 Okay, very good morning. It's Thursday 21st of May. Hope you're doing well. My name is Anthony Chung. I'm the head of market analysis here at Amplify Trading. I'm going to run you through specifically some of the market fundamentals ahead of the European Open. I'll leave the technicals for you guys to deal with yourselves. But any questions on that front, feel free to leave a comment on the video on YouTube and Sam, one of our traders, can pick that up. But just having a look at the charts and this morning and getting straight into things, let's just have a quick look at what's going on. And we had a marginally positive close on Wall Street. However, health care, a little bit of underperformance, probably just further digestion of that Moderna turnaround in terms of the vaccine trials that saw their stock price come off significantly and some of that initial kind of almost euphoric response to that news that we had on Monday reversed. And in the Asia Pacific Session, things have soured a little bit and this comes amid ongoing or increased aggressive rhetoric between the U.S. and China, kind of the ongoing threats, some more real than others in terms of a Senate ruling, which we'll look at in a moment, some more a war of words at this point. But certainly does warrant watching very closely as we go into the rest of this week, both today and tomorrow. So equity index futures off to a slightly negative footing. DAX is down about 100. I did see an interesting tweet this morning that the entire DAX, every single company combined, so BASF, Siemens, all the German automotive makers, the top 30 companies in Germany have a market cap of that smaller by 100 billion of Amazon, which is just quite phenomenal. When you actually take a step back and think about it, but hence the new reality of 2020. But yeah, index futures slightly negative. The NASDAQ and S&P offer touch. T-notes then up testing at around the R1 this morning up three ticks. Gold is lower, though, despite some of that general news flow. And quite a few people yesterday were looking technically at 1750, trying to close the day above that mark. Eventually we didn't and people looking at that as significant being a multi-year kind of going back to 2012 as a key level, really, that we need to get above in order to see the next push up towards more on that $1,800 level. So a bit of fatigue sitting in and around that price point. It was just kind of drifted lower since so gold a little bit of an anomaly in that sense comparative to the slightly negative news flow and risk of sentiment. So then about $13, but oil continues to pick up pace. You can see technically this bottom chart here in the futures. We've broken above multiple tests that we had late yesterday held during the best part of the Asia Pacific session. But when those early birds in Europe came in, we just busted through it and we've seen quite a breakout of price movement of a decent 50 cents to just find some resistance at the R1. If any of that those kind of more short focus traders just looking to exit on that nice profitable trade comes after the data yesterday from the DOE, of course, kind of supplemented the the API as we had the previous day, which was indicative of a little bit easing in the constraints that caused that negative pricing back what a couple of weeks ago now. And that would be the recalibration, if you like, of supply and demand dynamics to a slight degree is just helping keep all the prices bid for the time being. But let's just dive into the headlines and have a look at some of these topics in a bit more detail. So President Trump escalating the rhetoric against China, suggesting the country's leader now, Xi Jinping, is behind a disinformation and propaganda attack on the United States in Europe. This was one of the tweets that you probably saw yesterday. So Trump tweeting some wacko in China, just released a statement blaming everybody other than China for the virus, which has now killed hundreds of thousands of people. Please explain to this dope that this was incompetence of China and nothing else that did this mass worldwide killing. And then the response to this, this is the, again, the 21st century diplomacy is how it works is that Hu Jixin, who's the editor in chief of the Global Times, which is very well known in the market that basically is the Western or using the Western format of social media to counteract Trump's accusations that this is basically the government's response in an unofficial way. And they said, we've never heard of such a wacko in China making this statement. So I have reasons to doubt that this dope is actually a fictional one based in someone in your team because there are too many liars, so on and so forth. So quite incredible, the choice of language here and the platform of which this is happening. But now this is it. And this definitely does warrant watching really, really closely because it's it's definitely going to intensify because Republicans really are trying to make every effort to paint China as the villain here. And they need to because this is a politically important year for Donald Trump. And he absolutely knows that the economic situation in America is absolutely dire at the moment. Let me just quickly jump over to this. This is this is the level of initial unemployment claims total over two months. And as you can see, more than 36 million US workers have lost their jobs in the last two months. And like it is, there's going to be more to come. And so Trump needs to get busy and he needs to be blaming China in order to try and offset then the responsibility of his door. So that leaves a big kind of tail risk for markets where everyone's been so kind of virus focused. But generally speaking, although obviously we monitor with the absolute most vigilance, things relatively stable as they look to do this