 Okay, very good morning Monday 9th of December. Hope everyone had a great weekend And I would say without adding too much drama. This is going to be the big final push then into year-end this week Definitely is an important week for many different reasons Probably for a top-level macro perspective, you know forget the UK election I'd actually say the deadline looming this Sunday for the next round of tariffs the US on Chinese goods For 156 billion dollars that arguably is the biggest story in town for the global market But however short-term at least in the domestic space We're going to be focused on the UK general election We've already had a little bit of movement in the British pound this morning after a lot of the polls Which we'll look at in greater detail in a moment have been indicative of a Tory majority still and Just as a reminder if you don't already do so remember to subscribe to the channel hit the bell icon to turn on notifications Because I will be covering the full night of the UK general election live So we'll kick off at around 9 30 p.m. London time and then I'll stay for as long as it takes So at the time, we've got a good half an hour running on that session I'll give you a full preview how to interpret the news. What are the timings? What are the key? battleground areas to keep an eye on and then I'll be there to hopefully Guide you through all the information as it comes out on that night but before we get going Just want to have a quick look across the charts this morning and equity index futures a Relatively flat slight downturn here as I'm as I start the briefing in the European index futures, but nothing too Substantial as you can see in the US We're kind of sitting in the S&P here above the pivot likewise in the Nasdaq and the and the Dow in the FX markets Tiny bit of sterling out performance. It's just backed off a little bit here more recent trade but as I said a couple of more favorable polls that would be Reflective of the fact that conservatives at this point are still expected to secure a majority to what size is yet to be determined Elsewhere gold not too much change up slightly about two bucks training at 1467 Tino it's up about four sitting at the pivot at the moment and an oil of course after we had the confirmation of the cut that came by way of OPEC plus and Also some of the comments over the weekend about Saudi willing to do More than what they necessarily have to do as part of the quota oil prices down about 30 cents this morning, but still elevated In terms of holding on to the gains that were seen at the back end of last week and we trade Around a $59 handle at the moment Okay So I'm not going to focus too much on the charts because there's plenty of news for me to get you up to speed on and Thoughts on what I think about the week ahead So I'm just going to stick exclusively to the fundamentals for this rundown I will issue though the weekly strategy report a bit later on this morning And I'll include technical charts and setups as well But first things first I did mention that you know despite obviously a lot of the UK press if you are based in In Britain is focused on the election. Don't forget. There is the next deadline of tariffs due this Sunday And what I wanted to do is show you this chart which looks at basically the last couple of weeks of price activity in the S&P 500 the Dow and the Nasdaq and What we're looking at here is this green box on the right-hand side. This is last week's price action And as you can see We had such a roller coaster week You remember we started and we had two very big sizable down days. I think cumulatively Last Monday Tuesday, we were down in excess of 650 points if you were looking at at the Dow, for example now a lot of this came because of the renewed tensions between US and China, however, then we started to get some Decent US economic data come out and that very much was solidified by US non-farm payrolls on Friday Now you remember payrolls. This is what it looks like the print that we had at 266,000 was a surprise. You remember ADP came in what in the 60s way below market expectations So people perhaps were a little bit downbeat going into that label report But it absolutely smashed it now above the top end of the analyst most optimistic range 266 above expected 180 notable job gains in health care in professional and technical services Employment also increased in manufacturing as well Predominantly due to the fact that General Motors strike those workers returning to the workforce So 266 was the second best reading in fact that we've had in the entire year of 2019 Now one thing that I had been talking about and so to conclude the kind of matter is what does this mean then for growth in the United States as we go into The beginning of next year when we'll get the Q4 Advanced GDP readings for US growth and remember as at 1.5 percent at the end of last week pre payrolls Well that GDP now model which I referenced a couple of times has now been recalculated up from 1.5 to 2% and 2% of course would keep keep us pretty much stable from the type of growth that we've seen in Q2 and Q3 of This year so despite a lot of people thinking that the US economy would was Consistently showing signs of recent weakness and growth was starting to fade Actually That's that hasn't been the case as far as now the the latest model predictions would suggest so you can see here This last little uptick that we've had Just going into last week puts us the highest that we've been since the last two months for sure on these readings now If China US is important, what's the current status on that matter? Well China did speak overnight They said that they hope to make a trade deal with the US as soon as possible and meet intense Discussions before those tariffs are due to kick in at the end of the week So with this being said and and knowing ahead of time that deadline and the sensitivity in global markets cross asset To this type of news I would say as per the normal state of negotiations Typically, then I would imagine the political pressure will remain quite tense all the way up until we get to really the end of the week So certainly Friday could be quite interesting if there's been no headway up until that point before then Do we get the inevitable? delaying of the tariffs they kick the can down the road kind of situation and Then they we Revisit this in the beginning of next year. I mean that would be I would say the most net positive for market sentiment If that were to be the case or if we get any hints towards that type of action, however, the one caveat would be Remember the US economy as I've just described it is now Kind of flips