 All right, very good morning to you. Hope everyone is well. It is Wednesday 3rd of July and as you can see to the side of me, this lady, Christine Lagarde, has been nominated as the ECB president role. Quite a surprise actually. She was on the list but certainly wasn't on what I'd classified as the short list of the hot contenders. So this has come a bit of a surprise for markets and will probably spend the bulk of my time talking about what this means for potentially ECB policy and subsequently market reaction to what a Lagarde presidency at the ECB could mean. We'll have a quick run through of her background. Otherwise, there's a few other things. Earning season actually starts at about two weeks time. There's been some interesting developments ahead of that. What I would kind of look at is pre-positioning from a corporate perspective as to what might be then a pretty, let's say, weak quarter in terms of not only the performance for now, but more importantly about the forward-looking expectations for profit over time. So we'll have a look at that. We had the API all of the trees overnight. How did they come out? And then we've got some UK data coming, which could be particularly interesting given how weak the PMI data has been and with the comments from Carney yesterday, putting the pound down at its lowest levels now, where I'm speaking at this present point than where we've been in the last few weeks. So that's what's on the agenda, but let's kick things off and quick overview of the charts before I go on to Christine. And this is a fairly, very flat open. I guess the one thing that does definitely stick out here is the fact that gold just continues to accelerate overnight. So that momentary for a below the 1400 level has been particularly short-lived. When we broke below there, I mean, check out yesterday's session. What a beast for gold. I mean, we were down in the futures space at least at a low of 1386, managed to hit a high of 1424. That's a really strong move. Not often you see a one single candlestick print like that on a daily. Interestingly as well, with that, T-notes back on the ascent as well. So any, you know, this was that the gap down that we saw in the 10 year on the back of the fact that China and the U.S. have put a temporary kind of hold on any further escalation on the trade war and hence equities gapped up, T-notes down, but you can see quite quickly filled the gap came back down to that what was on what would it be Monday's session, the respective S2, but since that point, breaking that range on the retest from in the overnight session on the first and then we've just continued to push higher here and trading above the R1 this morning. We'll have a look at the federal funds futures. So in the short end of the fixed income curve, and we were talking about first thing on Monday about how people were kind of pulling back on their bets on a 50 basis point rate cut. Well, that's changed again and we'll have a look shortly, but the odds have increased. So reversed any move to what we saw in the initial knee-jerk reaction to any positivity from the developments from the G20. Otherwise, in the equity index futures, it's pretty, pretty quiet. European futures off to a slight positive footing. U.S. pretty flat overall WTI crude pretty sideways overnight irrespective of the fact that we had, as we'll see in the API is another drawdown last night. I'd say yesterday continued to come off that kind of buy the rumor sell the facts on the conclusion of the OPEC meetings, not really coming of any surprise, their decision to roll over the output cuts for another nine months. But let's have a quick chat about Christine Lagarde because I talked to Sam this morning and just having a quick look at Twitter this morning and she is getting a lot of stick online, which I feel is totally unwarranted because my view is and I'll discuss why I think she is an excellent choice to become ECB president and I'll explain myself and why I think that. So what I've done here is I've kind of constructed a little list of pros and cons and then importantly what does it mean for markets but starting off with the pros I remember so I started in financial markets as an analyst in 2006 and I remember squawking about Lagarde a lot pretty early in my career because she spent what the best part of three years working as the French finance minister. I think it was from 2007 to about 2010 so I know her from kind of back then so very familiar with the type of way that she explains things, the type of terminology she likes using, her ability to communicate. From that point though importantly she went on to steer the ship at one of the largest kind of economic organizations in the world and that being the IMF which she has been in control of and worked at from the last eight years. Her previous background to these more I guess financial oriented roles where she's used to work in the legal world so she's a smart cookie to boot as well as being quite experienced in managing an organization on a large scale so she is definitely not short of experience in that regard and as I said one of the most important skills of which I think she's got in spades and is the most important for an ECB president is she is an incredibly skilled communicator. I'd say she's articulate she can perform under pressure being from a political sphere obviously she's used to taking questions and being kind of people trying to kind of poke her for a reaction so she's definitely well equipped in an area that I think usually most candidates for a senior central banking role are incredibly short of. If you think of Jerome Powell one of the biggest question marks is he's not short of experience it's is he or does he have an ability to be able to stand up there in front of a microphone in one of the world's most important