 Hi guys and good morning. Just gone 7.40 here in London Wednesday the 12th of June. I hope everyone has had a good week so far. You can see from the headline at the bottom US stocks week-long win streak has ended here. We'll just have a quick look over the charts from yesterday before going through some of the the stories overnight. The man on my right who I'm sure we're all very very familiar with now starts his leadership campaign today so we'll go on to talk about what that could potentially mean on the day that Labour also looked to try and pass a bill through that might just swing things a touch. Having a look at those charts bringing up the the S&P here you can see yesterday we did albeit make a new high for the month come back lower and we're just testing actually a pretty key level that the gap open from this weekend you can see we're just trading a tick or so above that now so we're keeping an eye certainly on the futures at 28 78 as a good level of support or your line in the sand if we do get below that then you might start to see things further tick lower 20 minutes or so obviously we've got the the European open and see what DAX does as well as a good indicator yesterday morning for that push higher above that key resistance level to lead a push on only to come back down in the afternoon with the US as well what it helps to be we have yesterday other than US stocks on the move we had some data out of the UK you can see here just on investing.com those numbers if we zoom in here the average earnings better than expected including and excluding bonus 3.4 and 3.1 percent decent beats of expectations the pound had a decent enough move considering usually off these figures surrounding still with Brexit going on the market doesn't give too much away we did push higher above the pivot went to to test our one which we talked about in the briefing yesterday as a good level of resistance I guess the first test of it around 11 hell quite well before finally hitting it later on and I would still have that marked up 127.37 on the futures those numbers for the the growth weekly earnings growth you can see while they did beat the expectations we are on a decline now from late last year beginning of this year for both the including and excluding bonus drifting back down to near 3 percent so not looking all rosy despite the fact that it was a bit better than expected with the pound not just with this data coming out but with the uncertainty perhaps of Brexit not in the way of too much movement that could all change today Boris as I mentioned starting that leadership campaign the first real time he's gonna go public and answer any questions he's kind of been letting everyone else do his work for him if you like as we've seen overnight Rory Stewart talking up Boris Johnson and all the others so just you know so Sajid Javed also talking about Boris which will come on to as well it seems to be that they're they're more talking about him rather than their own campaigns which seems to be the way politics is going now also overnight if we switch back to the headlines we had the API out in the evening 9 30 usual time the headline bit over a bit of an over exaggeration but yeah oil did push lower into the back end of the session and we're now flirting around $52 handle crude came in at another build 4.8 so surprise build there a 5 million or so 6 million nearly change of the expected figure which was supposed to be a drawdown of one on the charts how does that look we can see near that $52 handle in the futures and we put this back to last night and to circle the area of the API you can see a relatively limited initial first reaction we have drifted lower ever since and there was some other comments out overnight as well which have failed to reignite the the crude oil to the upside the idea that OPEC might be extending the production cut just failing to to get oil higher oil drifting low into the back end of the session of course didn't help stocks either but we'll keep an eye on the DAX as that is just testing its low of the day as the S&P testing that gap feel also this morning you can see very much risk off T-notes just bring in into the picture now up towards the high of the day keeping an eye I know it would be a early in the morning would be a bit of a surprise if we were to do it but the idea that we could push higher and then fill the gap here as well on T-notes would be worth keeping an eye on gold helped by a bit of a weaker dollar at parts yesterday but more so due to the fact that stocks have been weakening we pushed higher and that has continued again this morning and same for T-notes just like expertise keeping an eye on these gap fills whether they would be an opportunity to get short or it's long to towards there depending on your bias as well as worth keeping a close eye on as well you've got the the Japanese yen which I'll just bring into picture pushing higher quite nicely this morning R1 along with the high that we had back on Monday worth keeping an eye on and yes you guessed it the idea that there could be a gap feel also worth keeping an eye on also overnight we had some numbers out of China for their inflation was in line the month-from-month slightly worse than expected not the biggest way in a reaction of markets off those numbers but we have drifted lower of course with equities at the moment just snap in a win streak whether the longer term sort of