into a bit more of a bullish short-term state as far as how markets are perceiving future growth in Q4 in the US Particularly after non farms and so although I'm not obviously looking at just one data point in isolation 2% growth in Q4 is still pretty decent all things considered that with US equities upper all-time record highs You know does has Trump allowed himself some room to deliver on his hawkish rhetoric? And so therefore does he just push the button and say we're doing it tariffs are going in and If that is the case then obviously given as I said where equities are positioned in particular You would think that we've got to see a little bit of a pullback from those types of elevated levels So a little bit of a trade-off here I'm a little bit indecisive myself about where I sit in between that of a delay and a can kicking down the road exercise or Trump has the luxury now of a little bit of freedom Allowed by the strength of the stock market in terms of where it's at and also the underlying economy Having performed okay recently does that give him the confidence to kind of follow through so yeah It's gonna be interesting You're gonna have to be vigilant throughout the entire week because obviously there's not really a set schedule for this type of thing So obviously I'll continue to share all of Trump's calendars and everything as soon as I have them Meanwhile though domestically why is China sounding so kind of upbeat and positive and kind of open to the idea of dialogue? Well Their economy is hurting at the moment and we've had this over the weekend the latest Chinese trade data exports dropped 1.1 percent in November their export data within the track within the trade balance Report was quite substantially weaker than expected So yeah as the headline would suggest does go some way to show why they want to secure a trade deal Imports from the US game for the first time since August to 2018 So they're certainly looking to do as much as they can To get the US on side in order to avert the deadline on Sunday Okay changing Direction let's have a look then at the UK election I'm gonna go through later on in the week as they said I'm gonna cover the whole event live So when I do that before the exit poll comes out, which is absolutely one of the most important moments of the night If you're trading it that will be at 10 p.m. So half an hour before that I will give like a full rundown of The chronological key constituents to watch should we or should the exit poll be inconclusive That's the type of situation then when every single Release by release is going to be quite critical from a top-level overview Usually those results start coming in the first ones the most early around midnight and then from midnight till about 3 a.m By the time you get to 3 a.m. You're in usually a pretty good position as to know what the end outcome will be Given historical precedence. So really it's about identifying those key Battleground potential swing areas that have been targeted by say conservatives in a labor Traditional stronghold but of areas of which were heavily voted to leave for example would be key ones to monitor So a couple other things then let's have a look at some of the opinion polls because I said the pounds being a little bit Little bit firmer this morning. We've just managed to get above some of the highs that were seen towards the end of last week And this is it Johnson has returned To key Brexit message as polls put him ahead So it has yielded some positives this whole notion of this election being particularly unusual Polarized of course by the issue of Brexit, you know, you're either leave or remain kind of mentality and the phrase of get Brexit done Continues and that will be obviously the message that he will be saying throughout this entire week now what we've had here is This is a look at the average poll of polls and graphically. I know it's a bit difficult to see but if you look right to the far Right-hand side, you can see the conservatives have just blipped a little higher and labours just dipped ever so slightly so although from a very Far view, let's say it looks like they're they're both moving in a exact Correlation of same Distance, but in essence if you were to zoom in actually the conservatives through What has been a whole selection of polls that have come out over the last couple of days have Reestablished a fairly decent lead of a low double-digit nature Some of the biggest ones the latest ovation poll the top one here as you can see Puts them back to 14 points. That's 14 points up from last week's nine and BMG which was the one that caused a lot of headlines last week because that had Labour narrowing the gap to six That's now going back up to nine and then all the rest are kind of in between at the moment You've got the latest one at 10 points and so on so with that being said there is I'm told the you gov's Lasts and latest MRP poll you remember that was the big one the lot of people were looking at about two weeks ago Which did actually pause a gap in prices Because of the the fact that it reflected a conservative majority of about I think at the calculation would have been about 68 seats in Parliament now the reason why people look at that of course as we know is the methodology was particularly accurate in correctly forecasting the previous election, but as I understand there's a secondary and final you gov MRP poll tomorrow and that one I think will be Quite quite telling fairly definitive because now these politicians really have run out of time And left something quite spectacular was to happen or there was some kind of absolute bombshell dropped from an opposition Party let's say on the lights of Bryce Johnson of which you would have thought they would have shown their hand by now Then all things remaining equal It looks like the Conservatives will go into this ahead in the polls by around a 10% kind of average Now few other things to be aware of Where is the Prime Minister today? Well, I think absolutely no surprise The Prime Minister today is visiting Sunderland in the northeast of England So obviously an area that voted to leave in the e-referendum in 2016 and any trader who traded that night will remember Sunderland very clearly The reason why Sunderland is so key and the reason I guess tactically that Trump and Trump The Boris is there is because Sunderland has a historical precedence that they have this Local pride about being one of the first constituents always to get their results out live And so normally they're one of the most I mean in the night of the referendum There are fairly large populace area comparative to other constituents within that