 All right, good afternoon, ladies and gentlemen, and welcome to the first non-farm payrolls webinar of 2015, and we're fresh off the back of a very, very good November number. We're also fresh off the back of an awful lot of speculation as to what the ECB might well start to do next, but it's January the 22nd rate meeting. Yes, January the 22nd, they're going on to a slightly different meeting schedule this year. Also, slightly different voting patterns as well, which hopefully if we've got time, I'll try and explain to you, but in the meantime, let's look at what expectations we'll do to be statuatory risk warning, which we have to do in every single case with respect to these webinars for compliance purposes. And then we can get on and start looking at the key levels that both myself and Colin will be looking at with respect to the particular presentation. So, first and foremost, let's look at what markets are expecting. So what I'm going to do is I'm going to bring my Bloomberg over onto the screen so that everyone can see it, and then we can look at the numbers that we're going to be paying particular attention to over the course of the next few minutes. Now, we'll start with the headline number, and the headline number is this number here. I can still hear your keyboard, Colin. We're expecting a number of 321,000 in November. Now, I think a lot of that could well be as a result of temporary hiring, as a result of Thanksgiving and Black Friday. We had a similar sort of scenario play out in last year's non-farm payrolls numbers. You can see that in this spreadsheet that I've got here. If we go back to November last year, we went from 164 to 274 in the space of a couple of months, and then we dropped back quite sharply in December last year, and we dropped sharply for a number of reasons. And that doesn't necessarily mean that we're going to drop off sharply this year, because you may recall that last year, most of North America was under about 10 feet of snow. So a lot of that number in December could well be as a result of the fact that people couldn't get out and about, and therefore firms weren't hiring simply because people were snowed in. So there's certainly an element of that, but I think if you actually do look back over the course of the last couple of years, there usually is a little bit of a tail-off in December, simply because all the temporary hiring has been done in November, and then in December it's pretty much back to the general average thereafter. So I'm looking for a number in the region of around about 230,000. I'm expecting, we're expecting 200, or the consensus is 240,000, and the unemployment rate to slip back to around about 5.7%. And this is a number down here, 5.8% is what we got last month, 5.7% is what we're expecting right now. I was looking at the Canadian numbers there, silly me, because they're 5.7%, oh my god. So basically, let's explain what we're looking for. If we get a weak number, that's likely to be dollar negative. If we get a very strong number, and a strong number is anything near 275, 280, that's likely to be fairly dollar positive. Anything below the consensus of 240 is likely to see a little bit of a weakening in the dollar. And why do I say that? Well, simply because the dollar is so massively overbought right now, that you've really got to think that at some point in time we're going to get a little bit of a pullback, particularly in light of that news that came out this morning about the ECB studying a new bond purchase model of up to 500 billion euros. Now, with respect to that, I don't think that's anywhere near enough. And I don't think the market thinks that it's anywhere near enough. Since December, we've come down from 126 to around 118. So at some point, I think we are really due a bit of a pullback. So as long as we stay above this week's lows, then I think the likelihood is in euro dollar we could squeeze back higher. So just keep an eye on the lows for this week for euro dollar, particularly the pointing number. Yeah, I'm here Colin. I was going to add on the euro that it's looking pretty oversold and washed out against a number of currencies, not just the dollar, but also against the yen where it had a big collapse. So yeah, if the ECB comes in lower than expectations, I do think you've got the potential for a trading balance here. Yeah, I think so too. It doesn't change the overall direction of euro dollar, which I still think is for a move towards 112 by the end of the year. But I think in the interim, we could actually see a move back towards 120. In fact, we could go all the way back to 122, simply because that was the key breakout level on the move. Lower, it was where the 200 month moving average was. And that's the first time the euro dollar is traded below the 200 month moving average since 2003. So it's a very, very significantly important support level. Before we go on to the rest, everything that I've said with respect to dollar weakness or dollar strength applies equally to the