 Okay, very good morning to you. Hope you're doing well. It is Thursday the 28th of May. My name is Anthony Chung I'm the head of market analysis here at Amplify Trading. If you have any questions for me or Interest in finding out more about what we do, this is the AmplifyTrading.com website. Do check it out whether you're a trader Retail or professional or whether you're a student looking for a career in finance Hopefully this is the place to come so so check that out when you get a moment Looking at the chart side this morning. Let's get straight into things. There's plenty of me for me to talk about from the latest kind of stimulus package unveiled in Europe yesterday to Things to be aware of in the UK politically as well as economically It's got US jobs data coming out later on today. Also want to have a quick look at oil prices as well so Let's get straight to it and as far as the sentiment is concerned for the open this morning I would say things are it's relatively neutral in a sense US equity futures are flat to minor positive But the the Dow up already about 200 points just retesting up and around the Asia-Pacific highs contained by around the R1 so far this morning in the FX markets Both currency pairs up a touch with a little bit of dollar weakness this morning And consequently gold up a little bit around the R1 in the futures at 1732 up to six dollars T notes down, but pretty sideways price action honestly seen In the overnight session down about four and a half ticks So touch a dollar weakness down about two tenths in the Dixie a little higher in the equity index futures The DAX this morning Trading up about 150 just following in step with that general theme oil markets. So odd down We can discuss that in more detail shortly, but a quick look at the S&P here from yesterday's price action I was just having a look at two different things really one Looking at the the market movement from yesterday Obviously, we kind of tracked higher during the European mornings. There's a few different sequences we had here equities yesterday morning getting a little bit of a boost on the back of Europe finally coming together with a coordinated effort for the recovery from the economic impact of COVID-19 and that was seen as relief if anything at that point and kind of global markets did rally at That point in time. However, then as we got into the open on Wall Street We came down quite rapidly for a period of really until Europe left the market and came back down to quite a visible trend line. You can see going back to the 19th of this month a couple of tests and areas of significance and multiple times that that has played and you can see a Lot of people were looking at the time on the break above that level that we saw at the beginning of the week This would have been on Monday and the snap higher that we had as that provided a bit of a Kind of impetus to push higher again. We came back down tested that same level yesterday before then a pretty resurgent finish to really the the US session After we got to that point, you know rallying all the way up really into the close and beyond into the Asia-Pacific session So, you know dusting off any rising of tensions between the US and China Which we're going to talk about and at the moment we still trade up close towards Asia-Pacific highs and importantly then For given that rally that we had late into the close if we're looking at that daily continuation chart You know, we were looking at this yesterday We failed to break or close above that 200 DMA in the prior day session It's on Tuesday, but yesterday managing to get firmly above there And as you can see we were above that key critical level that we were looking at on the longer high time frame Which were those highs that we had back in the summer of 19 Around that kind of October November time now we're above there then you know this chart and these ellipses Unaltered from what we were looking at in the Monday briefing for the week ahead So the next target here would be eyeing is 30 69 and a half and that would be up and around these types of levels That brings in the the price activity from support points of the end of 2019 Would be an obvious target about 20 points above where we are at the moment is certainly achievable Before the end of the week So equity markets there continue to remain of bullish Kind of appetite despite some of the emerging risks coming potentially on the trade side But let's get into a couple of the headlines and things to talk about I'm going to start off with this one Which is you know, what exactly was the The detailed information that happened from Europe and why is it symbolically very important? Well There's 2.4 trillion euros now in total recovery spending that's been unveiled by the EU And it's anchored by 750 billion euros of joint debt issuance Now that's the part that's symbolically very important because you know in summary what this means then is Deeper unity of countries within the eurozone within with with further fiscal integration This has been something of course of which many countries like Germany For instance have been very much pushing back against however given the dire state of the economic conditions at the moment You know it goes some way to say how bad that they are the fact that all of these members are now coming together And if anything, you know as the headlines are kind of suggesting this is a new European Union plan Which would herald unprecedented integration, you know And this has come at