 Okay, very good morning Thursday 5th of March It's gonna have a talk through then sort of the main reasons why Wall Street printed the Dow Jones the stat I saw this morning was the 6th second biggest rally in the Dow in history And actually the past seven sessions have seen the kind of wildest price swings that we've had in the last seven sessions Since the inception of the S&P 500 in 1982 So a couple of stats for you So, you know if you are new to markets Quite an unprecedented time to have to have been involved and certainly a fantastic learning situation perhaps a difficult one though to To expect upon yourself Real performance, and I think that's quite a key thing. I think anyone who has been training over the last few weeks You know, obviously the benefit of experience is quite a telling thing But if that's not the case for you then you know, don't be too hard on yourself I mean the type of volatility that we've seen as I said Has never been seen before in the entirety of the existence of the S&P 500 So, you know if you're finding it quite tricky It's unsurprising if it's all kind of brand new and fresh to you So things will revert back to normality at some point, but Certainly the severity of yesterday's rally I think Caught me certainly a little bit by surprise I mean we're talking to a couple of the guys about this kind of range of consolidation The S&P was in but then as you probably saw there was a big headline development overnight where basically the US have come out and pledged Three times more than what Trump was asking for and proposed spending for the economy In order to counteract specifically coronavirus and that helping just fire things up in combination with The kind of big switch we've seen in the democratic nomination with Joe Biden now the firm favorite The IMF have come out and they're pledging also Monetary funds to those being hit by the virus and this of course comes in the context of the Bank of Canada The RBA the Fed have all been cutting and markets now are 100% priced for a Bank of England rate cut or sorry an ECB rate cut and also his price for a Bank of England rate cut so You know, this is the The kind of nature of what I guess markets were We're looking for from a more positive response was you know the disappointment and the sell-off from the Fed that we saw two days ago You know, it's quite different now because now you're getting a real coordinated and larger fiscal response And other central banks are starting to follow suit now as what we've seen from the RBA and the BOC and what markets are Anticipating as I said for those other major Western central banks. So This thing stand at the moment though. I think probably yesterday Might like what we've seen in other occasions But on the flip side, you know when the market does sell off a great deal the period thereafter you see a little bit of a bounce of normal just short-term Profit-taking on those speculative shorts. It's kind of the opposite this time round So these US index futures have just come off a little Or be it still higher than where we were this time yesterday Gold's pretty quiet. T-notes are pretty quiet overall, but both are down So it would be reflective of that general risk appetite from the Wall Street close So gold's down about five bucks T-notes down about eight But it's been pretty sideways price action in the overnight session and the currency market the dollar is pretty flat I mean in terms of the euro-dollar pair and cable Sam obviously in a moment will talk about that more technically But yesterday obviously a good test and bounce off that quite key level down in the futures and around the one 11 handle that was being the previous high that we had right at the beginning of this month and also the test that we saw at the beginning of the week and Rejection of that fail to break and it bounced back up quite meaningfully and we're back to just test yesterday evening or I guess afternoon US price action low that we had Cable a little bit about performance comes despite You know still a lot of kind of negative press I guess you're getting at the moment in respect to The upcoming UK budget that's coming out. That's obviously got to be pivoted more now to counteract in the potential implications that any type of Quarantine in areas of the UK to contain the virus outbreak if that does materialize the impact that might have in the economy And so on so banks like Goldman Sachs for example are now expecting I read a 50 basis point rate cut coming up in the next meeting which is on the 26th of March But irrespective of that I guess great deal of it is priced in to some respect at the moment. So a little bit of a break higher for the time being you can see there a relatively nice Nice footing that you've got technically I'd say for cable from some of the previous price action that we can see over The last kind of two weeks. You got that low here late Feb retest again and again Third time of asking really on a more come more firm test I mean a big sell-off on the break of that and now that key level has now turned support You can see it it reacted to that level really nicely in the age of Pacific level It's used it as a bit of a springboard to move back higher again So perhaps in a strong level of support for the time being But let's get into some of the headlines I'll leave the charts more for Sam to have a look at and this was that headline that really was the predominant factor that drove Markets higher yesterday And that was that the House of Representatives were approved an eight billion dollar spending package intended on combating The coronavirus including funds for protective equipment testing surveillance and so on To put that into some context obviously market moves against expectations last week Trump was asking for basically