cable and it applies equally to the dollar yen as well. But let's look at the key levels on the main benchmark indexes and we can see straight away here looking at the Dow. We can see the significant support line coming in round about the 17,217,300 level. But we can also see that there does appear to be some evidence that maybe we're starting to find a little bit of a top. And that can happen. Can they add something here, Michael? You can. If you get a, it looks to me and I agree with you, it looks to me, if you get a failure at 18,000, that could be a right shoulder or the head and shoulders top. So be careful. It does look like we're starting to level off here. Yeah, I think what we need to do with regards to that is basically look at the left hand peak on that. And as you said, that's around about the 18,000 level. So we could potentially get a move up to the 18,000 level. But I would be enormously surprised if we moved beyond that. And I think it's surprisingly similar how all the other stock market or the shape in terms of the chart, how similar all the other ones are. Because again, we had this very, very strong up move in the past couple of days. But all in all, we're pretty much where we started the week. You know, this is Monday, Tuesday, Wednesday, Thursday, sorry, Monday, Tuesday, Wednesday, Thursday. So basically it's been a week of two halves. And essentially Friday, I think we were talking about this earlier, Friday is the penalty shootout. We've had the two bearish days, we've had the two bullish days and today we'll really decide whether or not we do retest that left shoulder or whether we actually come back down and start to test a little bit of a neckline which currently comes in on the S&P around about 2015. So again- And if there is a hidden shoulder stop, that's a rising neckline which is also what, significantly bearish? Yeah, and then we look at the NASDAQ and we look at the NASDAQ and again, it's a similar sort of story. We've got price compression between the peaks and the troughs. So again, we could get a move back. Obviously this isn't quite a hidden shoulder here but what we do have is a triangular consolidation and what we're looking for here is a compression to continue within these two converging trend lines and potentially a break up or down depending on the direction of the break. And we were talking about risk appetite and how confident investors are with respect to where we're gonna go next. I think it's actually quite significant that again, the small caps are underperforming and actually the small caps have actually tested this potential resistance on the left shoulder around about 1195-1200. So again, it's telling you a very, very similar story with respect to where we potentially go to next. And at the moment, I'm not gonna predict the direction one way or the other. I trade the resistance levels and I trade the support levels. So in essence, you're short below the resistance and you're long above the support and then you trade either side of that once you get a breakout. Anything, if you trade contrary to that, you're taking on an awful lot more risk in terms of what you could win or lose. Interesting on this one too, Michael, the stochastics have rolled back under 50. So it looks like you do have weakening upward momentum even though you more or less kind of confirm the high-ish but this rolling back under 50 where you're forming a potential rate shoulder is looking like you're in a topping pattern. It does seem that way. And I just noticed that the pound against the dollar has gone rather well bid on the back of that and we can see that. So one of the warning signs, I think when you look at daily candles at the end of a down move, is you look at very long shadows off the lows. And here, again, we've got a long shadow there and we've got a long shadow there, which suggests to me that the market's getting a little bit nervous about being overly short as we head into the close. So what it does is you get profit-taking, it pulls you off the close as markets get a little bit sensitive and a little bit nervous about being overly short. Now we've got a strong upward candle here. What I would be looking to see really for a little bit of a short squeeze is for a break through this 151.80 area here. Again, the stochastic is extremely oversold. Let's change it to a four-hour chart and it gives you a slightly better indication. Momentum is really starting to turn positive here, but again, you need to keep an eye on this 151.80 level. So we may get an initial push higher. We may run into a few sellers around 151.80, 152. We may drift back and then we may go higher, but at the moment the support comes in around about 150.35. Again, the downside pressure remains prevalent and again, that will really depend on obviously the strength or otherwise of the numbers this afternoon. One other item that I think is significantly important is average hourly earnings, which is this number down here. And I think this is one particular number