 Okay, very good morning to everyone. It is Thursday 21st of November From my side really two main things I'm going to talk about and that is the the main topic of course Which is the ongoing negotiations between the US and China on the phase one trade deal and Where are we at the present moment in time? What is the stance of both sides and what's the kind of outlook going forward and the repercussion for market prices across assets? And then also going to have a quick review of the FMC minutes Which came out last night as you can see on the charts this morning. No real Sustained impact on market prices But they're the main two subjects I'm going to talk about then you'll hand you over to Sam to talk about the charts bit more from a technical perspective But looking at market prices at the open. So obviously here. I've got the different products top left euro followed by cable top right gold and then the DAC center left NASDAQ in the middle with the S&P 500 future on the right and WTI crude at the bottom Still holding on to that decent leap in prices We had yesterday following the infantry data and particularly emphasis on the cushing figure I think it was the biggest draw there that we had since August. I think from a statistic Treasury is pretty flat overall Just down one tick for the moment. So overall currency markets very little change There's some pretty chunky vanilla option expires to be aware of for later on this afternoon, which could Mean that price activity in those both major pairs could be fairly contained around those levels And I'll I'll go over those as well in my part of the briefing Equity index futures in Europe off to a slightly negative footing Following the lower close that we had on Wall Street last night The Dow was down about 112 points at the close. I did see a headline I generally check the FT app last thing just before I go to sleep And I was just reading a couple of stories if I if I'm ever off the desk definitely That's you know a way that I keep on top of things and there was a headline that they were breaking on the market section And it was kind of like dramatic sensational US stocks see the biggest sell-off since October and I was like well hang about that's only a couple of weeks ago And all be it were only what a percent or so off the all-time highs and What the S&P was down point eight percent something like that. It's like look, let's just calm down a little bit for the moment, but obviously the main talk of the town is still on the outcome of whether or not we can get a definitive agreement and conclusion to the ongoing trade negotiations, so let's start with that and This is the headline that's being run on Bloomberg this morning and this comes from a dinner with the vice premier of China last night who Also acts as the chief trade negotiator on behalf of China and at this private dinner. He basically said quote He was cautiously Optimistic about reaching a phase one deal with the US even as talks continue to stretch out amid detentions In Hong Kong and some of the other remaining issues To remind you in terms of the timeline if a deal cannot be struck at the moment in terms of this phase one part of the Of the deal then what happens is if nothing happens before December 15th Trump has threatened to impose 15 percent tariffs on about a hundred and sixty billion dollars worth of imports from China now The reason why this is quite interesting is because China remains relatively optimistic If you remember going back from the beginning of the month when equities really started to rock it and we hit those fresh all-time Highs at the beginning of November This was very much a kind of optimistic China looking to make You know some progress it was kind of over to Trump really and I think Trump had slightly miscalculated how quickly China would come to the table Because then it was kind of well All right, do you want to do a deal or not and you remember about a month ago? Trump actually said his own words that we're about to sign a deal and that was the cue for equities to rally to all-time highs But here we are again He's kind of managed the stock market up to these unprecedented levels But he's been reluctant to sign a deal Because he doesn't really want to fire all of his bullets at once and I totally understand that from the strategic point of view It's whether or not we can figure out the timings of do equities consolidate here One thing I would say from reading the press this morning Everyone seems to be quite bearish equities a lot of headlines saying about how overbought we are there was the most Ridiculous technical indicator I was reading on Bloomberg this morning that I've never heard of in my life That apparently is signaling that equities are going to sell off Whether that's true or not, you know remains to be seen But it almost feels to me that if everyone starts becoming overtly bearish Just the glimmer of positive news is going to squeeze all those guys out and then we get all-time highs again. So I don't know. I think it's I'll leave it to Sam to talk about the charts. I definitely feel like if we did see a meaningful correction I still have the belief that I'd want to Have a bias of being long picking a decent level of entry lower lower down from where we are at the moment Perhaps but I don't think also on the same token I wouldn't be completely surprised if we just continue to remain up at these all-time highs if not hit new all-time highs In that respect The reason why the China comments are quite surprising about cautious optimism is because this happened And this is something we were talking about yesterday which could cause a Real deal breaker really for China because on Wednesday What happened was the house voted? 