a point of the last few years with Brexit North-out-south Division that we've had through austerity in the sovereign crisis all of these different things Which is why markets were very sensitive to a lack of progression Could Europe really come together with something substantial in a coordinated with importantly part of this being joint debt issuance Was questionable so the fact that they have the markets took a bit of a move higher yesterday on the back of it in relief If anything, you know wouldn't count your chickens just yet The way this now goes through is that leaders will begin haggling over the details That's going to happen when they convene on the 19th excuse me of June But under the proposal what was quite interesting yesterday. You had a bit of a disparity between Buns moving lower Italian PTPs moving higher Because under the Commission's proposal, although not quite as ambitious as some of the reports in the Republic that we were covering the briefing yesterday Italy would be the biggest recipient of grants as part of this Package they would get about 82 billion euros Spain 77 Greece 22 and a half France 39 billion So PTPs were taking a good Good lift on that yesterday So that and then overnight we've had James Bullard who's a non-voting member but fairly vocal candidate of the Federal Reserve He said the American economy may have bottomed He does typically tend to be more on the dovish side So quite interesting comment overnight and the Australian Central Bank chief has said that the country's downturn Is not maybe not as severe as first thought so a couple things there overnight which perhaps is just helping Kind of backstop some of that movement as I said with with equities a little bit higher The dollar generally in more risk appetite times or risk on has generally weakened and kind of reversal of that kind of global Flight to quality to reserve currency kind of move that we had seen when the opposite happens So a couple of things in play there But one of the other big risks that is emerging and something I wanted to just go into In a bit more detail to explain the situation because I have had a few people asking about you know Why is Hong Kong so important and what role does it play and what the next steps could be and and so on and so forth so as you would have well seen on the news lots of Renewed kind of violence and protesting happening in Hong Kong Otherwise what have been a fairly quiet period as the country had been adapting like everywhere else to the fact of Lockdown but this had been going on for many many months and this is kind of a Proxy of the bigger trade war is going on between the US and China and I'll explain why so Overnight one of the things that we have been seeing is the Hangsang has become a little bit disconnected to the overall global Movement in broader equities that we've been seeing because of the pressure that we're seeing that this type of activity is going to Have on their local economy. So the Hangsang index is flirting with the lowest levels since The big shakeout in markets happened with that extreme volatility in March when the pandemic was being priced in The offshore you and dipped After the US have come out and basically said that they're no longer to certify Hong Kong's political autonomy and this is the really important part So as a bit of context and a bit of background every year in Washington Basically the politicians of Capitol Hill meet to decide on Hong Kong's special trade status This is called the US Hong Kong policy act of 1992 So Hong Kong in that act is fully autonomous for trade in economic matters Even after China took control of Hong Kong from from British rule in 1997 Why is this so important? Well a large amount of trade and foreign investment goes through Hong Kong is almost a gateway for mainland China And what it means then through these types of acts in the US is that China or Hong Kong gets basically a special preferential tariff rates Which do not apply to mainland China But given what China are trying to achieve by bringing Hong Kong into the fold of one China policy Is that then for from the US's point of view? Well Hong Kong no longer then would have an exceptional circumstance that would warrant these preferential tariff treatment And this is where the problem then lies because this then puts This is to a disadvantage of the Chinese by what people like Pompeo has been saying in the US Yesterday it also starts to jeopardize this question about the the dollar peg You know when it comes to the Chinese yuan Which could cause quite violent movement in that respect? Trump though the question mark here is Is he actually as much as there's been talk about this happening and Pompeo's declaration Could trigger the end to the territory special bilateral trade status This hasn't yet been this hasn't happened as yet. And so Trump's got some decisions He needs to make but the problem that he has here is that of course Trump has kind of Put the trade deal and what he's managed to do by playing tough with China through tariffs So over the last few years is his greatest achievement, you know No longer has they been subject to uncompetitive trade terms. He's managed to forge a deal where China have up front committed to additional two hundred billion dollars worth of purchases of predominantly soft agricultural goods At a perfect time when he's got a US election to win and kind of this mantra of you know making America great again And not being victim to other countries using