grenfeld tower Which is definitely not what borris is going to be wanting going into an election campaign Everyone knows the score with jacob reese mog, of course it kind of Really the press have latched onto it because it solidifies this idea that the conservatives are so out of touch With the normal man. It it couldn't be any more different Uh, I think he was saying something like You know, why would you be so stupid to stay in the building? Why didn't you just get out and not listen to the fireman? Yeah, I mean I don't need to say how how much was wrong of that Given that you're at the moment campaigning to win a popularity contest Definitely is not going to do you any favors Uh, but these sorts of things the you know, tereza may when we had the snap election in 2017 It was conservative complacency that really killed may as well as corbin galvanizing the youth vote Uh, tereza may did a pretty good job at just basically, um Going against the the older demographic by things like the dementia tax and things like that But also I think a degree of complacency now. I think boris is going to have learned from those lessons But he's got to reign in That type of comment from jacob reese mog if he's going to get this done and secure that majority Um, this sort of thing's not moving the market right now. Tori still have a significant gap in the polls And I don't think polls generally speaking Uh, uh that market moving not unless they really start to converge or diverge to a significant degree But if they remain around this seven eight point gap, I think that's the that's not going to move the market for the time being final few points Pretty seesaw in oil oil prices yesterday Particularly to the downside decent sell-off on the fact that you had what a build of 7.9 million in the infantries That was accompanied by the fact that it looks like opec are going to roll over Their policy that is existing at the moment. I think their meeting is on the fourth fifth of december So just about a month away and there were some growing expectations that they were going to do more in terms of the degree of their output cut But it looks like they're not going to do that um, so Little bit of a reversal on the back of the chinese comment from the commerce ministry this morning But we're trading around pivot in the future sam will talk about it more technically But we are still more Uh than 60 down from the high point from yesterday's session before some of that infantry data came out We saw some of the technical breaches on the downside Great look at earnings. There's been quite a few coming out of europe Some of the main movers unicredit the italian bank up about 4% Seamans are actually up 2% better than expected profit comes though with a gloomy outlook But as I said, uh, they beat their profit estimates led by health and software Um, the other notable names lvmh up about one Rolls Royce and a footsie down about three percent Uh are some of the headlines That's pretty much it in terms of the the news coverage from my side quick. Look at the calendar. What else have we got? Bank of england, of course, we've discussed midday, but then you get the Um monetary policy report press conference now, which will be at 12 30 So do keep in mind that's a two-part event in that respect And not really expecting Anything at all in terms of the rate and the vote split very much expected to be unanimous US data as it's thursday the regular weekly jobless numbers We've also Got consumer credit later on but that's not really a market movers. So actually it's pretty quiet in the us front And speaker wise Other than carney later on you've got feds cat plan who's going to be a voter next year. It's going to be later on this evening And then christine the guard as well is scheduled to speak at some point today But no definitive time as yet and some spanish auctions hitting the market as well this morning So actually I think the balance of power for the overall cross asset class an intraday sentiment resides on what the us have to say with this As latest kind of olive branch if you like from the chinese Where apparently the two have agreed to proportionately roll back tariffs on each other's goods in phases According to the chinese side. What do the us have to say? now again not to Push my view too much. I think better to be responsive to the headlines US confirms this is the case We get an extension of the moves already occurred this morning If the us downplays it we get a reversal of the moves seen this morning That's the most binary way. I'll look at this Timings wise. I'd just be alert from any time from around 11 am onwards london time All right, that's it from me hand you over to sam. Have a good day ahead. Thanks guys Good morning. Let's have a a quick look. I guess equity's best place to start considering the the mooter all-time highs in The s and p again and we're just nicely above The the r1 which is in fairness has been relatively choppy. We have a look at this how it's traded since the original push higher and It's been a hard one to get hold of I guess in the morning and trying to get a continuation through just maybe breaking above here, but A hard one to judge where this could really go until ant was saying the us Come in and comment. We're Obviously got some important levels if we have a look to the left hand side Here and the the higher the fourth and the fifth that's acted as an area of support this morning When we've come down, but then You can see I literally just hit that now So this could be the point where you know just