 Hello and welcome to the week ahead video with me David Madden. Today's date is Thursday the 30th of May 2019 and the time is just gone 12 20 British summer time I'm looking ahead to next week, which which is Monday the 3rd of June until Friday the 3rd of June Friday Friday the 7th of June rather Monday the 3rd of June on the Friday the 7th of June 2019 We have had a quite a major move to the downside in equity markets This week trade tensions between the US and China have really flared up In the past couple in the past day 24 hours We've seen tensions move probably probably the highest that they've been in this trade escalation that's been going on for some time now The the threat of additional tariffs from from President Trump in the last few in the last few weeks Has brought upon a response finally finally got a response from Beijing Beijing have turned around and said that they might look to restrict the export of Rare earth metals rare earth minerals to the US and these are Are used in a wide range of industries from electronics to renewable power to the oil and gas industry And and on top of that we've had the device device the Chinese vice foreign secretary Come out and state that the threat of tariffs from the US. It's like a is like a it's like a Threat of economic terrorism. So we had we've had a pretty harsh response from Beijing It's been reported that the US are looking at ways of actually getting around Carrying on business usual without been so be some industries been dependent on these pressure on these are very rare earth minerals I always saw yesterday was you know fresh multi, you know in some cases multi-multi-lows Major European markets. It's also what we're pointing out that the fear that is going on in In the in China is also coinciding with a kind of a new a new potentially new political battle between the EU and Brussels Sorry between Brussels and Italy the Italian government is running a budget deficit as quite a high level of debt And what we're seeing here is that was Here's the comments from Brussels who basically look into kind of criticizing the Italian government I want the Italian government to rain in their spending and also rain in rain in their debt level and given that Mateo Salvini who is the joint deputy Prime Minister of Italy and the head of the Liga party which topped the polls And the recent European elections in Italy. He's showing no signs of backing down. So Italy could be in For a fine from Brussels that's put pressure on the Italian government bottom market which in turn is for pressure on the Italian banking system and that's kind of rippled off across Europe as a whole and speaking of the bottom markets What we've seen here is we've seen a major major all this fear relation to the US and China and also that the possibility of the fear about The financial death situation kicking off in Italy That's actually from the traders to take the cash out of equities and put it into government bonds We see the yield on the US 10-year government bond dropped to a level not seen since September 2000 and 2017 we've also seen we've also seen a continuation German German then your German bond is or as was already negative. It's got even further negative. So there's this clear clear Risk on risk risk off sentiment at the moment I try to do a clearly takes cash all stocks and plumb to make the balance and it's almost like the moment the more time We see yields being driven lower and lower the more nervous that makes some equity traders who remain in the equity market So there's a lot of fear going on out there at the moment Looking head to next week the kind of the number of Big events next week, but the really was the really big ones to keep out for will be how things are going in the US Economies and so on Wednesday. We have the beige book With the United States, which is essentially a kind of rundown Of the state of play of the US economy the most recent minutes from the most recent Fed Fed meeting Suggest that the United States economy the US Federal Reserve are happy with the jobs market They're happy with the growth and they're also but they're not too crazy about the inflation level This is an indicator there's a bit of fear amongst some Fed members that the man is a bit the soft side And I've also in reference to what's going on in global trade on top of that There is a bit Of the kind of a sitting on the fence attitude or it really is kind of wait and see so the Federal Reserve judging by the recent comments are showing no real signs of Actually looking to have to move interest rate one way or the other They're the the incredible push lower in US government bond yields Would actually point to the markets are predict mark markets are predicting the possibility of the Fed actually cutting rates Towards the back end of this year So I gave indication of what the financial markets are thinking We're obviously separate with the Federal Reserve are saying What should give us a good indication of the US jobs market at the back end the next week is the all-important non-farm payroll support Non-farm payrolls there's jobs market is in strong position Recently dropped to its lowest level of 50 years unemployment rate of 3.6 percent We're expecting that to to take up slightly to 3.7 percent, which isn't any which wouldn't be any major harm In terms of the headline non-farm payrolls figure next week. We're expecting 190,000 jobs to be added For the payrolls which it was obviously which anything in around the 200,000 mark per month is deemed to be respectable And also the yearly Average earnings figure is a tip to remain