Unfair Uncompetitive practices and so on so can Trump really jeopardize that phase one trade deal when he's classified the whole Brokering of that as his grade one of his greatest achievements is yet to be seen So again, it's this kind of tip for tat and markets seemingly for the moment comfortable with just brushing it aside But it definitely warrants being vigilant And any further kind of confirmation of that going through could well be a fairly sizeable event for markets to digest because That would be quite a jump up in the escalation between the two countries and what of China said Well, they've said that foreign meddling when it comes to Hong Kong China will take necessary countermeasures in response This is kind of the regular rhetoric I'd say that they say when it comes to China on Wednesday as well Not just about this Hong Kong and its special bilateral trade status on Wednesday The US House voted to authorize sanctions against Chinese officials for human rights abuses Against Muslim minorities. We also had last week About trying to delist certain Chinese firms from US exchanges. So, you know, this definitely Has to be monitored quite closely at this point, but hopefully that gives a bit of context, but this particular one Could be one of the main ones to watch in terms of all these different narratives that are going on from trade war at the moment for the here and now though, I would say at this present point in time Markets, I wouldn't see this as an immediate trigger for markets just to fall over at this point and I would say Still the trend is your friend for now when it comes to the equity sentiment One of the other things that we've had we talked about oil a little bit yesterday But we had the API of oil infantries come out yesterday. And so let me let me start with that We had anticipated US crude inventories were expected to fall for a third week in a row But quite far from it as you can see here from the headline reading in the API is the crude headline build was 8.731 million that's a pretty large divergence from the Median expectation of a drawdown of about two and a half million So a much larger build than expected cushing there was a draw 3.37 million Gasolina bigger build 1.12 interstellar bill is 6.9 million so quick look at the oil chart you can see actually from Where we were which was a retest at this kind of double top that we had from last week and on the 26th We've come down and this move that we've had in basically the last 24 hours is about 10% So it's not it's not a small move by anyone's standards But don't forget we are Up around 70% of the last month's activity or four weeks and so a little bit coming off the top is not Too unsurprising. There certainly are a couple of fundamental catalysts here So we had to bullish data last night So if I just again using ellipse that was when the data was coming out last night This kind of dip here helps us to break through the bounce the low that we had yesterday, which came if I just You can see we initially had bounced during the US session This was when equities were moving lower at that low that we had on the 22nd We came back up and quite a nice retest of that trend line that had been in play For about a day's worth of price activity came all the way back down The API's came out and that saw the eventual low point that we have printed down here now Which on the daily pivots would be around the s1 if we've had a bit of a bounce back Not just the bearish infantry data and of course we'll look out for the de always later But you have had Moscow signaled That it wanted to scale back supply cuts pledged under the OPEC plus agreement from July That of course then kind of brings into jeopardy what had been otherwise a fairly effective coordinated effort in order to Quickly drop the rate of production given what happened with that big run on prices We had about what five or six weeks ago. So that as well is in the mix and then the final thing of course is any implications for Some apprehension about the potential demand impact from the increasing US-China trade war kind of Confrontation as well. So they're plenty to explain some of the price movement And definitely where we go from here will be interesting one thing though Vladimir Putin and Mohammed bin Salman have come out since Those kind of Russia reports were circulating and said that they've reiterated their their cooperation to the deal ahead of the Scheduled next gathering of oil ministers, which is happening on the 9th and 10th of June So a little bit of stabilisation in price for the moment and as I said, we'll look out for the deal weeks later All right. The other thing I wanted to talk about was the pound. We did see the pound move a concerted move lower Installing yesterday And it's a few things. I just quickly want to cover both economically and politically This is one you had the Bank of England governor Bailey came out yesterday and basically said that Britain's economy is at risk of taking longer to recover from the impact of the Coronavirus than in the main scenario published by the Bank of England earlier this month. So again breaking that down He's basically become more bearish if you like on his view about the potential economic performance in the UK Then where they were just a few weeks ago when they unveiled their latest Kind of projections if you like for the economic Horizon over the next two years now. That's one thing. The other thing of course is this ongoing Inability if you like for the government