417 to 1 for legislation supporting Hong Kong protesters that has already been unanimously approved by the Senate and it could go to Trump to sign as soon as today According to people familiar with the matter now. What does Trump said on this matter? Well, he's already said that he doesn't think China is stepping up in trade talks now Everything that Trump says For me you've got to put into context of where is it that he's saying it and what is the political context of that moment in time now? What was happening in Capitol Hill in Washington was they were you know They use your kind of witch hunt saying how how bad Trump is he's been involved with all these Underhand dealings and so on and so forth so obviously he was particularly vocal on on Twitter yesterday about those particular subjects and and calling out the Democrat Pelosi and things like that the other thing of course is that where was Trump yesterday? Well, he was at a manufacturing plant in Austin, Texas So again, you got to think what is he gonna say when he's in that type of geographic location in the US? I mean, of course, he's gonna start ramping up the the rhetoric anti China because it just it resonates with the particular audience In that localized area, so I don't know Trump saying these types of things I think it's a little bit of just kind of managing of the situation but the one thing for sure here is that You know Hong Kong is a real sticking point potentially Given the escalation of the violence that we have seen and disruption is having on the local economy there But Trump said he doesn't think China is stepping up in trade talks So quite quite opposite to what the trade negotiator of China has been saying given his optimism now Couple of things here. What is this bill? Well, the bill would require So this is going back to the one that passed yesterday The bill would require annual reviews of Hong Kong's special trade status under US law and sanction Officials deemed responsible for human right abuses and undermining the city's autonomy The House also passed another Senate bill that would ban the export of crowd control items such as tear gas and rubber bullets to the Hong Kong police as well, so Final point on here that I'm gonna talk about is The interesting thing was again as I said, where was Trump talking yesterday? Well, he was talking at a manufacturing plant. What does the manufacturing plant do? Assembles parts for Apple. So what was the other headline that came out? Well, Trump is considering whether Apple should be exempt from China tariffs And he was talking about the fact that, you know, it's unfair because Apple has competitors like Samsung for example so Obviously he wants American firms to be strong and opening new manufacturing facilities that are critical for such an influential and important employer in the US such as Apple So it's interesting. Tim Cook, I think has done an awesome job I'm sure politically Tim Cook has some difficulties being aligned on several issues with the US president But the point being is he's putting his corporation at the front of his priorities and that is well better to be Better to be friends with your enemies rather than go against them And so by aligning himself quite neatly with Trump He's actually done this before he's managed to get his company exempt for many tariffs So Apple would be interested to see whether or not there's any kind of response to that in their stock price later The ultimate conclusion here is that a very familiar graphic of course We've looked at this many times, but it still remains absolutely relevant and it's almost its simplicity which is Which is key and that is is that we have this market rally We hit all-time record highs at the beginning of the month It was looking all but a done deal that potentially not just You know eliminating tariffs, but the rollback of tariffs Would have been you know such a positive development and markets really responded to that however comes reality No progress is being made The administration as per the comment from Trump yesterday doesn't think China's stepping up In trade talks gets tough on China. What then subsequently happens? Well, there's a risk of a potential market sell-off only then for the whole cycle to repeat itself so Definitely quite interesting the other thing though, of course, which Trump also has as potential Other means to kind of manage this is obviously the Fed and the Federal Reserve and what did they say last night about their current view of economic conditions? That was part of their discussions that formed their third interest rate cut that they executed at the end of October So to give you a broad brush summary of what was said Many participants saw downside risks to the economic outlook as elevated Quote further is underscoring the case for a rate cut at this meeting. So that's fine We know that was the week that was the case and that kind of validates the action that they've taken now in particular Risks of the outlook associated with the global economic growth and international trade was still seen as significant according to the minutes They said the risk that a global growth slowdown would further weigh on domestic economy remained prominent Central bankers did use part of their meeting to discuss the ongoing review of other possible Policy tools and apparently that did contain some light discussion about the idea of negative interest rates However, the minutes explicitly said all participants judged that negative interest rates currently do not Appear to be an attractive monetary policy tool in the United States. So they were I think this is the kind of central bank strategy Generally speaking is that I don't want to spook the markets by just saying it's an option This is very traditional in the way they tend to bring about these new unconventional ideas as Options on the table for future use whether that happens or not is to just very loosely say Well, we've had a discussion, but it's not really what we're looking to do at the moment We know that then that gives them the most flexibility that they can then utilize that in the future If it was necessary But also tame the market fears that you're also willing to look at these extra options Which means that potentially you never actually need to deploy them because if the markets know that you're discussing these things That's almost enough to shift the the kind of psyche of the of the herd if you like and in market start to rebound Knowing that central banks will do whatever it takes The FMC wrestled the option of introducing a permanent program if you remember to manage that temporary Liquidity squeeze that we saw in the money