shorter to medium term bias of stocks has changed I'm not too sure I think it's very much expected that Trump and Xi are gonna meet at the G20 but there has been some half negative comments overnight which we will come on to in a touch which might just be part of the reason why we have started to come and drift a bit lower so Boris starting his his campaign today launching his campaign to become UK Prime Minister quick look at the odds for the next Prime Minister via odds checker here you can see pretty much odds on favorite Boris Johnson I think the best price you can get 7 to 10 which or 4 to 4 to 6 so yeah less than evens Jeremy Hunt second Michael go to slip back down to 14s or 12s depending where you're looking but Boris very much the favorite starting his campaign today with a promise to get Britain out of the EU on October the 31st of course easier said than done he is of all the of all the 10 the one who has said by far the least about how he would tackle the biggest problem that is that the nation faces his launch event will be the first time he's faced public questioning in months and talk about how people have just been talking about him will do the work for him his think is his stance on Brexit over the over the months before was you know we will get out no matter what no deal perhaps might be his favorite way and if we go back to the pound just looking from I'll just bring this up showing here from the beginning of May a lot of the down move has arguably been priced in for the uncertainty with obviously Theresa May leaving Boris Johnson looking like the favorite to come in we have had a bit of a recovery helped by the the dovish Fed I do still feel there is a bit of Boris Johnson no deal to be priced in to these markets he you know was staying last night or recently you know according to his office we must leave the EU on the 31st of October we simply will not get a result if we give the slightest hint that we want to go on kicking the can down the road with yet more delay delay means defeat also last night and this is probably to be taken actually I would say definitely to be taken with a pinch of soul there was a poll from the telegraph stating that Boris Johnson of course were 140 seat majority at general election if he becomes Tory leader of course Boris Johnson you know who has a column at the telegraph this poll here may well is more than likely to be swayed in his favor just like if it was the other way around and Osborne was running for something you've got to imagine the evening standard would have him as favorites I wouldn't really read too much in the way of that but here stating that 140 seat majority at general election if he was to run at the next general election up the debate whether that would be true or not I mentioned a lot of other people have been doing the talking for him I mean if you're Boris Johnson you're absolutely loving this everyone that's coming out is talking about you Javid yesterday was it was arguing how Johnson was the wrong choice I believe now more than ever there is a moment for a new kind of leadership and a new kind of leader a leader is not just for Christmas or just for Brexit so he can't risk going with someone who feels like the short-term comfort zone choice we need tomorrow's leader today very very nice speech there from Javid but I think with the way it's looking at the moment Boris Johnson is going to be a nailed-on favorite we'll come on to Labour's influence in this in a moment and how that possibly could change things and that is something to keep an eye out today or later on today I should say also you had Rory Stewart who by who has done by far the most talking and fair play to him with all the videos he was doing despite obviously getting caught with his hand not actually filming himself he's done a lot of talking it is quite fresh to see a change from all of that all of recent times and what politicians have been have been doing he launched his own campaign on Tuesday evening taking aim at Boris as well I see everyone talking about him it's just making him you know more and more popular in my opinion I don't want to make this too personal he said without naming Johnson but do you really feel that this is the person that you want engaging with the detail the future of your health and education system is this the person you want writing the instruction to the nuclear submarines that you want embodying your nation at the world stage and guiding it through the most difficult choice that Britain has faced for 50 years I mentioned yesterday when Boris was was mentioning how he's gonna raise the the 40p tax bracket how many texts I got from people saying yeah I would definitely vote for Boris his popularity is has gone has gone through the roof recently he's the pop star of politics everyone knows who he is people call him by his first name you know everyone was you know it's Theresa May it's Boris it's Bojo he I think will win a general election I think that the poll that telegraph are stating here is obviously biased but I think if it was to go down that route and he was to deliver Brexit I think to be honest he's conservatives only choice that they have of actually having a chance of winning the next election if they were to of course everything that's that's gone on I think is as damaged conservatives and they were so badly but I think they need Boris as mad as that sounds we also have what could be quite