one-third of that amount and he's got three times more so great stuff for him in that respect that all politicians are kind of gathering round with a coordinated effort to Counteract what is I'm still anticipating a multi thousand type level of cases in America over the coming week or so And I think that's you know, this is why I think Trump has done a pretty good job Remember he held that press conference about a week ago When there wasn't really much in the way of cases at all and you might have thought well Is he gonna spook people but I think by just putting this coronavirus seed in people's head early and Allowing then him to come out get this job done on Capitol Hill for the spending programs You know as long as you can control the human both for markets and consumer their psyche Then you can counteract then this whole big sell-off and fear trade that we had last week And you know, this is what Trump is good at I think in in this respect So is it enough and you know do we continue to recover? I don't know yesterday was such a big move Just like we had last week, you know down days, you know one thing that's very common in markets Markets generally move much more violently going down than they do going up So after a thousand plus points second biggest rally ever in the now I wouldn't be my my statistics would show that you're probably not gonna get Another size of all day like that again but plan for For the different scenarios as we normally say so here Democrats also counted five hundred million dollars in Medicare funds So the actual total amount that they've passed in Washington is eight point three billion The other thing of course of which was getting attention was the in the briefing this time yesterday was Joe Biden Obviously taking a real significant boost and I did he performs particularly well But Michael Bloomberg pulling out of the race is now throwing his support against Biden It's kind of the the stop Bernie Sanders job by the more center Democrats the prospect of a Biden Trump showdown. I mean if you actually think about those two candidates It's the elimination of Sanders is which is very important A Biden Trump showdown whoever wins even though we're still firmly on the side that Trump will become the victor in the end There's a clear positive for markets And probably a small plus for the economy as well if you think about Biden in himself Has proposed tax rises, but they're relatively modest He's got a light touch on regulation Probably a softer line on tariffs on the global protectionist front that Trump's been doing and also He's probably gonna have to go slightly left in order to capture some of that vote As well to appease as he then fends off any attempt from Sanders going forward in the next couple of weeks. So all in all You know whoever wins. It's kind of a net positive in a sense and I guess that explains as well Partial of why we we rallied yesterday and then the other thing that's probably gone a little bit unnoticed was the IMF The IMF have actually unveiled a 50 billion dollar package of emergency financing Specifically for country stricken by coronavirus So so again, it's just another Fiscal and this is what's so key to support markets when they were in free fall like last week You cannot you cannot expect just the Fed to prop up the entire global market That's unrealistic and hence the reason why it sold off on that day of the emergency cut But now we're starting to see more evidence come through of real commitment to counteract it and hence The reason why we had a day like yesterday As I said the ECB Bloomberg running the headlines talking about some of I guess yesterday's price movement snapping a bit of a four-day winning streak But markets now very much price for the ECB to deliver on the fact that they're going to cut the deposit rate further once again And here is a crib sheet. I did actually tweak this last night. It's probably quite a useful way of just Consolidating quite a lot of information into a nice easy digestible graphic And it's looking at the major central banks So the key things are one of the dates so you can see still quite a lot to come for March And you've got the ECB on the 12th. You got the Bank of England on the 26th You got the PBOC in China on the 20th the SMB in Switzerland on the 19th as well as Norway and so on So it's still quite a lot to come As far as the ECB are concerned, this is from ING the Dutch Bank They're saying the ECB opted against a coordinated move with the Fed Suggesting policymakers will wait and see until next week's meeting and then try to steer markets with words rather than action However, don't rule out some measures if conditions deteriorate now That's what ING are saying so ING going for a little bit more of a neutral wait and see approach to just see how these numbers develop And that was to come a common thinking which caught a little bit of people by surprise when the Fed took such preemptive action Just given how low the numbers are In actuality in the US at the moment, but markets are very much priced on the side of easing in terms of the Bank of England What ING are saying and they're meeting and towards the end of the month Arguably less sensitive to market moves from the Fed and has signalled it will take a little more time to judge the impact But ultimately ING anticipating a 25 basis point rate cut coupled perhaps with some credit easing is likely at the March meeting Possibly before which is quite quite interesting a statement to make as well But I'll leave you with that graphic. It's on my my Twitter handle here if you want to have a look you can do in more detail With the Fed obviously there is still a Fed meeting Happening this month and it's going to be interesting to see how that plays out That's not for another just under two weeks