influential positions and not buckle it's not that he doesn't know what to say it's how does he say it and I think actually a central banking at a presidency level I think is all about how you say it is almost more important than what you're saying because the what you're saying is constructed from your team from your debate that goes on from a European council wide level and I think that is an important point because a lot of the criticism that's been thrown her way is that well that's fine people know who she is and they know she has some gravitas however she has no monetary policy experience now I would say well you don't need you don't particularly need it because it's not you singularly making monetary policy decisions your role as president is to guide and share meetings of all of the European council members and so you use and adopt the team around you something which he's been particularly good at in managing her role within the IMF so I definitely don't see her lack of monetary policy experience as a as a as a bad thing or thing that's going to be a restrictive factor because I think her management skills are are high enough that she can she can use the team around her to to fill that gap so you know she's not well known in monetary policy she's not particularly well known as being the forefront of the world's most kind of leading economists but as I said I don't think that's particularly a disadvantage in the sense that she's going to be well surrounded with people more than capable of those skills now the other thing here that I think is a great asset is that she's worked in the political world for such a long period of time as I said she was the former French finance minister she's worked in the IMF so she's been involved in things like the bailout of the structuring of the Greek sovereign bailout the Portuguese the Irish she's had to deal and be there in in like the G20 she was in the family photo in Japan and Osaka so this is an important thing she is already well known within those circles she has proven to be quite a slick negotiator as well in order to restore credibility of an organization like the IMF which had come under heavy criticism over the years and so again actually I think that given the state of Eurozone global politics I think having a skilled politician is actually a clear advantage because we're going to have to deal with Trump over the course likelihood when he gets his second term for the next five years you've got this kind of surge in European populism kind of epitomized in the the issues politically being this confrontation between Brussels and Italy in particular and so then you've got Brexit of course and I think having someone of her experience in that area I think even though of course politics and central banking is supposed to be independent I think being equipped of the skills of understanding nuances of the other side of the table I think it's going to put her in an incredibly strong position and then the other thing you know absolutely championing diversity in some of these most influential roles globally I mean being the head of the IMF is one thing becoming the ECB president really puts you up there on the pedestal of from a global influencer puts you right up there probably in the top 10 I would say and absolutely let's put a woman in in charge of the ECB for the first time ever and it's going to be alongside I think it's the German defense minister taking the role of the the European presidency as role as what role as well so I think that's a good positive step given how dominated central banking is by males in that in that respect so all in all what does this mean for markets well Christine Lagarde is or has been an advocate of quantitative easing I would say that I think two things that are important for me from a market's perspective one is everyone in markets knows who she is and I think she is very well respected within those circles in the powers that be from a from the clout in financial markets so therefore I would say one of the biggest uncertainties you you always have when a new central bank head comes in is about how are they gonna how are they gonna be within that role and we've never really seen them too much they've always been in the background like a drone power Janet Yellen they've always been there but never really on the front front kind of lead role but she has been there and I think markets will take comfort in the fact that there's some degree of continuity that it eliminates uncertainties because she is a known figure so I think that's one thing so if you're looking for stability and continuity and hand over from drag at the end of the year I think you've got it in in Christine Lagarde and then the other thing is her monetary policy starts whether she sit on the scale I would say she probably sits more on the on the kind of center dovish side of things so remember the kind of situation of the juncture we face for Europeans policy perspective draggy is on the precipice of of cutting rates again as far as markets are concerned and potentially this idea of reopening the QE taps I would say if anything that should be of relatively smooth transition for someone like her to take over and then another big positive I think is that rather than have a Villaroy or a Weidman a former European central banker from an ECB board member point of view take over the head is that maybe it's quite good to freshen things up she'll come in sit in these meetings that she's never sat in before and be able to manage them in a way where she can hear all these arguments between the north and southern divide and and see what the best course of action will be but I think she is perfectly equipped both intellectually both from a management point of view of again filling the gap of her lack of any experience if that