interesting today is Labour seeking to block the no-deal so this vote as the labor of you can see here of table across party motion to try and stop a future Prime Minister pushing through no-deal Brexit against the wishes of the MP so this could be quite key if this was to get past and come the 31st of October the idea of a no-deal is say off the table well the new leadership or the person they get in for for the leadership may then start to to get swing if it if it's if this no-deal was off well suddenly if we go back to those odds Boris hun go leads him who of all talks about a no-deal or suddenly they're not going to be able to do anything they're not going to be able to have that that influence by taking this hard stance that they may well do with Europe and say you listen come what October if we haven't got anything yeah we've gone and it might then start to increase the chances of say this you know this outsider at the beginning Rory Stewart who is perhaps a bit more pro-remain than the others and to to start getting more headway in this leadership race of course the end of this was vote will happen before we know who the the next Tory leader is so it's I mean it's only going to pass it's not obviously guaranteed at all the motion will only pass if sufficient conservative members rebel and support it and it I mean if there's a quite an interesting point here the free Tory so the motion has cross-party backing including from one Tory MP let win who's supporting gov in the leadership contest but if we go down here due to the confidence of plie agreement from the DUP the Tories have a majority of parliament of five however that only means then three conservatives have to vote for the Labour motion obviously full-label back it for this to be passed through it did for a moment look last night that Rory Stewart was was going to back it he did out however come out and say that he had read the the wrong up here he did however say he read the wrong motion he was getting a lot of stick at the time and when he did tweet this everyone's like that's that's the way to go about it so whether this gets passed through or not be something to keep an iron that's coming out later this afternoon if that was to be the case I think you probably would get a half decent rally in the pound on the idea again that there's no deal is going to be pushed down so just having a look at the pound where can we get to if this was to get passed well I think we get to the top of this range relatively quickly trading at 127 68 so keeping an eye on that as well overnight and throughout the session yesterday of course trade was still very much in the forefront of people's minds and just having a look at stock to you can see still finding a bit of support on that gap fill worth keeping an eye on that for the took the you know the the early morning trade but we did have some comments from Trump as usual of course not just about trade he was talking about inflation numbers ahead of today's release but he was saying he's personally holding up a trade deal with China and that he won't complete the agreement unless Beijing returns to terms negotiated earlier in the year so that is what if you're looking at this positively the idea is that at the G20 they're going to pick up from where they were back in the year and all is going to be good and they're going to reach this deal and stocks are going to go higher from a trading point of view also going on to say Trump it's me right now that's holding up the deal we had a deal with China and unless they go back to that deal I have no interest so he said he's you know he's starting up this this hawkish rhetoric again he's playing with the markets he really is yes a bit of profit-taking yes this hawkish rhetoric has continued but he's gonna more than likely last minute even if it isn't at the G20 get this sorted ahead of the election in my opinion he's got the Fed where he wants in yesterday he was tweeting about the the dollar and and how the Fed interest rate was way too high we had a bit of dollar weakness off this if we go to the euro chart these comments kept coming out in the back end of this session around sort of well yeah free a clock for a clock and then into fire we did push higher on it on this dollar weakness obviously helping gold as well as mentioned earlier but he's not going to stop and you can sorry I think I didn't have the euro chart up there you can just see that weakness in the dollar against the euro pushing higher in both the euro and of course gold as well late in the session yesterday so he's going to continue this rhetoric I do think he's got this market where he wants again ahead of these releases today the United States is very low inflation a beautiful thing so to sort of saving himself if it is a bad number perhaps on Tuesday in Beijing a foreign ministry official mentioned we have noted that the US publicly stated many times that it looks forward to arranging a meeting between the US and and and China if we have this really information we will release it in due time there's there has been a couple of comments where certainly from within China that they don't want to be bullied into it China state media has ramped up nationalist rhetoric the Communist Party's flagship People's Daily newspaper they ran a commentary last month saying China will never make decisions that give up power and humiliate the country whether this could really