 Good morning. It is Tuesday the 21st of September. I hope you're doing well and Remember to breathe. It's gonna be okay stocks have recovered after US Indices as you can see here Felt they're most in about four months yesterday And in fact the close on Wall Street Yes, he was down about 1.7% pretty similar losses in the Dow The Nasdaq was underperforming down around 2.2% and of course all of this emanating from fears about the potential Contagion effects from Evergrande to the Chinese property developer and the real estate sector in China and What that risk carries then not just domestically perhaps for global markets as well So yesterday really saw the bulk of that and as you can see here It's the first time those three major indices have all finished lower for quite some time in fact in terms of the Three major indices finishing lower than one and a half percent. That's the first time that's happened Actually, since I think going back several months beyond that of the the sell-off that we had in the summer in July Consequently fit things like the VIX pops yesterday about 23 and a half percent highest level since May metal prices have also come under some quite severe selling pressure The impact then on commodity demand from one of the world's largest consumers, of course in China And their property market iron ore for example fell below a hundred dollars a tonne for the first time in more than a year But anything associated really with with building and development came under some pressure there in the kind of base metal space as well Couple of things then from a charts perspective I just wanted to talk about first and as you can see here We did into the final hour of Wall Street see some very aggressive dip buying And so just having a look at the charts here on the S&P and I'm also going to look at the European German DAX index For a bit of perspective now for one here just marked up a level here of a fib retracement From really the peak of some of the price activity from the second half of last week down to the bottom of the route That was seen yesterday and you can see here the 382 fib just providing a bit of a near-term area there of Resistance and support to price action as we go into this European open So in terms of the technical setup for today I'd be keeping an eye on there at 62 and three quarters of support followed by the pivot Which was an area of rough resistance support as well to some of the late US and overnight APAC session at 51 and a half Any further upside recovery? Obviously you've got kind of got this area here 43 80 which was around as you can see the low Before really the the sell-off took hold yesterday And also was an area of resistance as well as the 50% fib retracement of that move So over on the daily chart, of course yesterday We were watching that 43 47 3 quarters with a very keen eye You can see here that the selling pressure really took hold on the breakthrough of that low that we had in Mid-August and 19th and you can see that extremity of that wick But importantly we have recovered and we're bouncing still off that level And in fact you can see here top left on this S&P charts printing green at the moment indicative that we continue to Rebound from those lower levels in the DAX It's pretty similar if not even more poignant in terms of the the technical levels This you see here the DAX rallying in sympathy again Nothing new has come out in fact ever grand shares but down another 7% over night So it's a little bit of just dip buying mentality given It's the largest sell-off that we've had in a number of months in the DAX you can see really strategically key Level here that's held in yesterday, which was around the 15,000 psychological mark 15,017 was that low on the similar price Point at the 19th of July to where we were below yesterday and a bit of a bounce off that levels that level holding up and and rationale behind some of the Strategic nature of the dip buying that's Materializing at the moment. Otherwise then as the equities were Reverse course a little bit. We're seeing a little bit of a fatigue Just creep into some of the moves faded from yesterday So gold down about three dollars in proximity to pivot top right the UST note as well Just below its pivot down about six ticks as well this morning Currently wise not too much to speak of at the moment both you a dollar and cable Not too much going on cable perhaps just outperforming giving its underperformance a touch That was seen yesterday and for crude oil markets from a technical perspective Just keeping an eye here at around the 71 marker Around this 7107 you can see was a previous point of resistance support last week Held up really nicely at the back end of last week and as active as resistance since so as we come back up to the Higher bound of this most recent period of somewhat consolidation I'd just be keeping an eye as that as a kind of inflection point for price for wci today We're trading up 90 cents at the moment So again as per other instruments recovering a little bit from yesterday's route So a couple of things to look out for then I'm going to have a look at what happened overnight as I mentioned Evergrande group They did actually fall again overnight. They were down about 7% in Hong Kong trade again Remember mainland China is still closed for a holiday at the moment as is South Korea Credit markets also coming under pressure fueling concerns about broader contagion still within that region Despite the more broader asset class recovery we're observing at the moment this morning We did have s and p global ratings overnight Said the developers on the brink of default At this present point in time. So particularly new information there and hence the reason why I think it hasn't really had too much of a distinct impact otherwise What I thought was quite interesting yesterday was a bit of a split opinion for what comes next really with stocks and I guess short term jp morgan winning out they actually said That the s and p 500's worse drop that we've had in many months is an opportunity to buy stocks As the global economic recovery is poised to pick up in momentum. That was according to The strategists at jp morgan. They said the markets sell off that escalated yesterday. They believe Is an