that actually could drive a little bit of dollar weakness. If average hourly earnings comes in in line or comes in slightly less than expected, that's going to put back the potential for rate rises over the course of the next few months because one of the things that the Fed will be nervous about is wage growth relative to inflation. And while inflation is weak, what they don't want to have happen is wage growth starts to strip away from inflation because that will give them concerns, given that inflation is a lagging indicator, but they might need to get in front of it and raise rates sooner rather than later. So we'll be keeping that number there. I'm looking at the unemployment rate, but it's essentially the headline number and any revision as well to the November numbers. So let's just pull that back out of the way. While you've got this open, Michael, could I do candid jobs for a sec? Sure, go on. Off you go. Okay, so yes, agreed. And certainly, Michael, on the point of the inflation number, along with the headline numbers, we're going to start to get skewed by the collapse in the oil prices. So the Fed may actually start to concentrate more on things like core CPI and on things like average hourly earnings because of the distortions we're going to start to get in headline inflation. The candid jobs are also coming out at age 30, where the street's looking for a net increase of 15,000 jobs after a 10,000 decrease last month. Last month was a 5K increase in full-time, and it was offset by a 15,000 decrease in part-time. Something you've got to watch for with Canada if you don't get this month, you might see over the next couple of months, is that the collapse of the oil prices is more likely to hit jobs first in the oil and gas sector. So that's probably likely to hit first the benefits of the lower Canadian dollar on manufacturing and other export sectors. It may take longer to play out, so in the short term, even if you don't see it this month, you are looking at potential weakness for Canada jobs over the next two, three months before the wider impacts work their way through the system. And that equally applies to U.S. jobs. Keep an arm of weekly jobless claims over the course of the next month or so because they could start to increase because there has been some reports that some shale operations in North Dakota and Texas are starting to shed staff, and that could well feed into the weekly jobless claims over the course of the next few weeks and months. So if we start to hedge back above 300,000, that could well see the employment reports start to soften a little bit as well going forward. But that could take a few days, so it'll take a few months to sort of work its way out. Okay, so before we get cracking, let's just finish on Dolly N, because I think that Dolly N is starting to run into a little bit of a wall around about 120. So it certainly seems to be that way on the four-hourly chart, and we're certainly seeing some evidence that people are a little bit nervous about being long Dolly N, and my bias is that we could well see a further move back towards the lows that we saw earlier this week around about 118. Certainly if you look at the highs, it is running into a little bit of a resistance at 120 and at 12080, and with that, I will now be quiet because we are around about 20 seconds away from the jobs report. And what I'll do is I'll pull my Bloomberg over to one side here, put the payrolls number across one side here so you can actually see the average hourly earnings number down here change as well. So just a quick reminder, it's the headline and the average hourly earnings. Let's go. Here we go. $252,000. $1.7,000, low hourly earnings, and higher than $70,000. Okay, so the end of revision is higher as well. So that's dollar positive. That's dollar positive. So we should see a move higher in the dollar, which means that we'll see a retest of the lows in your dollar cable and dollar yen, and the jobless rate as well has fallen back to 5.6. So we're looking at 5.6. It is 353 November and 252 non-farm. So let's just move this out the way. Let's just look at the average, or an average hourly earnings. Look, 1.7, that's weak. So actually, we've got some conflating here, a little bit. That's a weak number. That is a weak number. And it's the average hourly earnings that are moving this, because the dollar's initially gone a little bit soft on the back of that. So the market's trying to make sense of it. The numbers are good, very good, but the average hourly earnings is very, very weak. So this is all about the Fed then. This is all about the Fed. And what essentially it means is that the likelihood of a rate hike has diminished quite significantly. People were thinking about a rate hike after April, or April at the earliest. You've got to think that's off the table now. I don't know what your take on that is, Colin, but you've got to think that any potential type of a rate hike is off the table. You'd have to think with that softness in the