were the case in monetary policy on an economic side of things and then overall she is a supreme communicator which I think is one of the greatest skills a central banker must have so yeah that's my thoughts on her I'll move on but hopefully that gives you a flavor of what to think from a market's point of view no massive knee jerk rash on the back of this news but I think it's all but a foregone conclusion now that she will take that role a few other things I wanted to cover and I'm going to whip through these because I definitely want to keep this to under half an hour for me and Sam but oil weighed down as global economic gloom rains on OPEC's parade this is one of the headlines on Bloomberg and the interesting graphic that they're running is this which is a bar chart going back for the last I guess five years and what it's encompassing is the price change on the day of a decision from an OPEC meeting and so here you can see WCI crude as in yesterday had one of its worst reactions to an OPEC decision since going back to 2014 so that made me feel bearish on oil well yes and no I would say everything needs to be taken in context and what this this bar chart certainly doesn't tell you is the type of movement that was seen prior to then the sell-off i.e. we might have rallied 20 bucks and if it comes off you know five percent well then I mean we did rally 20 percent so I think this is a little bit of a misleading chart in that sense however I think what is interesting and I was talking about this in the briefing yesterday was that the market's response seems to be that you know it's almost given now the OPEC are going to have to keep rolling over the supply cuts which does run down their options I feel going forward that they've got to do something a little bit more powerful to change up and to get a market response if they do want to support prices going forward one thing we had last night we did have a crude drawdown in the apis of five million this comes in the back of course of that whopping draw of 12.788 million we had in the DOEs if you remember which was also a draw of about seven and a half million in the apis last week so that continues to be fairly significant in the magnitude of drawdowns and yet the price doesn't respond so I do think that that is interesting from the perspective of the fact that you know beyond the fallout of the G20 and all these different things I think markets are fairly concerned about this idea of a slowing economy and the pace of which it is now in contraction in some economic indicators like the PMIs that we've been seeing and so this having a direct consequence on demand diminishing at least from a market expectation a supply and demand equilibrium so despite big drawdowns and despite OPEX commitment the fact that oil hasn't responded in kind I think is quite telling of the current state of play on people's perception about forward-looking growth potential and on that point this is a quite interesting article as well in Bloomberg talking about grim earnings forecasts are getting worse by the week and the stat here is the earnings season starts in in two weeks obviously a very important part or time of the year and more than 80% of companies have cut their earnings outlook now this is what that looks like so companies cut their profit outlooks for Q2 at the fastest second fastest place since 2015 so definitely corporations on a kind of a micro level are having to realign and manage I guess shareholders expectations on the fact that look we too are also somewhat concerned and interestingly much like that Fed dot plot matrix remember that dips in 2020 but then rises thereafter the interesting thing though about the cutting of profit outlooks in Q2 is that corporations as well see a dip and then arise into Q3 Q4 of this year so is this kind of getting over that hump of the the kind of worst part and then better days ahead we shall see but I think quite a savvy move by corporates to start doing this as a consequence analysts lower their expectations so the bar for earning season has started to decrease meaning that then they can manage market's perception when they inevitably meet or beat these depressed expectations and even though the numbers themselves aren't great the markets kind of hold up so I see this is a little bit of managing of a of what a public listed company generally does but with that being said given the movement in oil and the reasoning behind it given what's happened with the corporate earnings you know after that G20 kind of knee jerk response at the beginning of the week I mean check out the federal funds rates we're now pricing back to a 30% probability of a 50 basis point rate cut at the end of July remember when we're looking at this on Monday that it drops under 20% so we've added another third on top of it to come back to where we are a lot of people looking at depressed US yields again and and evidently then the US Tino outperforming this morning again up about seven and a half ticks a few other headlines Bank of Japan policymaker speaking overnight could maintain current ultra low interest rates beyond the time frame it now sets according to a board member overnight how is the yen reacted to that well it hasn't I think this is kind of the status quo with much of the major global central banks whether it's the RBA, RBNZ, Japan, ECB, Fed everyone's now erring on the side of caution and so I don't think comments like this are particularly surprising but worth just mentioning and then following up with this idea that the PMIs have really been evidence of this this the the fragile nature of where we are economically globally China's service sector slowed to a four month low in June on subdued foreign demand while government policies boosted new orders as according to the case in the private survey of