looking from a level perspective the reason why we have found The buyers to come back in again So more just technically moving here if we were to push lower at any point As well. I'll just be keeping an eye on the the previous Highers here From yesterday evening. It's coming in around 30 78 looking on the hour. So a couple of key levels that have obviously held quite well So far this morning in terms of where we could go to the upside It's always a pretty tricky one when you're just making new all-time highs each day and No harm in let me just remove the studies here Just seeing if we can get any sort of trend line on and Here just looking on the 240 Let's have a look we can get anything Not for for quite some time. So for now it does seem that stocks are Target-wise are going to be Limited I guess you probably work actually having something like this on the higher there the first of october we Respected it well a couple of times since so that's coming in not far away from the the round number of 3,100 as well so One to keep an eye on the DAX and other equity markets Completely following suit as well. You can see a really big push for the DAX this morning on on those headlines and Also, you can see this trend line here from the high at the fourth to yesterday's high Came back found support not long ago on that once the trend line For whatever reason there you can see a disappear. Let me just draw that on again here There you go. It looks pretty much bang on So a good area support line in the center to have on I would say with Equities pushing on obviously gold could well come under pressure here And it's probably worth having on a bit of a trend line from those lows to see if we can start getting some Sort of respect from that. You can see here. You got one two three tests. It's not the cleanest It has to be said but the way To look at gold may well be just on a break of one of these opportunities to get short Rather than looking to get in In the middle of this mess now you can see we found a couple resistance points and Just by the pivot as well There could be another area to consider but unless we get out of there I'm not really looking to to be too involved. You can see it's just making its mind up Shall we say oil as and said was near the pivot Still trading there decent move lower. Yes, they post does and Completely made sense the final move has to be said and a couple of times We've tried to get above what was those the previous lows from yesterday morning And then afternoon before the announcement Held relatively well worth keeping an eye Just as a couple areas of support below where we're trading by 10 ticks or so But oil you can see over the last couple of days What should we say this week? Each time we have made a new high So going Monday Tuesday Wednesday You can see we just come back down into the afternoon and the failure to really push above That level could be quite significant by the end of the week. You can see Here now looking on 240 You've got those highs from the 24th as a decent area back in the Beginning of October so to be above there a few times as we can failing to close Would be pretty significant. So an area I'll be keeping an eye on come The end of the week But yeah a couple levels to be aware of literally where we're kind of trading now and and those highs And then down to 56 56 below where we're trading the pound We'll see ahead of the Bank of England Probably not going to be the best opportunity to trade that even At at 12 o'clock when that announcement comes but again similar with a couple of the dollar pairs just Pushing higher this morning of those those comments. You can see where we're trading now looks quite similar to Oil almost with those previous lows It's a pretty key point and the pounders actually behaved relatively well technically when we have broken Previous lows like you saw yesterday evening We just come back for that first real test there So we'd expect it to hold for now in terms of levels to be aware of well Obviously the the higher point of yesterday is the current low from the retracement But back below there. I'll be looking towards 128 64 Definitely feels like there's better markets to trade other than pound at the moment I reckon until the polls start getting serious or have any sort of change It's just going to drift towards the the election The euro decent push lower yesterday Well limited it has to be said but a decent move from the pivot Which I know a few people got in and the the move to what would have been when when looking at yesterday The previous days low from Tuesday did take its time, but eventually got down there At half five just coming back to retrace here on a bit of dollar weakness. So This area similar with the pounds from previous lows Another test of this could well see a move higher and our one looks like a good place where it could then slow down a touch as well So a quick look over see how yes and peers behaving you can see here It's it's while it did find support on that point I think no harm it does stay in On the side does until we get a bit more confirmation from certainly the the u.s On this deal As for now, it's just trying to take in whether it's going to be have a follow through or actually We actually look for that retracement all the way Any questions as usual? Please do let us know Obviously we'll be on the the mic throughout the day and looking forward to the bank of england at 12 But very much looking like it's going to be a non-event that I hope you have a good day And I'll catch you all in the chat