unchanged at 3.2 percent The earnings component that should become one of the larger components of the jobs report Essentially when workers earn more they tend to go out and spend more keeping in mind headline inflation in the US Is really what 2% so we're so workers are getting a nice decent real increase in pay so they're so The terms of you know, the really big issues to keep it up for that's what you keep it up for next week run quickly running through some of the other announcements that are next week because we also do have a Number a number of other important updates on Tuesday Wednesday We have the reserve reserve Bank of Australia interest rate decision retail sales and on the Wednesday We have the Q1 GDP. There is talk of the reserve Bank of Australia counting interest rates to keep an eye out for that on Tuesday We are full your figures from a world on Tuesday. We have first board of numbers from sales force The US company on Tuesday and Thursday From the eurozone we have the eurozone CPI numbers out on Tuesday We have the eurozone of the European Central Bank meeting on Thursday Rates of respect to have to be kept unchanged But the commentary and the language that that the European Central Bank is going to be of particular importance given what's going on In the eurozone. We've seen some evidence that inflation levels place the countries like Spain and France have dropped so so that could be an occasion of drop week in the band any comments in relation to trade headwinds I could actually be Our pressure on the single currency On Wednesday, we have fully numbers from workspace on Wednesday as I mentioned We have the page book on Friday. We have the non-famperos as I mentioned and on Friday We also have the Canadian jobs report So please keep an eye out for that Now what I quickly do is take a look at some of the major markets and see what things could potentially play out over the next few days So starting off with the DAX Because not only the DAX a good parameter for our for our global trade given the heavy Manufacturing that the German economy has it's also in the eurozone and given that we have the eurozone eurozone see inflation and European Central Bank meeting next week So this is a fairly common Move what we've seen here between equity markets trading up the lows of December and the highs of kind of April May It's in a solid fairly solid upward trend So the wider picture is to the upside on the DAX But if you keep in mind and it's been a common theme in the for global equity markets in the last few weeks We have seen a fairly decent move to the downside. So after hitting a multi-month high in May We had a fairly sizable move to the downside Which could be considered as a lower low a lower high and I push it lower again But notice how the lows of yesterday were pretty much in around that in around the lows of mid-May And that level there coincides with in around the lows of mid-april and also the highs of early March So this region here is going to be fairly important and that comes into play in around 11,823 There they're about If we can hold above that metric and we can retake this blue line here at the fifthly moving average Which was acting as decent support the last the last few weeks if you can retake that we can then look at Heading back up towards the mid the mid-May high and then potentially look at retesting The May high but if you've a size of a break below the theory here Then we then we've been down to a multi-month lows and it could take us back down towards this red line here The treaty moving average which comes to play at 11,630 Take a look now what's going on at the S&P 500 It's a fairly similar situation with the S&P whereby The market hit an all-time high in May here, but notice we've had a short move with the downside in mid-May We've had a rebound and then yesterday's move Yesterday she clearly took out at the mid-May low So the big picture is to the upside, but this could be the beginning of it No, we have seen a lower low a lower high and another lower low And if you do manage to kind of press a lower from here on the S&P 500 should we have a size of break below this red line here? Which comes to play at 2775 73 if you have a size of break below that it could take us back down towards this area here The early March low of 7,200 Sorry 7 30 22,000 222 that's only really if you actually retake this this blue line here. They fit the moving average on the on the S&P 500 at 2871 I could I wish you look us down the retesting the mid mid-May high of 2892 And then lastly what I'll do is have a look at the euro versus the dollar Obviously we got the ECB meeting next week and we'll also have the non-farm payrolls Europe euro dollar has been a solid downward trend for the last number of months my series of lower lows and lower highs For the moment, there's very decent support in around the one spot 1110 region We're not too far away at the moment If you do have a break below that area We could be retesting the kind of psychological important one one spot 10 area and he moves to the upside I like to run into resistance in around this blue line here the fifth day moving average Which comes into play in around one spot when he won spot? 1215 and a movie on that could take us up towards this area here The mid April highs of in around one spot 13 22 Well, that's all for me this week. Thank you very much And if you and actually one last thing before we go If you any comments to make on this video or any of the other videos We've made here at CFC markets, please feel free to leave review on Google views. Thank you very much