services PMI overnight one thing that I am interested to look at those we go forward into today I'll leave the cables set up for Sam but you've got the service PMI coming out of the UK at 9 30 and I do think that will be particularly interesting and I think Mark Carney in the Bank of England already really know what this data is going to represent and that is potentially the same as what we've seen with the other PMI data this week which is let me just refresh your memory of the current status of the UK economy UK manufacturing PMI downturn deepens as the PMI falls to its lowest level since February of 2013 output scale back as new order inflows contract business confidence dips amid ongoing uncertainty so manufacturing lower since Feb 2013 construction output yesterday falls at the steepest rate since April 2009 new orders shrink as political uncertainty hits client confidence sharpest drop in housebuilding in three years you know so Mark Carney yesterday talking up the prospects of potential easing I think is just a fair reflection of the current state of the UK economy with these forward-looking indicators really now starting to fill reality bite from the Brexit uncertainty and the service sector I think you had the BRC shop price data overnight again showing that prices are falling would be indicative of diminishing demand and so therefore potentially could see some downside in the in the services number but really as as we are aware of given the composition of the UK economy the service number is the most important be interested to see whether or not it follows suit would do we get a kind of straight run of these negative PMIs which could further accelerate the kind of more twist from being fairly sounding hawkish just a week ago or two weeks ago in the Bank of England had their rate decision because of wages and potential inflation to now being so overwhelmed by not just political uncertainty and the idea of a no deal prospect rising under Boris Johnson premiership but also now the real weight coming in and clear empirical evidence in the data set so that's going to be a key thing to look out for that's coming out half nine of course the European ones are final figures so wouldn't be too stressed about those the UK one more interesting as we go into the afternoon you've got ADP national employment remember you do have non-farm payrolls on Friday even though US markets will be closed on Thursday um you've also got the weekly jobless claims so ADP 115 jobless claims 130 CAD trade balance as well you get the market service PMI final reading at 245 but more interesting will be the ISM non-manufacturing PMI and factory orders coming at three and you get the oil infantry data at 330 so a really good day in terms of scheduled events plenty to go out this afternoon ADP key figure factory orders ISM non-manufacturing are your highlights with the oil infantry's as well so quite a busy afternoon speakers as well Bank of England out in force so if this services number was particularly weak it could be interesting to see whether they add anything further to what Carney was saying you've got Cunliffe speaking at 11 a.m. Haldane at 20 past 12 you got Broadbent speaking at 115 so they are out in force the MPC so keep an eye on that if you're trading the pound the final thing I want to say before I sign off for my part is that remember American markets close early today so the New York Stock Exchange instead of closing at the usual time London at 9 p.m. it shuts three hours earlier than normal so six o'clock so what normally happens on a day like this I would say that US afternoon so London time the kind of crossover 11 30 till about European close at 4 30 it's going to be very busy and then it's going to die out because people then in the States want to get away to travel to to enjoy their their fourth of July holiday so do bear that in mind with the types of trade duration and the timing of the strategies when you're on the execution side of things all right that is it from me I'm going to hand you over to Sam and I'm going to wish you a great day ahead thanks very much guys hi guys hope everyone is doing well have a quick look over the charts as how we're trading and some of the opportunities may come to light so I'm going to a quick look before we do so the euro to come into its lower point but the DAX pushing to a new high here new high for the day and breaking above the the little range that we were in from this morning yesterday evening and the high from yesterday push to push improve quite aggressively 30 minutes into into the open so a decent break higher there and that most likely is going to have a drag on effect on the US equities which had a good little finish to the day yesterday was stuck in a bit of a range between well there you go the higher the day in the lower day couple of false breaks pushed higher around half eight into the the electronic close and we're now just testing what is the well in a matter of seconds could be the all time high we witness in history right now before we go into some of the other markets I just want to bring in this this trade here and trading live was down so we couldn't post this in the in the room and it was one of our our traders here this is on their own account unfortunately for us but there's such a great trade and I was looking at it and when I first saw it I didn't really take into account just how good it was here you can see we might be able to see using the the gap field so for oil obviously we we gapped higher on the weekend or after the weekend to come back down and we didn't hit it until yesterday which is this line here so on the bigger picture you can see here this would be the way that trade was taken where the gap field which of course acts as a level support you also had s1 so that was the the first original