to just shake off this this Dominic Cummings Issue that reared its head obviously Last week when he has found that, you know, the chief kind of architect of a lot of the government's strategy on the lockdown was in fact questionable whether or not he had broken those rules himself and When we're going through a phased Loosening of these lockdown restrictions having seen the government advisor Who has broken apparently these rules then is that going to mean that the general public will lose faith in the government? Ability to handle this and therefore if they did not abiding by the rules then no one will and that of course increases the risk potentially of a secondary wave virus being fairly significant if people don't adhere to the government's advice are the government trustworthy and so on So yesterday We had a few things Boris Johnson spoke to the House of Commons liaison committee of senior MPs And basically he was you know kind of urging everyone to just move on Focus on the pandemic. Let's forget about Cummings but it is still a bit of a sticking point and There's a couple of things. I just want to kind of explore here and one of those is that now around 40 40 Tory MPs have called for Dominic Cummings to be fired or resign one MP resigned himself in protest from the Conservative Party given the situation and Why is this important? Well This does come at a time where as I said the UK like other Countries is going through this very gradual phased Sequence of measures to start loosening the lockdown Reopening the economy and that does come at a potential risk of Or health risk of renewed infections now for Boris Johnson's This comes at quite a difficult time politically because a couple of stats here that were released in the FT this morning And the UK actually has the highest excess death rate among countries producing comparable data Higher than Italy higher than Spain higher than the US So looking at total excess deaths per million people the UK is the highest total excess deaths Generally in thousands it's second just to the US above Italy and total excess deaths relative to Historical average for the same dates the UK is second on that list Now why is the UK so high? Well, one of the things of course was that the How quickly countries generally adopted a stringent lockdown has had implications for The general excess death toll so how much of that has been reduced does Have some connection towards how quickly and how onerous a lot of these measures were adopted And the UK was very slow as was the US and Consequently, then both those two countries do sit quite far up on the right-hand side here In regard to the estimated lockdown day infections and total excess deaths So what I'm trying to say here is that for the government. It's a tricky one if you're Boris Johnson Everyone knows Dominic Cummings is critically important for Boris Johnson's government, you know He is the de facto mastermind behind the scenes That is pulling a lot of the government strings at his loss would be an almighty blow and You and one has to think that Given the fact that he Managed to curate the argument successfully for Brexit to take back control and then to deliver Brexit Get Brexit done which one a resounding majority for Boris Johnson, you know Boris Johnson owes him a lot And so can he fight off these persistent kind of dogged claims to try and get Cummings to resign it's for me There's a couple of different things as well is that well what damage is this have happening on the on the government As you probably would have seen the government's approval rating in the UK as of yesterday or The beginning of the week after the bank holiday was at minus two It dropped 16 points in just one day following that weekend with the whole Cummings debacle The Prime Minister's own approval rating also fell momentarily below zero having dropped 20 points since the end of last week So he has bounced back These data points do come out and that's a bit small to see but these are all basically the main cabinet officials And it's just interesting the least popular is Michael Gove Then you've got Matt Hancock the health secretary then you've got Boris Johnson's pro level pegging I think with the leader of the opposition Kia Stammer. The most favorable is Rushi Sunak and obviously he has come you know, although I feel his time politically will come when the reality of austerity generally will kick in when it becomes apparent that you cannot just Excessively spend of which the way the government have done which don't get me wrong is an absolute necessity when we face a situation I we do but that does come with consequence And so I'm sure he will become increasingly less popular as we go through the next period of years of this Tory existing government Then you've got the actual scientific advisors so Chris Whitty is actually the most popular of everyone At this point in time approval rating of 37% against Boris's momentary negative reading so yeah, the point I'm trying to make here is that I Don't think Cummings is going to go yet. I don't think Cummings is going to go at this point in time at all I think he's just too important however, if then you know MPs are supposed to be elected representatives of their constituents if Constituents are very much of the view that Cummings needs to go and MP then who's not on the front line in the cabinet If they're doing their job should then Call for the resignation of Dominic Cummings and that's what's happened The numbers go from 20 