opportunity is what was primarily driven by technical selling flows CTAs and option hedges They were mentioning in an environment of poor liquidity and an overreaction of discretionary traders to perceived risks On the flip side There's not so much super short term This is more a call that MS have had for a couple of weeks now and they're looking more about the weeks ahead Their chief investment officer mike wilson Reiterated his call yesterday that worst case the s and p 500 could plunge more than 20% from his peak Scenario the strategist said looks more possible at this point in time So yeah, it's still a bit of a split at the moment on wall street in the short term obviously so far Initiated reading the fire final hour of wall street trade. We have seen some very aggressive dip buying come in Today will be really interested to see whether or not we steady the ship or do we retest back to the downside? Again, we're not really expecting too much in the way of any breaking news for evergrande But I would suggest a degree of vigilance in case the company comes out and says anything specifically or Something from the state of china Whether they make any definitive commentary will be quite key for market sentiment intraday The other thing we've had overnight is The canadian election. So prime minister trodo is poised to win the third term And the snap election but for short of regaining a parliamentary majority of which was the rationale behind why he called the snap election So that has not materialized Even with the minority though early results suggest the liberals will have a stable government Which will allow trodo to continue with big spending agenda that's largely being backed by his government's most likely partner The left-leaning new democratic party As a guide As much as this sounds quite messy the fact that they've failed to secure the majority The past seven elections in canada have now produced five minority governments So on average they've lasted about two years Minority governments generally outside of canada don't typically last that long given the nature of the fractured Political split, but the idea of being a minority government is not a new one in canada. They're fairly used to that So the actual reaction in canada and the CAD currency has been pretty muted I think that's to be as expected because I don't think really the election result has carried that much in a way of any surprises And we did have the rba minutes overnight Just so you're aware the osi not reacting the general take was a reiteration of the central scenario That conditions for rate increases will not be met until 2024 And the board is committed to maintaining highly supportive monetary conditions at the moment And of course that's as they've continued to tackle the recent outbreak of the delta variant in the country Um, the final thing that I did want to mention just before I go to the calendar was this Now I have shared this um article on my twitter account If you're not subscribed to reuters, just go on an incognito window Copy paste it in there and you'll be able to read the full article if you can't get access on the paywall Essentially what this is suggesting is the jp morgan Quant team so they run a model and the reason why it's getting a bit of press attention is because their model was particularly accurate Given the the big miss that we had an analyst forecast for the previous non-fampera's report, which was a big disappointment The jp model was actually pretty close And so people are looking at it again as a lead indicator as perhaps Something to be aware of that might be more accurate going forward. And basically um, what they're suggesting is that we could be heading for another Week jobs report number for september and we haven't got long to go obviously a week or two until we get that latest payrolls reading And that says well the reason behind that from a data perspective is that consumers appear to have dialed back their travel and leisure spending since labor day So the jobs tracker created by the quant team Says the fed by a range of alternative data including chase credit card usage airport security check volumes Suggest a september job growth number in the region of around 333 um, so Yeah, there's a couple of things in the article they they kind of detail out with some graphics and things like that the data points In which they're using Again, I think you take this with a bit of a pinch of salt. They were right last time The journalists are latching on to that. I'd like to see a bigger longer To kind of back testing of how accurate that that model has been over time because it doesn't really say that But I don't disagree with what they're saying. I mean some of the data of which they show Um, definitely has been showing signs of weakness and this is quite a key component, of course in regards to the labor market in the us and decisive Weighted measure of how the fed are going to be thinking around their timing of tapering and obviously we've got that meeting happening tomorrow night And it's this type of information Of course, not the jp model But the information the model is based on that fed officials will also be looking at With a great deal of scrutiny as to whether or not now is the time to be giving hefty signals into towards the timing of tapering Which the wall street consensus is from November commencement of the reduction of bomb buying So looking at the day ahead, what have we got? Pretty quiet really through the morning. We've got us building permits housing starts coming out of 130 And they've got ecbs de gwindos speaking Around this sort of time this morning nothing seen as yet of note Fixed income supply out of germany 24 billion dollars worth of a 20-year bond auction coming out 6 p.m As well this evening, but that's your wrap. So Remember if you are not subscribed to the channel, please do New briefings coming every day. You would have seen the last few days as well We'll be putting out any breaking news and evergrande or anything that really hits the tape that's of note And that's worth analyzing and making mark commentary on so Feel free to hit the bell icon as well to be notified whenever a new video comes out. All right guys Take care. Have a good day. I'll catch you tomorrow