markets. However, they reiterated at the moment They'll just keep up their treasury bill purchases into the second quarter of next year They're not looking at anything more permanent at the moment And I think that's absolutely again pretty much the same Strategic planning or idea as per my my explanation of the idea of talking of negative interest rates No need for them to talk about a permanent repo facility when they're already Active in what they're doing for the next three months essentially So overall no real shocks in the minutes. Remember, they're quite dated Of course power spoke to Congress last week and we've seen a whole plethora of Fed speakers since the October Third rate cut. So I think the minutes have happened No shocks no real insight as to if you remember the briefing while saying yesterday What would create then this new level of pessimism that could then hint towards trigger points to To push them towards a cut so for the time being I think the Fed remain on hold With that being said, let's actually let's get it up Let's have a quick look at the Fed watch tool on the CME and see where Fed fund rate futures Are giving implied probabilities for the next rate cut so you can see interest rates actually When ninety six point three percent priced that we will remain on On hold from where we are at the current rate There's actually four percent of the market pricing in a rate cut a rate hike. Sorry in December So how quickly things have changed from where we where we were just a couple of months ago So if we go out to the January meeting still on hold March still on hold April still on hold June starts to look a little bit more potential room for cuts and Then you got to go all the way out to basically July or actually a actual Tipping of the balance for a rate cut the highest probability is not until September of 2020 now So definitely there's been a distinct and meaningful shift by the Fed that this mid-cycle adjustment Has now been executed and we're on hold for the time being Not unless there is something meaningful that develops in the economy So as long as economic data holds up as long as there is not a Explicit market fallout by a complete breakdown of the trade negotiation between the US and China the Fed are on hold for the time being Okay, the final thing that I was going to mention was this I'll take a copy and paste it into the into the chat room for those who need it But this is a bit of a summary of the option expires due today At the New York Cut So if Euro dollar at the moment, I mean the futures is trading around one ten ninety four the spot will be relatively similar but in Euro dollar there is 1.4 billion rolling off at one ten ninety in cable There's one point eight billion rolling off at one twenty nine ninety one thirty today and another billion at fifty five sixty five So the way to interpret these without for those not too familiar and without going into too much depth Is that when you start seeing particularly this? You got Aussie one at one point nine billion at sixty eight fifty What tends to happen when we start seeing a billion one point five billion plus in size is That it tends to act as just a bit of a magnet for price to draw it into that into the close Order cut I should say and so what that means then it's an additional variable to be aware of if you're trading those particular currency pairs in that actually what you might see is is prices either remain if close to the current level of where the strike price is that very quiet trade Unless something unexpected develops from a fundamental perspective to really shift things Okay calendar wise What else have we got? They're probably the main interesting thing for this morning is Public sector net boring from UK is not really going to be a market mover to be quite frank But the one thing that could be quite interesting is the ECB minutes. They're coming out at 12 30 Christine the guard actually speaks tomorrow I was reading earlier in the week and even though she has spoken in her role as president She's never spoken so far about monetary policy Some have been speculating that that's to do with she's been trying to have a lot of internal talks to try Miss or manage the division that's been apparent since the recommencement of QE at the beginning of the month But it's going to be quite interesting to see When she does speak tomorrow What does she have to say is her first kind of meaningful speech will be quite key But the minutes need to be coming out 12 30 You've then got this afternoon 1 30 Philly Fed from the US with the weekly jobless claims existing home sales coming out 3 p.m And then speakers wise as a couple to be aware of Mersh de Gwendoz from the ECB You've also then got Mester who is a voter in 2020 Neil Kashkari from the Fed is also a voter next year So I'd keep an eye out for Mester and Kashkari. What's quite interesting there They're speaking at 1 30 and 10 past 3 London time is they are both the absolute opposite ends of the Policy spectrum Mester is one of the outlying Hawks and Kashkari is probably one of the most dovish members of the FMC So it could be quite interesting and then finally for fixed income traders. If you're looking at the bund Particularly you've got a lot of supply coming out this morning From both the Spanish and the French treasuries. So do be aware of that If there's any short setting going into supply later on this morning All right, that's it for me hand you over to Sam. I wish you guys a good day. Thanks very much Hi guys. Good morning Might as well give a round of applause To the bears for finally getting two days to the downside in the S&P first time since The first and second of October that trend line from the top on the daily still holding Obviously near nose all-time highs now Or is on the all-time high should we say so worth still having that on Let me just adjust that trend line Just to get it a bit more accurate So I'd say if we do get at all any push higher Just to be aware of that trend line starting back on the the 1st of May hitting them the Middle part of July before obviously hitting that at the beginning part of the week looking medium Term dropping it down trend lines are broken yesterday