hourly earnings, at least for the April meeting. They may still stay on track for June, but I know they were top of it. And even the increase at 250, it's good, but it's not hugely big for them to have to accelerate up from June. So at this point, I think Elisa Fed on track for June at the earliest, I think this kind of takes away some of the speculation for April. And can I talk for a second? The Canadian jobs for this one's crazy. Off you go. Okay, 4,000 decline in Canadian jobs is reasonably close to what I was expecting below the street in line with a 10K decrease last month. But something really funny is going on here. We've got a 53,000 increase in full time and a 57,000 decrease in part time, which makes me put, it makes me call these numbers into question. They had to do a revision earlier in 2014, and they may have to do another one again because that full and part time split was very strange. Okay, are you done? I'm done. Okay, sorry, I didn't want to start talking again just in case you had something else to say. Okay, we've been asked about gold and we've been asked about oil. Right, let's start with gold. I'm still fairly bullish on gold, if truth be told. At the moment on my one day chart here, my daily chart, we're trading in a triangular pattern. We're finding it's support at progressively high levels. Yes, we are trading slightly lower and have been trading slightly lower over the course of the last few days and weeks. Overall, given all the concerns that we have about what's going on in Europe, irrespective of what the Fed does, I still maintain that the likelihood of a rate hike this year, I still think it's probably fairly slim. Why do I think that? I think that inflation may stay low for quite some time and that while that remains the case our earnings remain weak. And let's face it, that's quite a big drop. The likelihood of the Fed raising rates, irrespective of what the market thinks about that, it's likely to remain on the back burner and that should be fairly supportive of gold, particularly if the euro continues to remain under pressure. And I think that more than anything will help underpin gold because people will look to go into gold at the expense of euro. So that should be mildly supportive given all the concerns that you have about what's going on in Europe. I was just actually looking into the detail of those jobs numbers and actually Colin, manufacturing jobs were down 18,000 in December. So there are weak components to that jobs number. On the face of it, it looks a fairly positive number, but when you actually drill down into it, there are some weak segments in there. And the average hourly earnings number means that the Fed is not going to hike rates. I would suggest until the second half of this year. So it's positive, but there are also negatives that you can take away from that. And given current positioning, you've got to ask yourself whether or not that will be enough to push stock markets higher. Now I've just been asked whether or not this is any chance of the FTSE 100 breaking to all-time highs for the foreseeable future. What would it take? Well, given how heavily dependent the FTSE 100 is in terms of commodities, you need to see a significant rebound in commodity prices. So you need to see a significant rebound in copper. You need to see a significant rebound in oil. And you need to see a significant rebound in gas as well as a significant improvement in Chinese and European economic data. You can talk about economic growth as much as you like. But we're now starting to get to the stage where we're pushing on a string when it comes to the effects of quantitative easing. If we look at this FTSE chart here, this UK 100 chart here, if you look at it, we've got solid support. We're around about 6,200. And we've got fairly good resistance between 6,800 and 6,900. I think that is pretty much going to be our range for the next six to eight months unless something significant happens to cause that to change. So hopefully that makes sense. That's certainly what I'm looking at over the course of the next few days and weeks. And let's, Colin, you have a different view on that. I know. I do think we're going to see a number of markets. Some of these markets go into more fairly wide-ranging, wider trading ranges, because we do need to... I'm sorry. Getting into more wider trade during what we're building. And actually, I agree with you on gold as well. Even if the ECB doesn't come in as much as people were thinking, I think the increase in the ECB's balance sheet will help to support the gold price and move it up over time here. Yeah, absolutely. And also, it's also a handy to look at the gold oil ratio. And at the moment, the gold oil ratio is really, really stretched. And it's at 10-year highs, which suggests that while there may not be a significant rebound in oil, we could see a bit of a rebound in gold. And I'm looking at this chart here. This 2009 lows, this $50 a barrel mark is very, very key in terms of the overall