to 33 to 40 if that number starts going higher and higher and higher and higher Approval ratings keep sinking Then one would think that the pressure then comes where Boris has got to make a decision You know, does he just have to get rid of him? I don't think even if Boris got rid of him that That's Severs ties with Cummings. I think that with everything political This is just the topic of the now and people will quickly forget when the next episode of something else happens Cummings will be in the background again And so I think one strategy that could well work whether or not this will happen is that Boris Inevitably then gets to a point where he has to then let him go But ultimately then in time further down the line He then brings him back into the fold in some type of capacity and there's some sort of deal Broke it between the two in order to safeguard his passage back in towards the government's Through some sort of backdoor way Could be a way of doing it get the heat off the government is the point now if we can't get over The Boris situation the point being is if we go through a lockdown if death numbers which are already for the UK Particularly bad in a global comparative terms get worse Is that going to then force the issue that really he's Gotta throw him under the bus a little bit And you know Boris as much as he might owe Cummings has thrown a couple people under the bus over the years So I don't think it'd be too surprising. So yeah a couple of things I just wanted to express Hopefully I won't get too many dislikes on the video. I'm not trying to convey my political view I'm just trying to make sense of what's going on at the moment because I think if Cummings did go in the short term I think that would be a pound positive to a certain degree because I think that given that he was the chief Driving force behind Brexit and we've got some really meaningful milestones coming up for that at the end of June It's timing certainly would be interesting on that not that I think that that would be a long-lasting rally in the pound But I think certainly then if Nick the transition were to happen with the EU Then certainly with him out the way Perhaps that becomes slightly more easy and that takes the pressure cooker off a no deal for another two years to the end of 2022 perhaps All right, finally then just going to have a look at the calendar for today. What have we got? I am so few things German state CPI is coming out this morning They're going to commence from eight o'clock. Then you've got the European Sentiment and confidence numbers the sound important They very rarely are to be honest So I wouldn't really factor them too much into any of your European based asset strategies Going into the US afternoon Durable goods we get the second estimate of Q1 US GDP. We've got initial jobless claims Jobless claims expected to come in at 2.1 million That would be a continuation then if this general decline that we've been seeing from the peak that we had at the end of March With the jobless claims quite an interesting comment that I saw was that now I don't know if you saw yesterday Boeing Obviously one of the US is major Employers announced that it was eliminating more than 12,000 US jobs After disclosing it's it's also planning several thousand remaining layoffs as well In the next few months. So, yeah, certainly this number likely to remain particularly elevated for the time being But as we've seen many times before I think from a from a trading intraday point of view a lot of this already priced in It does fit in step though generally with In a continuation of what's going to be elevated unemployment levels for a long period of time the Federal Reserve released their beige book they're kind of more regionalized Level look and assessment of the US economy and on the employment side of things it continued to say there's a decrease in all districts and continue to fall sharply in retail and leisure and hospitality sectors in particular which we saw Quite clearly evident in that payrolls where I was the weight of the job losses At that point. So, yeah quite a quite a US centric session for a few dates points coming out The German CPI took out for this morning Then we get the DOE's remember the DOE's are at 4 p.m. Not the regular 330 always get bumped a little bit later given the National holiday that was observed in the US on Monday. You've then got Bank of England Saunders Could be an interesting one to watch sits on the dovish end of the spectrum Just given everything that's going on at the moment is speaking on COVID-19's economic impact outlook and risks to monetary policy implications, so that's a quite tasty Topic to be talking on given all things considered But is a dove well-known dove and so if he comes out talking of that nature Perhaps might not have too much of an impact to be honest, but obviously negative interest rates has been the talk of the town We've heard from Haldane. We've heard from Bailey. We've heard from Tenreiro We haven't heard from Saunders as far as I can remember so be interested to see what he has to say Feds Williams a voter speaking on the fed's actions in response to COVID at 4 p.m. London So just towards the the European cash close And then a couple of auctions to be aware of in the UK and the US 38 billion and a seven-year no auction All right, that is it. I'm gonna leave it at that Wish you guys a good session ahead. Don't forget to subscribe to the channel and I'll see you same time tomorrow. Thanks very much