develop into a story that means that Xi isn't going to go to the G20 isn't gonna you know fall into to Trump's hands or not I'm not too sure but again is worth keeping an eye on on any developments from this and it could of course way on things short-term in the build-up to the 27th and 20 the 28th and 29th where the G20 is held in in Japan however on the flipside does Xi have to the the economy has taken a pretty big beating the argument to me comes down to the need to prevent greater economic damage the Chinese imports of May tumbled underscoring domestic economic weakness that could hurt global growth for China 25% tariffs could result in a drag of nearly 1% or global growth by 2021 if they were to remain in place so they kind of do have to do a deal I think Trump knows he holds the key here and is just stepping up this this rhetoric whether that means we're going to have a big down day to not I'm not too sure be worth keeping an eye on DAX right now for a guide for early morning sentiment that's just pushing to the low of this increased volume and you line in the sand for the the S&P can pretty much be where we're trading now 2878 the gap field below here then we start looking at a negative week above here we still remain positive and that's the really the way I would look at it also if we just have a quick look at the calendar for things that could influence stocks today we do have the inflation numbers out of the US in the afternoon that would be the the most important thing to to focus on at 1.30 when we do have some speakers and a draggy speaking in just over an hour and then we have some further ECB speak throughout the after the morning and into the afternoon but the main main release today to keep an eye on will be the other inflation numbers the core expected at 2.1 the headline at 1.9 it's have a quick look at the inflation numbers the headline at 1.9 it's have a quick look on trading economics at those you can see here relatively stable around that 2% so if it was to come in anywhere near that markets not going to blink too much and likewise here for the the headline inflation rate around that 2% is not really going to influence things too much what does a good number mean for stocks it's a tricky one probably get a knee jerk reaction to the upside to come back down I think any really good number just will decrease the chance of rate cuts and therefore that would be seen as a net negative for stocks but positive number stronger for the dollar and you know just looking at some of these markets of recent time bringing the Euro into the picture just for the recent trend to the upside it does have a fair bit to perhaps go down to the the bad the the townside the downside the downside if it was a good number as well so yeah I mean that would be the main thing to keep an eye on for sure this afternoon before we have the the DOE so just going back to those API figures you can see expecting or pricing in a build around five million so that's kind of how the market will look at it where oil goes from here will be pretty key we're just finding a bit of support this morning but you can see around 50 53 30 on the futures was where we started before the API so it's got a fair way to go to before recovering for that the last two Wednesdays have seen decent pushes to the downside and we had to have a similar move as we did for last Wednesdays DOE we really back down near the low that we have had as well those speakers just to carry on with there you've got dragging 9 15 and cure into the afternoon speaking twice at 1 15 and also for a clock elsewhere things to keep an eye on going into the best the rest of the session and the back end of the week can see here we've got the the consumer prices for May on Wednesday ECB draggy speaking in Frankfurt 9 15 the race to succeed Theresa May heating up keeping an eye on Boris Johnson keeping an eye on this labor deal how far that goes down and how that could influence the the candidates favoring a no deal also we have China and US releasing industrial production retail sales day data on Friday so ahead of the weekend as well that will be pretty key to keep an eye on just having a quick flick over the charts before we wrap up you can see the backs continuing its also I didn't have the chart down there it's continuing its recovery I was wondering why that looked like it was on the low to see the S&P finally support so that's helping there with this gap fill this would be the key level for stocks for now is your line in the sand below there I'd be favoring a short above here looking at areas to go long yes there is a couple of points to still be considered strong resistance this trend that we broke early this morning a retest of that will course be an area to keep an eye on and that looks like it will come in around 28 25 the pound favoring a bit of patience I would say ahead of any comments from Boris Johnson and this labor deal cross party deal but that does look like with a bit of dollar weakness this morning it's just testing that key level from our one yesterday so that could be a level to look at should we get a breakthrough to test higher up as well so dollar slightly weaker starting off risk off but stocks on a key level of support from that gap feel the NASDAQ doing the same around its S1 hope you all have a good trading day any questions as usual please do let me know if I don't speak to you hope you all have a good session