kind of location in Britain When this time round obviously its first pass to post but Sunderland will be It's kind of like a symbolic area, I guess And so he's going to be there today banging the drum that we can't allow any more delay and and so on and so forth to get Brexit done The other thing as well is I'm not sure if you caught it But the head of Ipsos Maury who's one of the main pollsters was speaking on Bloomberg TV when I came in this morning And there's a couple of interesting points that I thought he said and one was that in 2017 You'll remember Theresa May had when she called the snap election a Overwhelming clear margin in the polls of an average of around 22 and a half percentage points But by the time we actually got round to the day of voting that lead had been narrowed Kind of spectacularly combination really of conservative Complacency The dementia tax as well that that went down very badly Corbyn did an excellent job at galvanizing the youth vote to really get involved so Couple of things there though that I think are quite different to what's happened this time and what that chap was saying was that Actually last time Labour made such good headway in that period But this time that hasn't really happened Corbyn's favorability as an individual is still deeply negative, but it has improved marginally But overall the gap really hasn't changed a great deal in comparison to 2017 One of the biggest things was as I said Theresa May's policies some degree of complacency as well Really hurt her chances this time I think a lot of people were nervous about Boris Johnson in the build-up to the election particularly given the The format of live televised debates, but even though he's not really smashed those He also hasn't made any Disasters there's been no real calamities and so therefore he's kind of managed to come through it largely unscathed and Keeping that one simple message about getting Brexit done. So, you know, if you're looking at the polls Yes, you've got to take him with a bit of a pinch of salt, but they do still show a Tory majority How big of that majority? is unsure and is there still a case or For a hung parliament absolutely there is but the chance of it happening seem fairly remote Now don't get me wrong if that were to materialize well, that's going to be a big move in the markets You're going to get a big reaction when the exit poll comes out And then it's going to be you know game on for every major constituency that comes out to see whether or not that is ratified by the end of the night, but I think so far The prospects of of a repeat of 2017 happening. I must say I think are a little less than What was the case that time round just given the evidence of what we've seen so far? I would say is my my general view Other things then to talk about away from the election We do have two major central bank interest rate announcements both of which come accompanied by their latest Financial economic forecasting so we get the the summary of economic projections from the Fed and the Euro system staff projections coming out from the ECB So starting off with the Federal Reserve or really both for that matter The Fed have cut interest rates of course three times now in 2019 They've pretty much quite clearly hinted towards holding for now federal funds futures not anticipating any type of rate change for at least the next 10 months and so I would say This is very similar as well for the ECB the central banks now largely an autopilot for the time being So I'm not expecting too much from this We will of course be here to cover the Fed in full on Wednesday night the summary of economic projections could be quite interesting any updates to that You know the SCP has generally on the right side been relatively Bad at predicting the future path of interest rates and so of course it continues to remain Under the spotlight of how valid of an indicator or how necessary it is in terms of providing transparency if it doesn't really provide a whole great deal of Accuracy same thing being said actually with Christine Lagarde according to the FT this morning I mean obviously it's quite an important one for her It's her first kind of run out as official press conference that she'll have to deliver But I think Christine's perfectly equipped from experience and skill point of view to be able to handle that type of pressurized situation But one thing that she has done is she's preparing for sweeping review of the ECB strategy So this would be the only time the second time in basically the 20-year history of the inception of the euro That ECB policy is going to be fully reviewed and you know credit to the Lagarde to come in to kind of pull the trigger on that Certainly establishing her position at the helm now The areas are just basically taking stock of what has happened thus far the advent of things like quantitative easing Targeted long-term refinancing operations negative interest rates and so on Also going to look at things like the medium-term inflation objective being kept between zero and two percent Whether that is still valid in today's new kind of policy norm when we have things like unconventional policy tools And then also future challenges ahead crypto currencies inequality Climate change so perhaps slightly less sensitive to financial markets, but all things that Obviously do need to be looked at to safeguard the future So yeah, I just thought overall with the the ECB in the Fed I wouldn't be expecting too much Definitely warrants though monitoring both of these events very closely But I'd say they are significantly outweighed on the the agenda by the tariff situation Looming at the weekend US and China and then also secondary the UK election that's coming up Here's a look at the calendar Just in case you need it I mean we've already really talked about all the major events that are happening the only final thing that I will mention Is you have US CPI coming out Wednesday afternoon as you can see in the center of this That's the other real economic indicator that I'll be watching with with some interest Otherwise if you do need to look at this calendar in more detail Or have it on your desk at the reference point then I did tweet it on Sunday so you can catch it there Otherwise, that's it. I'm not going to talk any further As I said, I will go through the charts mark them up from a technical perspective and send it out in the the weekly strategy report so All things being well, I'll see in the chat room and hopefully you can join us on Wednesday night for the Fed as well as The full UK election coverage that we'll be doing throughout the night on Thursday. Okay. Have a good week guys