long to target and we'll go back to their trade in a moment the the trend line sorry that had broken fruit to get down there around one o'clock so that was the profit target just targeting a bit before that you can see here they then turned it round to go short on the the retest of that trend line back down towards what was the low the day and that gap field and then got in on the the classic so the retest of the the s1 break in that little range as well and rode that down which was you know just an absolutely incredible trade so well done to that person they're in the trading live room now so if you they want to admit it themselves absolutely they'll be after my job i'm sure very shortly so really good trade there on that one for oil and just having a look at the oil market now i mean could we get back up to 5824 that would certainly be a level to have have an eye on should we at any point do so however we are here we go yet well done all of that great trade on that and just having a look at these lows here being a couple of opportunities with those breaks hasn't there of the trend line each morning so just be keeping an eye on this i know the volume is not going to be at its highest but something to to have marks up that trend line from those lows and to the upside with perhaps getting squeezed in as well probably best off waiting either way for for a break before really getting too excited and i would say this was the same for for equities yesterday albeit you know it was short lived on both sides but you had the the sort of quick fire moves so we had the breakout here of of the the little pennant up to the high and then to the downside to the low of the day so decent decent opportunities come from from these these breaks although of course you're not necessarily looking for these long lasting moves there you go new all-time high in the s&p keeping an eye level wise you've got eye up the the pivot yesterday's highest part a decent bit of price action around that point and lower the day pivot yesterday's high should be a nice enough area if we were not to get there it's lowering that that time frame down and i mean you could argue we had a decent little breakthrough here and you can see the reaction all morning so that might be something to have eyed up should we come back to that point but of course better to trade in the afternoon and even so with uh independence day tomorrow maybe we're going to see a bit of the sideways range for that but on all-time highs at the moment all seems well and good for equity markets at the moment having a quick look over to currencies here um you've got that euro just finding a bit of support on what was a previous high let me just move that above the uh the camera on the 19th previous high uh that we found on that day there so finding a bit of support there s1 just below to the upside obviously keeping an eye on yesterday's lows and also the levels that we had broken uh through in the early part of trade this morning you can see again these trend lines working quite well in early trade not perhaps get in the retest of that unless it happened in this 15 minutes so that's something as well that i'd have marked up and if you do think we're going to push higher uh again uh trend line from the the top of break with that you might see a bit of a relief rally uh for that pair for the pound under pressure 930 keeping an eye on and the speakers as well um maybe not necessarily wanting to get too uh involved aggressively uh now but we are just breaking through the s1 so you know finding a bit of resistance on that point other key levels to the upside should we get there yesterday's low morning low decent break around 7am and we're also sticking to this trend from uh yesterday evenings high and a couple people took the s2 long trade target in the low and s s1 which you know was a was a great trade and you can see why we found resistance up there to to drift down so this trend line i would still have on uh for that as well uh i'm going to quick look over gold just to wrap it up because i know we have taken a bit of time similar in this to oil with that you're just getting squeezed from both directions yes the volume isn't going to be there but maybe a little trade either way on the break potential break of that isn't a bad way to look at things what a day yesterday for uh gold incredible push uh it filled the gap and then went some just like the the yen here yesterday you can see it filled the gap and then went further on to be honest both of those trades as you know places to have gone short on on the gap field you would have got a decent you know amount of ticks on that as it came down and the break in the classic and the push higher for for the for both of those trades was not a bad one uh at all the yen is finding a bit of resistance this morning up on the high that we had from the 28th that there would be a key level was also it was a high from the the 26th afternoon uh to the downside and it is quite a technical market the end i'll be keeping an eye on yesterday's high that we did then break through in the early hours of trade as a potential area of support um hope you all have uh a great day um any questions as usual please uh do get them in the chat certainly the calendar in the morning uh looks quite interesting from well now really you've got the the french german european and then uk uh numbers coming out and then we have the adp obviously 115 130 245 data so decent data day and of course even the three o'clock numbers before the oil at half free so yeah remains to to be seen the the extent of the the moves that we're getting maybe post 3 34 o'clock but certainly on the lineup it looks like it could be a pretty decent day all right but i hope you all have a good session ahead and any questions please please do let us know