direction of Brent crude. Now, we did have a little bit of a brief flirtation below that earlier this week. We traded around about $49.60. But I would argue that unless we get a significant rebound back through this $55 a barrel mark, then we're probably going to see $40 over the course of the next two to three months. Unless something significant changes with respect to OPEC, Saudi Arabia is absolutely determined to put the squeeze on the U.S. shale producers. Okay, so we've already had the first bankruptcy this week, WH Energy in Texas, was unable to basically fulfill its obligations and basically filed for bankrupt, bankruptcy rather. So for me, this is just the start. Saudi Arabia wants to maintain its market share and as such, it's not going to give up on the shale producers. It's going to keep the thumb screws on and I think that's going to continue to place downward pressure on oil prices. There's still too much supply relative to the demand. If you look at the demand in Europe, if you look at the demand in China, it's going to be on the decline. We've had a mild winter, so unless we get a significant cold snap, the only thing that's really going to take that oil price higher is a significant weakening in Saudi Arabia's resolve. So that's the Brent Cash contract. So let's look at CLG5, which I think is February 2005. Similar sort of story here. You've got your support around here. Let's bring in the 4-hour chart so that we can actually see where the lows are around about... I think the next time we do one of these, Colin, we'll need to check your audio beforehand because it's not very good. So at the moment, we seem to be in a little bit of a range on the CLG5. Resistance at $52. I would certainly be looking to sell into strength on this particular contract and looking for a move towards $47 over the course of the next month or so. Does that help? Yeah. I think overall, while we may see crude oil pause here, I think that this is a serious bear market in oil. We've had massive, massive damage. We're talking about over a 50% drop in a few months. And even though crude oil may stabilize in the near term because it's sold off so much and it's oversold, I also think that over the longer term, it's going to go down and stay down for quite a long time to come. And it's going to take a while before people realize this and then start to react to it. You made some reference the other day to about a secular bear market in crude. Was I right in that? Yes, I called it a generation. I once in a generation sell-off, which it is. This time we saw oil crash like this. It was back in the mid-1980s. And when it did, there was a brief spike up and then around the first Gulf War when Iraq invaded Kuwait. But with the exception of about a five-month period, when crude oil crashed, it went below 25 and it stayed below it for 10 years. So we could see oil below $80 for the next decade. This is a serious major, major, major bear market in oil. In terms of a low, right now we're flirting with $50. The 2008 low for oil was $35. We may or may not see it tested this year, but I think sometime before all of this is all said and done that that level will be retested, but probably not anytime immediately soon. You think it's probably going to settle down at these sorts of levels between around about $50 and $60 perhaps for a while then? Yes, and I'm thinking maybe $45 to $55 for WTI. I'm looking at this four-hour chart on the February 2015 contract and certainly that it does appear to be a significant amount of turnover on the Stochastic, which suggests that we could well retest the lows on the February contract over the course of the next couple of days. I'll certainly keep an eye on that. Got asked about dollar Swiss. That's going to be a similar... I mean that's essentially going to move inversely to euro-dollar, given where euro-swiss is right now. You may all know that there's a floor at 120 in euro-swiss, and it's highly unlikely that the Swiss National Bank will allow it to fall below that, and I think if the ECB does do anything on the 22nd of January, you can be sure the SMB, the Swiss National Bank, will further negative deposit rates to offset anything the European Central Bank does to essentially try and keep a floor under that. Given we're right on the very, very base on euro-swiss, then I would suggest that if euro-dollar starts selling off, euro-swiss will go up. But over the course of the next few trading sessions, I'm still expecting euro-dollar to come lower, but I still think we need to see a move back to 121st before going back down again, because I just think people are far too much one-way at the moment. So hopefully that answers your question. Is there anything else, ladies and gentlemen, that you want either Colin or myself to cover? Could you just bring up dollar CAD, Michael, so we can take a peek at that? Sure, absolutely. Let me see if I can find other ideas. Let me just change the... Stuff a little bit. Hang on, sorry about that. If I might be looking