on the 18th And this is looking at market implied probability in the short end So at the moment markets are priced 73.5% that the Fed are going to cut another 25 and there's a 26 and a half percent that they're going to cut another 50 so so markets are still definitely expecting Much more to come but you know definitely on that last if they went 50 again They repeat what they did earlier this week I mean that pretty much exhausts there and that avenue of interest rates going forward So they'd be banking on the fact that That's enough and over the coming weeks you get the peak and then decline of the virus and subsequent impact And that they by doing now Gets ahead to promote then the real interest rate lowing effect into the economy, which is kind of a laggard effect I guess the problem is is that what if the virus picks up more? Aggressively than what we've seen like in Italy for example That could be a real problem then for the Fed given the limited ammunition. They've got on the interest rate side The final thing I wanted to mention was this you've got the OPEC meeting in Vienna so yesterday basically Saudi and Russia the two main people to monitor as we go through today and tomorrow in this meeting They are far apart according to reports on Bloomberg This was at the kind of prelude to today's meeting the OPEC plus. It's called the JMMC the joint Ministerial monitoring committee this typically is more of a meeting just to see if they're adhering to that their compliance of their quotas so The biggest point here is that there still seems to be a big disagreement and without Russia being on board and Russia being obviously the second largest oil producing country in the world behind the United States of which is a country the US which is producing oil at the moment at Record high levels really putting the pressure on people like Saudi obviously who are really under Pressure to diversify their economy. So these sub 50 oil prices are hurting them at the moment Talk of the town is that basically Saudis want a reduction as big as 1.5 million Whereas Russia basically don't want to cut at all So, you know, this is what we're looking out for at the moment and I do think actually this could be quite a meaningful moment then for crude oil because I Think the risk the risk for me is to the downside And that is they don't get a deal done and Russia doesn't agree and therefore I think oil is quite Subceptible to some downside price action if that happens then I don't think it's unrealistic to see oil come back through Well, definitely this near-term area or a zone of support and a breakthrough down there opens up the prospects of 45 again And you've seen how oil tends to move in these types of situations I wouldn't discount either by the end of the week. You might get down to these levels at 43 34 You saw, you know, not that fly be is a big issue for the global economy But fly be one of the biggest national carriers in the airline space in the UK has basically gone into administration last night and that's a That's a sign of the times really and that's why you heard yesterday's briefing Goldman Sachs looking on the demand side for You know big implications that this virus is going to have on tourism and relatable industries in that sense and fuel Consumptions a big component of oil demand and you know if if Russia don't agree to act And the problem you've had is now that numbers like one and a half million have been thrown out there on the table trade as a hungry for a deep cuts and Not delivering a deep cut is going to be negative for price And so that's why I think on the balance. There's risks to potentially a deep move on the downside of a multi-dollar nature If they were to deliver a cut of 1.5 million That obviously would be bullish and if there's some upside levels here to monitor But I would say the likelihood of a deep cut like that I think is minimal the consensus on Wall Street is from economists that the cut if they do one would be around 750 but this is the problem when these all ministers start opening their mouths Essentially is that now markets I think would be disappointed with a 750 cut now. You've mentioned 1.5. That's bad Tactical management in my opinion from the Saudis if you were to apply a central banking kind of forward guidance communicate Strategy and so yeah keep an eye on all is all I'm saying One thing to be aware of OPEC has taken Unprecedented steps this specific meeting of blocking journalists from entering its headquarters and also have scrapped a final press conference For those of you who've never seen it before It's an absolute media scrum at the OPEC event Why because these all ministers love saying stuff and basically what that means then is that this is the oil Chart I was looking at here and these these deeper moves to keep an eye on at 45 and below But what it means then if journalists are not present perhaps The ability to see leaks and rumours is diminished somewhat But I would probably still remain pretty alert and vigilant for comments because usually It's unlikely you need to wait till Friday afternoon's press conference for definitive confirmation of what's going to happen So so keep an eye out for from ensuing volatility to come over the next 48 hours All right quickly look at the calendar and then we'll wrap things up with Sam What have we got for this morning? Well from a data point of view Nothing really you've got a couple of UK numbers, but quite frankly, they're not really market moving And so we'll move to the US afternoon where things will start to heat up a little bit weekly jobless claims factory orders in the US Jobless claims not interested in and don't anticipate that to move markets factory orders normally I would be but you know like we've seen yesterday. I think a little bit of