 Okay, very good morning. It's Friday 22nd of May. I'm Anthony Chung the head of market analysis here at Amplify trading Quick word before I begin it is the final day of our current professional trader program So we've had a group of nine guys with us for the last five weeks fully remote online from really around the world different places And it's their last day today now of the nine. I'm pleased to say Six are looking likely to get backed by Amplify to continue trading with us. So yeah, amazing job by the team Is the number always that high? It moves around. I'd say that is a really good result to see that many people coming through and really being quite effective considering, you know, how how quite difficult markets have been from a from a judgment point of view So testament to them and to their mentors and well done for the final day Also as well on the YouTube Channel, don't forget to subscribe. We've got new videos coming over the weekend, of course So normal routine you get me during the week And then you get Eddie who's does like a deep dive into some macro topics that will come out on Saturday He's got a video talking about the Fed and QE and how are they going to run into trouble with that? What is yield curve control these types of subjects and then Sam of course if I just look down here He did the first of what's going to be many every Sunday He's going to do his weekly trading setups looking much more on the technical side And yeah, really well received last week. So long may that continue So as I said just subscribe hit that notification bell on the right hand side and you'll get all the alerts when things go live so Thanks for listening to that and let's get stuck into the actual markets What's happening this morning and certainly a little bit of risk off Tone to proceedings and this coming after a real focus not so much this time on the coronavirus actually on the continuation of the US and China relationship just deteriorating further Do we have the China National People's Congress the NPC overnight and that was something that markets were eagerly Awaiting and there's been a couple of interesting developments there and a mission of putting out a GDP target somewhat symbolic that really hasn't happened for many decades in terms of their usual practice of setting a Numerical target remember what I was talking yesterday about a specific figure for GDP and that gives markets Confidence then about the types of policies that they're likely to see and to what extent but the fact that they haven't done That is making people a little bit nervous and then as I said, you've got confrontation There's a Beijing passing a new bill basically in regards to as we've seen here It's impacting Hong Kong and a few other things I can run through But looking at the charts firstly Given what I've just mentioned Index futures are lower Overnight, I'll show you the chart shortly But the Hong Kong Hang Seng index underperformed down around five percent a little bit more modest and in places geographically like Japan and Australia still negative And looking at the US futures this morning. We are down about 15 16 points in the S&P and we're down about 132 below the S2 already in the futures in the DAX So a little bit of kind of a more classical movement from a correlations point of view From a currency perspective the dollar having a bit of a bounce back So up about two tenths So just imparting a moderate degree of pressure But if you look at the major pairs definitely a dollar inspired move Eurodollar and cable both down around 27 28 pips here in the top left corner Cable not really Flustered at all by the GFK consumer confidence reading overnight showing British consumer confidence down the lowest point It's been since the depths of the financial crisis over a decade ago The flight to quality bid just helping support gold prices looking to reverse course of some of the losses that were seen in Yesterday afternoon session London time and T notes up about seven ticks just closing in finding some near-term resistance Training a tick below the R2 in the daily pivots Also oil underperforming I'll get to that in a moment But again tied to just generally the reaction to what's happened in the developments overnight the announcements coming out of China So let's get straight into the news Stocks drop as China or Hong Kong shares lead fall in Asia China moves to impose Hong Kong security law as concerns grow Well, let's take this step by step the first thing here is you have the National People's Congress And this is a real staging post for the Chinese economy in terms of they set out Then the course of action that they foresee for the next period ahead and as I said one of the Unusuals things that they've done is they've broken their usual practice of setting a numerical target for economic growth now Got a quick snippet here from the latest Goldman's note that came out overnight And they mentioned two things on the GDP front They say by not issuing one for 2020 those arguing for a target believe that by not setting one That may weaken market confidence in further policy support mechanisms essentially You know by by defining say a level that they typically put relatively Optimistic it kind of shows that they're willing to spend Fiscally in order to achieve that target by not doing so creates uncertainty and uncertainty in market terms generally in the short term Creates negativity in terms of price The second thing that they said goldman's was that a special national bond quota was set at 1 trillion Remden be about 1% of GDP and this was the big disappointment for them They said that market expectations were more toward 2 trillion or more Based on some of the discussions that they were having with some of their clients and contacts and so on so about half the size so You know like what we're seeing with many other countries of course lots of bond issuance I've