at this... Let me just get a shot of this and then put this line on here for you, because I'm guessing that... Yeah. Let's get rid of that. Great, thank you. So we're seeing here that it's still trending higher. It is kind of stabilizing a bit in this kind of 118 to 119 range. I think before we get this advanced done, if it is overbought, that we're going to see a test the 120 round number. I think it's gotten too close. And unless we see WTI get back above 50 in a hurry, that I think you'll still see that 120 be tested in the shorter term, particularly with the funny job numbers. This is helping. I think what's also quite interesting, Colin, is I just noticed this with respect to the participation rate. Participation rate on the U.S. has dropped to 62.7% from 62.9%. So the labor participation rate is at a 35-year low. So it's a fairly good jobs number, but the number of people who are actually employed is at its lowest level since 1975. That is quite sobering. So it's definitely a very, very mixed report. Once you start to pick it apart, it's difficult to try and sort of establish what the positives are and what the negatives are and how it's going to drive the markets. But I would still argue that it's the average hourly earnings that are probably the most important component of that at the moment. Right, being asked about the U.S. 10 notes. So let's start with that. I mean, for me, really, you're looking at higher bond prices, I think, on the back of this particular number, simply because I think it's going to keep rates down if you actually look at where these prices are at the moment. This was obviously the October spike out that we saw when yields went down to around about 1.8%, 1.9%, we now appear to be heading back there at the moment. We've come off the highs, which may seem to suggest that maybe we could actually drift a little bit lower. But overall, the direction of travel with respect to bond prices still appears to be fairly positive. And we've got Charlie Evans of the Chicago Fed coming out right now saying that the Fed shouldn't raise rates before 2016. Now, if he's saying that, he's now a voting member on the FOMC. He became a voting member this month, and he's probably one of the more dovish members of that committee. But it's certainly more dovish this year than it was last year. So he's certainly worth listening to. I agree. Two of the biggest hawks in the Fed have gone off in one of the moderate hawks. So if you are looking at generally a more dovish Fed this time, I think that Evans kind of replaces Coach Lakota on the most likely to dissent to the dovish side. But Lakota is probably the most hawkish of the new members. All the others are fairly centrist when it comes to monetary policy, and that suggests to me that they won't be in any hurry to start pushing rates up. They'll be very careful about what they say, but I will be very surprised if the Fed raises rates much before Q3, if at all. Yeah, and even if they do, they might do the one and then wait a little while. As well. I think they may not do their raise every meeting. I think they might do every other meeting or every third meeting or something like something slow, because that was something that Evans suggested as well was that he said even if they did go early, that he'd want to see a slower pace. Yeah, and you're only talking about 25 basis points here? Yeah, I mean, I'm talking 25. Yeah. I don't think they do 10. No, I don't think they do either. But I mean, we are in what I would call normal market conditions when it comes to rate moves. 25 basis point rate move five or 10 years ago would have been quite a big move. It's probably an even bigger move now. So 10 points maybe just sort of be like akin to sticking your toe in the water and taking the temperature of the market. Every time there's any perception that the Fed might raise rates, everyone basically gets a little bit twitchy. Hence the rallies that we've seen in the last couple of days. Anyway, looking at the 10-year note, in the short term, I would be looking at 128.45 on the support. And further down, you're really looking at 126.22. But in the short term, there does appear to be a little bit of a support area around about 128.44, 128.45. Okay, let me just make sure I haven't missed anybody in terms of questions. Okay, so I think we're pretty much done. I'd like to thank you all for listening. I'd like to also mention that Colin and I will be hosting a webinar next Thursday at three o'clock, where we'll go into slightly more detail about the European Central Bank, the expectations for QE, and also I think a look at the trading year ahead and what our expectations are for that. And you can find that on the Education page of our website. Unless anyone has any other questions, then thank you very much for listening, and we'll post this on YouTube in the next 24 hours. Thanks very much, ladies and gentlemen. Thanks a lot, everyone, for joining us today. And thanks, Michael, for hosting as always. Thanks, Spain.