gradual loosening of the lockdown measures. But it's kind of just being almost replaced here by a trade war coming back to the forefront. So yeah, any misjudgment of this would be of grave consequence to the market. But you know, I just want to remind you, we have been here many times before. And even if the market did respond in a negative way, we know what happens next, right? Trump comes out, the administration sounds much more kind of conciliatory tone. That helps markets restore calm. They then talk about a beautiful wetter being exchanged between the two leaders and then we rally again. So if you think about it, even if this rhetoric does ramp up, how negative do you have to be? Well, knowing that the cycle just is somewhat self-fulfilling. And however bad it gets, it just gets replaced by a better situation. I guess one thing though is real tangible changes to their relationship. This certainly is. So there's kind of two things here. One is the Senate. Last night, they overwhelmingly approved legislation that would lead to Chinese companies. These are big companies, companies like Alibaba, Baidu being barred from listing on US stock exchanges and would require companies to certify that they are not under the control of foreign government. You know, so when it comes to looking at the books of a lot of these Chinese companies, it's pretty much impossible because all of the auditing and everything is done in mainland China. And so the US looking to use that as reasoning them to block these big Chinese companies, which obviously have global ambitions from listing on US exchanges. So that and also the slight step up in Trump has always been very careful to really criticize the Chinese government, but never really Xi Jinping directly. However, even that in itself has changed slightly. So, yeah, blaming Xi and also taking these more kind of direct forms, which do have real implications like the Senate bill, like with targeting Huawei or Chinese technology firms. These are things that could actually create a more long lasting, more negative move. The trade war of words, I'm not so sure, really, to be honest. So, yeah, that's what's going on there. The other thing while we're on the subject of China is that there is some important information coming out overnight, which we should be aware of by the time we come in tomorrow. And that's Chinese top leaders are looking to unveil on Friday how much they're planning to spend on stimulus, basically, to support the post-virus economy. They're going to they do this every year. They basically unveil their kind of blueprint on targeting of where they want the economy to be by the end of the year. And that generally gives you then an idea of to what level and depth of stimulus that they're looking to implement in order to hit those targets. The centerpiece of this event is what's called the work report. It's delivered by the premier, Li Kaixing, which typically contains the economic growth and spending targets, as well as goals on things like jobs and inflation. So if you think about it, the summary of economic projections at the Fed issue, every kind of not quite on a calendar, but a quarterly basis four times a year when they outline their projections for these key economic indicators, pretty similar type of thing in China. Most important number to watch, though, it is slightly different than the Western format. There's an over emphasis on the GDP number. They target a certain specific level, and this level has been decreasing over time. There's been a little bit of mixed opinion among analysts about what exactly is going to happen overnight, whether they'll target a specific number, whether they won't mention a number at all, whether they'll put in a number. I saw the Global Times was reporting in China overnight that they're looking at six percent, maybe it's target over a three year period. So looking to just draw it out, given this kind of more whatever shape you want to call it, a Nike swoosh, a W, but at some point we're at the bottom of that downturn, and we're going to be recovering, so better to look at it over a longer period. So there's a few different things there, but again, what will be the most telling is some of the language. They generally use a kind of phrase of prudent, flexible, and appropriate stance of monetary policy, that meaning then that they've got kind of options to respond and adapt and come out with new tools to stimulate the economy. But the main thing people are looking at are any shifts explicitly on the wording on monetary stimulus and also that GDP target. So there are a couple of things to be aware of. So if you were trading things like the Aussie currency, often acts as a bit of a proxy in overnight sessions, it's worth bearing in mind you need to be on the lookout for this type of information. On central banks, we did have to Fed minutes last night, and as you can see on your charts, no interest in this at all. And as we were suggesting during the briefing yesterday, given the nature of it being fairly dated and a lot of the discussion has moved on considerably since that point in time, which has basically rendered these minutes not really relevant for the current context. They did note the rapid spread to the coronavirus basically is posing a severe threat to the economy. A couple of interesting points that I did see were there was a debate about clarifying Fed monetary policy intentions at upcoming meetings. So this is that idea about the discussion that these officials have about what and what type of forward guidance do we want to provide the markets in these extreme periods of uncertainty. And that's a difficult thing because obviously something like a pandemic, which is creating is that the kind of epicenter of this economic downturns a very hard thing to kind of accurately try to forecast. And