got to finance these you know huge Fiscal spending packages that are happening in various different countries at the moment But China coming out with a smaller size and perhaps not that certain about their economic growth potential over the next Period ahead for the rest this year has created a bit of nervousness in the market this morning What else has been going on while this is the other thing Beijing is using the legislative sessions to pass a bill Establishing an enforcement mechanism For ensuring national security for Hong Kong setting up a potential showdown of course with Trump It's been kind of simmering this week. It certainly has escalated over the last five days or so and Trump who's come under pressure of course in Washington to reconsider You know the next course of action and the announcement on national security legislation Has prompted then calls as per this headline for activists to start new protests against this security law And if you remember, you know before the pandemic this was going on for months in Hong Kong And so could this be reignited this weekend again for me personally any friends and family In Hong Kong, please do take care as ever But unfortunately, this is probably going to lead to some kind of backlash whether this weekend or in the coming days and weeks But just goes to show that you know, it's far from over here And there are many facets to this trade war that need monitoring So the hang sang was down heavily overnight. It did underperform This is looking here is the session that you had from yesterday's closed the reopening And it's just one way traffic pretty much to where we trade at the moment. As you can see it's still Down about 5% for the time being The other thing in response to this then and what is helping kind of further add Fuel to the fire is two US senators are proposing legislation to punish Chinese entities involved in enforcing proposed new security laws in Hong Kong And the law there that's being proposed would penalize banks that do business with these entities By partisan plan is one of the several at the moment targeting China in Congress. So as well as Trump Kind of having a war of words. There are actual bills here of a tangible nature that are being implemented or aiming to be And you've had that whole, you know attempt to try and delist a number of Chinese companies on US exchanges China have come out and said fine Will pull some of these big names like Baidu for example So yeah, there's a quite a few things to monitor here and on that front Five flash points to watch I did retweet this article on Bloomberg if you want to have more of a thorough read From the Amplified Trading Twitter account But basically they break it down into five distinguishable points that you need to monitor when it comes to the kind of news flow pertaining to the Spots of interest that could move markets and these would be trade Taiwan and Hong Kong on this whole kind of sovereignty and one China policy issue And how forcibly or not do they try to go after that technology, of course, like we've seen with Huawei the coronavirus and financial ties The US turbo charging its efforts Is what one official said To reduce the reliance on its supply chains on China and that is something similar what we've heard from the UK Prime Minister Boris Johnson in the Times this morning Ordering plans to end reliance on Chinese imports It's it is interesting. It's it's kind of a more tactile But but strategically the same Boris looking to align in a way that really kind of places China at the epicenter particularly with the coronavirus which is having such a devastating impact on not just the UK but the global economy and so it is Strategically from political point of view good to frame China as the the kind of reason or the originator of that And yeah, definitely less Confrontational and vocal than the way Trump's doing things But certainly follows a similar thing and this has got Dominic Cummings written all over it because this plan to kind of Reduce reliance on China for things like vital medical supplies other strategic imports They're calling this project defend, you know, that couldn't be more more politically driven it's kind of like take back control and these kind of very You know kind of word play to invoke a certain kind of type of public reception to these types of movements, so yeah, certainly This is a strategy that's being deployed But yeah, as per those five reasons, they're the kind of five things I'd look out for trade Taiwan Hong Kong technology coronavirus and financial ties Despite all of this though And everything that's being said and China warning that it will safeguard Its sovereignty its security its interests and it has threatened countermeasures. They've also said We will continue to pledge to implement the US trade deal amid these rising tensions So yeah, it's kind of a bit of an odd one at the moment. It's a relationship Out of necessity if anything, you know, we're talking about two of the world's superpowers and they're so intertwined particularly on the the area of trade the It's very hard to see what Trump had threatened earlier in the week that he could simply walk away I think that's just pure nonsense personally, but that doesn't mean that markets cannot Or are not susceptible to potential pullbacks here on escalation And that certainly is what we've seen and encapsulated on today It's kind of been building up and then the crescendo coming almost Here in the in today's session. So when I'm looking at the charts this morning one thing I am thinking is, you know, look, we've had We're going into the The weekend, you know, I would say it's probably Unlikely that anyone's gonna want a whole positions over the weekend just given the the associated risk of a further Development that would be akin to further escalation on this issue And so, you know, do you get a lot of people just closing out some