context perhaps Is quite key One thing that probably was another supportive factor for yesterday's aggressive rally outside of This spending package to counter the virus the IMF pledge the Biden bump is you have that ISM non manufacturing Which was pretty spectacular yesterday in the US as well So factory orders, let's see It is a January reading so it's quite backward-looking and obviously the markets are quite forward focused at the moment So I don't think it's going to be too meaningful with that being said Speakers though, there's quite a few to monitor I guess the key ones will be Bank of England's chief economist Haldane You know what is the current insight the Bank of England? He's talking off topic So I wouldn't be expecting too much, but just given the context probably worth monitoring if you're looking at the pound just in case The chief brexit negotiator Michelle Barnier speaks in the first round of EU trade talks at 3 p.m. I Would definitely not be expecting movement out of the pound on that What you can expect from Michelle Barnier today is he's going to say this and in the UK going to respond and say that and Exactly where we are at the moment. There's going to be absolutely zero movement from their origination of their Statement of their red lines at this point is way too early in the negotiating round first round talks Nothing happens. That's just the usual practice. So, yeah, maybe interesting to hear He'll talk about you know what Europe one and how far apart they are and to put the pressure back on Britain and that doesn't really That's not really meaningful in respect to anything out of the blues So I wouldn't be expecting too much from that Bank of England outgoing governor Mark Carney speaks later on this afternoon They've got Bank of Canada's governor Polo's and then Kaplan later for any fixed income traders He'd have quite a lot of Spanish French supply coming to market as well Throughout the morning. All right, gonna leave it at that Let's hear what sounds gonna say And I'll see you later on. Thanks very much Thanks, and I've just seen a tweet China's CSI 300 index is that closing at its levels not seen in two years at the highest which is Incredible the Dow Jones. Yes, they what a day. I mean the range in this thing is is insane God knows what's gonna happen in the coming in the coming days. It's a really, you know I think mark your levels up Identify where you could see a reaction and have the patients then when we get there just to have a little wait and see I was with the guys and The other office we were talking about the Bank of Canada decision I mean sort of say if they do 50, you know stocks could get a little bit of a bounce a little bit When they continue to push on and on and on I guess the you know If you are bearish, you know the fact that we didn't get above yesterday's high and had a little rejection could be You know in a way A bit of a small win just by the big push I think we're actually coming to levels now, which are quite interesting in US equities You can see here. I've had us mark up 30 74 Probably 30 74 and a quarter that and the pivot You can see we had a bit of resistance initially in early trade there yesterday before Breaking through coming back to test it around six. So you'd expect some sort of reaction here So, you know these lines in the sand if you like these are the points where you know, I just be looking for some sort of reaction before They're making a decision on these markets because we you know the range from Tuesday Afternoon to Tuesday evening low and then Monday then Wednesday's Early Asian session trade loads of the hiatus incredible Good V shape recovery, which of course has been an in topic this year, but yeah, keep an eye on that pivot I think that's a pretty key level That is to break through then you know these moves can can gather pace relatively quickly It would be also keeping an eye on what the dex is doing just to see if we can get a you know Follow-through from European trade and it's a similar kind of level here in the Dax You can see we had some nice price action initially around three o'clock around 430 just hitting This resistance point we then broke through came back to test it and we're just on there now with the pivot So if I'm looking for an opportunity in US equities at any point today Potentially to continue lower these levels would have to go For you know there to be that continuation Let's bring over the down and just say that this level here is just a bit above its pivot So just be you know aware of that those highs that we initially had yesterday before that that push through but yeah strong moves in In US equities here. You've got that again failed test of what would have been Tuesday's high So you can V shape recovery is there, but we're just coming down to a bit of support now and down on the futures Anyway, down 285 which two months ago would have been a big move now. It's Incredible moving on to oil obviously now could start to see things pick up a bit We're just actually pushing and drifting lower down to under 47 and there's gonna be a bit of support around here So it's worth just keeping an eye on around the s1 You've got the lows from yesterday just a bit above there as well And and what has been quite a good guide for the stocks in recent times is what oil has done I know it's you know, got there Absolutely still will be days where they do their own thing But to keep an eye here if oil does continue to push lower and I'd must stress There's a fair bit of support around this s1 and that might also help the case for stocks to go lower But having a look here oil s1 this bit of a trend line that we're coming into play on a couple of smaller Term levels in and around that pivot. We were in a bit of a range before that Level broke through and