as well here on the hour. So that's relatively Significant there's actually a decent moving average the 200 hour one Don't even average cross Well, you can see here. Yeah, the moving average is Well, I'll take up the moving average cross, but yeah, the 200 hour moving average is worth having on the S&P just in the way It's a previously acted a support or resistance over the last few weeks having a look more Intra day obviously taking into account the The gap the closing sort of low that we had on On last night. We've had a couple of times that trying to get above that obviously a very key point 31.07 and a quarter and then the double bottom at the low as well So there you're you sort of key levels Close to where we're trading and of course just above you have the potential retest of that trend line which acted pretty well On the break and then resist resistance on the on the way back before we would get to touch some of the the top end of Those ranges From yesterday so a couple of key points, I guess as well You're probably worth having on 3100 still even though it did become quite choppy yesterday We have just recently had a bit of support there as well I mean a look over to gold which at the similar time the S&P was coming low We pushed higher we then gapped to the upside. However, we have Reclaimed that relatively quickly during Asian session trade with a fair bit off now You would say from those lows that we had not long ago on the 12th So worth now just starting to get on a couple of these trend lines Just in case we are to have a bit of dollar strength come in or some really positive trade comments and Gold would have to correct itself from that S1 that area 1460 566 important you've got the low from yesterday the low from Tuesday as well that I'll be focusing on and looking at that as well from the recent hires from yesterday and today as well You can see we're just getting squeezed in so again worth having that on before we get that trend line We'll be looking to retest the area of support around 1473 point six on the futures as well We've had a couple of tests at trying to push Lower on 1469 67 you can see a decent price action point from obviously today Yesterday a couple of times on that breakthrough and as well just moving this above here the camera you can see Really really important point around 1469 point eight So today gold obviously looking at those trend lines looking at the area support S1 as a horizontal point looks pretty important As well euro yesterday. We did push higher to come back lower. We're getting squeezed from both directions. We're in a bit of a range And as with the euro all year just worth always having on a bit of a trend from those lows Just to see if we are going to hold it or not this morning We have just made the third test of the trend line from the high of the 18th to yesterday today as well So price getting squeezed in from both ways an obvious Trade would be to be looking for the break higher to test any of those previous highs and previous days Or lower to target yesterday's low and that s1 point which has been pretty key as well the pound Similar in that we're to golden euro that we're off those lows yesterday. We made Free tests of this trend line and and certainly one set to have on now We also at one point broke or we're starting to look like we were gonna have this trend Forming from the top. Have we have broken through although I wouldn't say it's the best trend in the world I'd almost remove that finding resistance at the R1 key level just above 29 53 bit of support from the 18th resistance then on the 19th sub a having a look at that in keeping a watch a couple Horizontal points just above there as well But if we are to see any pound weakness come through for whatever reason dollar strength or the polls perhaps starting to not look Like a conservative majority a break of that trend could be and not a too bad trade to to have on oil yesterday Decent push from the the DOE's I was actually just before I went to football yesterday Because daytime tea one day time team evening TV. It's just so poor at the moment. I ended up putting on Bloomberg news, which is Pretty embarrassing to say but they were really banging the drum about oil pushing lower here And obviously this little flag trend channel, whichever way you want to look at about it that broke on the 19th A couple of days ago. We have come back to retest that late last night following the positive DOE spin And is that now a really good opportunity to have got short Back down to really target you would say around 54 on a medium-term position and be interesting See what people think about that is oil now The a good place to have gone short obviously on the break that we saw on Tuesday Absolutely people would have been wanting a retest of that depending of course how accurately draw That lower part of that trend We we just struggled every single time to get above fifty eight eight eight dollars and Now we broke into the downside. Is this a good opportunity to sell fundamentals? Of course will come into play you've got the the trade war talks You've got the OPEC meeting in a few weeks as well to keep it on just bit below where we're trading I'd be keeping an eye on Around 56 64 some good but bottoms from previous days a good area of support So to have marked up on their quick look over at the Dax relatively quiet As we come into about half hour Of the open not too much going on of course at the beginning of week we talked about That Dax mini range that we had been in we broke on the beginning of the week after actually trying to Push higher almost a little fake out there. We have come back to Retest it a couple of times. I mean it would have been horrible to really have traded that especially if you wanted the long there Or there as well But now we've closed below there on the day how significant is this going to be I would favor Place to look short unless we get in back to that range I think an obvious target if anyone is still sure you'd be looking at as high as from the 28th and the 4th Before we broke through as well. Let me know if there is any questions If not, I hope you'll have a great trading day and I'll catch you in the chat