of these short-term positions? And with that in part a little bit of a further run in this movement that we're seeing At the open this morning potentially Could be something to look at in that scenario Perhaps a bit more weight coming into the equity market fueling just general support then for Fixed income futures gold. I mean if you're looking at the SMP here just quickly We're just having a retest down At what would have been what? Tuesday late evening going into the Wednesday Asia Pacific session found a bit of support and a bounce there at around Lining up with DS2 in the futures But yeah, if we were if we get heavy and we start retesting down there When the US starts coming later and perhaps even towards the end of the US Wall Street session Then it'll be targeting probably around here and then And around these levels Would be interim targets, so if I just make that a bit bigger put some ellipses So you've got that high here You got the respective resistance and support points that were seen that's actually Monday session And then you've got that that low as well for Monday session, which was the high Going back to the previous week on the 13th So there would be some potential downside targets the market definitely If it were to come under some considerable pressure could see a pretty decent move today if the US come in they really buy into this notion of Clear escalation on that US China trade side Okay, what else is there? Well, you know, one of the other things here is that crude oil On track still despite the sell-off for its four straight weekly gain But you know, there's a couple of things to bear in mind here You know, it's very rare for a market to go up and up and up and as you can see the gains have got Smaller over the course of the last two weeks and where we were The other thing of course in the crude market is, you know, do not forget that China is the world's biggest importer of crude and so You know this dip that we've had overnight definitely has been triggered by all of the news that I've just been covering And that being then is that, you know, if China are uncertain about their economic future If they have then not issued an American target for GDP for this year If that weakens market confidence about the type and size of response they're going to do to in order to Create stability in their economy. Well, then oil prices have got to come off and particularly then in context of the The the sharp and steep Acceleration in price that we've had basically over the course of the last several trading sessions I mean, this is just looking at crude here looking at the July contracts You know, we broke out of that range bound trade that we were in generally speaking the 14th 15th And then we were at a price really has accelerated considerably So, you know pull back of the nature of what we've seen quite interesting again if stocks do come under some assault later Then I guess potentially then it's really around this the 31 type level which would encapsulate then that kind of Consolidation of price that we had over the course of the beginning of the week And then if we brought to break down below there could be quite interesting to see where we finish Final thing Bank of Japan did come out overnight They decided in an emergency meeting To launch a new lending facility that aims to channel more funds to small and medium-sized businesses suffering from obviously the Economic blow from the from the pandemic. I'm just looking at the Japanese yen though If anything it's moved in a counter-intuitive way. This has been more preemptive action from the bank to try and help Offset the negative implications of what's going on help boost the economy typically you would think well This is akin to easing and shouldn't the yen weaken but quite the opposite that the end actually strengthened in this case I think it's being overrided and dominated by the general risk of sentiment across the other asset classes on these bigger Macro stories and if anything the bank of Japan didn't change rates. It didn't change anything else Perhaps that being a little bit of a disappointment for those that were looking for more easing type more definitive action And that didn't materialize Canada wise for today, what have we got? UK retail sales is actually coming out Well has come out since I've really started the briefing and just to quickly cover that the pound We just show you as you can see it's really seen very little To no movement at all on the retail sale report and then I would say that's absolutely warranted that comes despite The fact that UK retail sales month-to-month came in at minus 18.1 percent Expectations were for minus 16 percent. These are April readings. So we knew they were going to be bad So it's always been very well much priced in at this point Other than that then we'll we'll move to the ECB minutes. We'll get those just after midday The US session is particularly quiet. Actually, there's no major US economic data today So all the more emphasis people might put on the China US kind of growing confrontation You would say it's probably Hard to go a session in the context of now and this news flow without Donald Trump saying something Going into the weekend Tends to be his general routine and practice. He likes to give that kind of show of force just to finish off the week For markets, you know, he definitely knows what he's doing in regards to the timing side of things So, yeah, I definitely keep an eye out for that. I'll share his full agenda I'll tweet it from from my account later. All right, that is it. Let you guys get on So again, well done and good luck for the final day for the guys on the pro course Look forward to continuing your journey with us for the next week If anyone else interested in getting more information on that just go on the website AmplifyTrending.com have a great weekend and I'll see you next week. Thanks very much