then of course r1 looks like a pretty key point where you can see that the sellers really did defend that area Around 48 dollars. I was still waiting yesterday Patiently for 49 if it was to come to then make a decision about you know, do I see this market pushing higher and for me until it does I think it's gonna be relatively contained. But yeah, keep an eye on that trend line and that s1 Have a quick look over at gold, which did as I'm saying just drop lower In early trade. We have just rebounded a touch relatively small range to begin that day Again, it's markup your key points of interest where you could expect to see a reaction And these would be those points. I know the S fine little trend line breaks could happen from from then until From now until we get down to these points, of course I'm really just looking at the lows that we had from yesterday quite good support around there almost a double bottom Okay, so 1633 point eight I'm interested if it comes to make some sort of decision below there, you know the s1 You know that was to break that could be the target for example 1645 and a half good strong resistance really from Three o'clock to you know after 6 p.m. And then above there We just couldn't quite confirm a break at all from 1648 up towards 1650 so very important resistant zone and not the goal is just doing a bit of a range at the moment You can see not much really happened yesterday for for gold It was supported at the top a bit at the bottom and resisted at the top quite nicely So keep a key eye on those range levels, which have dictated play so far Moving over to a couple of the currencies Euro Not many people can quite understand why we were so high is this now the opportunity to get short If you want to be late to the party with a bit more confirmation a break of yesterday's lows You know, there's no harm in and sort of wait for that to really go for there to be a continuation to the downside You can see strong support yesterday also Tuesday and was resistant on Monday You got the s1 there as well. So if that is to go fantastic Or if you're already in this trade, I think you've got quite a nice ceiling You know here where at 111 50 along with the pivot the higher the day the high of yesterday afternoon Which is also the morning support from yesterday as well is is a good enough Area where as long as we stay below there, you'd be happy to be short Of course, if you're intraday trading this targeting down towards I would say 111 17 and then the lows down at 111 05 that would be how I'm looking at that above the pivot I think we can start to you know push towards these key levels here 111 74 And I'll just keep an eye on what was the high that we had on the second. So what would that be? Monday Yeah Monday, and also yesterday's high around that R1. So like gold is doing now relatively Relatively speaking pretty range bound up at these tops. I know these moves are obviously a lot bigger than what has previously happened for euro But those would be the key levels that I'll be focusing on down at yesterday's lows 111 05 And then 111 50 in between there You might have a bit of support literally where we're trading now as we found some buyers late last night But at the moment those would be the key areas having a look over at the pound or Is this another one where you should have could have would have got in that low We talked about on Monday, which was the the high of the length of October since then It's it's up nearly 200 pips, which is a great move really extending through here And I know you know a couple people I'm seeing on Twitter I like the look now of a few pound longs against other other pairs and you can see here just extending through Early trade resistance however coming up. So do be patient. Don't go chasing This market just yet. You can see there's quite a lot of lows in the mix here and then highs once we have broken through So all around one twenty nine ten that are one just be a bit patient You know perhaps waiting for either price to break through before getting in or a little pullback down to one twenty nine Key level as well if you are medium term or even intraday long in your book profit You've got a bit of a flaw here one twenty eight fifty strong area of resistance between break through get a clean break And you know that's going to be you're happy to stay long as as long as price remains above that but yeah the pound strong Today across the board Yen you can just see here just fighting back a bit So just keep an eye the decks which is trying to now if you see my middle left chart Just trying to break through that pivot if that was to continue you're gonna get probably the yen Just having another go at trying to break through its high and T notes as well Which is just you know not doing too much in the morning You know and always a bit risky trading in early trade But you can see here a bit of a range that we're in if stocks were to continue lower I'll see that getting a break of that and similar for the the bund above its pivot You can see there's a bit of a area of resistance and we're in therefore a bit of a range from those lows from yesterday as well But early trade at the moment You know not to to say we're gonna have a day like we had yesterday in terms of you know The point moves in the Dow Jones and NASDAQ SNP But I'll be surprised if we continue to smash higher in similar fashion So a little pullback in European trade wouldn't be the most unusual thing Any questions usual guys, please do let us know will be run the throughout the chat Throughout the day. So yeah, I hope you all have a good one and you know markets are interesting at the moment Doesn't mean you need to be in a trade all the time So be patient wait for those levels and wait wait for that confirmation before looking to get in