so therefore officials need to discuss a variety of different tools. We've heard this from the likes of the Fed or the Bank of England, but difficult to be really explicit with that guidance. So a couple of things that they were talking about were a fairly limited apparently discussion about yield curve control policy, something that's been adopted by some other countries like Japan, for example. This would be targeting yields for some treasury maturities. Some officials talked about making the Fed a little bit more clear about its forward guidance by spelling out certain economic outcomes such as a certain level of unemployment rate or inflation rate. That was something which was adopted by Mark Carney when he first came on board at the Bank of England many years ago. One final point though was that the minutes provided no mention of policy members discussing negative rates. So again, this is why these minutes are fairly uninteresting because that is the hot topic, but that's a hot topic that's only come in after this actual meeting took place. So we'll move on. Bank of England, this is quite interesting. We obviously have had, you had the governor, Andrew Bailey, speak last week and he made a kind of good phrase where he said, look, no tools are off the table, but at this point we continue to kind of monitor. We will use whatever approach is appropriate at that time. So he was a little bit kind of not discounting the idea of negative rates, but neither was he saying that it's really under debate at this point to any strong degree. However, since then, we had Andrew Houdain at the weekend, the FT. You've had 10 railroad from the NPC speak as well just a few days ago. And you had Bailey and some of his senior colleagues at the NPC speaking to the Treasury Select Committee yesterday. And he's made a bit of a U-turn. He's actually said the actual words he used were negative rates under active review. And again, when you're used to central bank language, it's these nuances that could be very telling in terms of where, at what point of a discussion are they with a certain tool. Those who did trade back in the kind of treachery era, so pre-draggy looking at the kind of 2000, mid-2000, 2005, 2006, 2007, this type of era. That was when we had these ECB code words and treachery would say phrases like vigilance or strong vigilance. And for the market, this was just a textbook signal of they're going to take a great hike in one month or two months, depending on what was the structure of the words that he used. And with the Bank of England, it doesn't sound like a lot, but it definitely is like a step up in the way toward negative interest rates becoming much more in focus. And I did that poll. You'll remember a few days ago when I was asking the question, will the Fed go negative? And if the Fed do go negative, I think that would be symbolic for these other central banks. And we know the ECB is already, the deposit rate is negative. But I think the Bank of England, that obviously having never gone in that territory, the Fed do tend to be the leader of these things. First, aggressively inter-meeting cut rates, whether the global financial crisis or the pandemic, they're the first to deploy QE. But if you go back to the financial crisis, the Bank of England, right on their coattails, one of the first after the Fed to adopt quantitative easing, which was at the time quite a questionable unconventional policy that was deployed. So here, if the Fed do go, I think that does open up the distinct possibility then that the Bank of England would follow. That's kind of that, the Fed sneezed, the rest of the world catches a cold kind of idea that they lead that way. So we shall see. But yeah, thought I'd point that out. Okay, but actually is a little bit underperforming, but bear in mind it's in the context of a decent dollar move that's been seen over the course of the last couple of hours. And the Dixie's up about three-tenths and the euro's also a bit weaker this morning. On the subject of the virus, the US Health Agency director warns that the virus flare up this year. This came from basically the head of the CDC, the nation's public health body, told the Financial Times in exclusive interviews that the rapid spread of the coronavirus in the southern hemisphere suggests it is likely to flare up again in the US this autumn and winter, raising the possibility of a second round of lockdowns this year. So I mean, that would be, you know, think about it from a Trump political point of view. If we were to go into a second round of fairly stringent lockdown in America during the autumn and winter and you've got an election to handle in November, that would be really problematic for him because that's going to have obviously direct economic implications. We might see a slight mild recovery only then to come back down again at the worst possible timing. So that for me, if that did materialize, not only is it then, well, how bad is this second phase if it does flare up again from the virus side? But also, what does Trump do in response? Because, you know, we're already seeing it at the moment, the way he's kind of framing China in the way that he is. If that was to happen, you know, the gloves are off then, he would be really reaching, I think, and that could again create quite a lot of significant risk for the markets in that sense. So yeah, thought I'd point that out and just give you an update on that front. Canada-wise, there are actually a number of important things to look out for. So coming up in about an hour's time, you've got the first of the major manufacturing and service P&I numbers. These are flash readings, so you do need to be mindful of these in European assets. They are readings for the month of May. So if you remember, April was absolutely catastrophic in terms of the size of the collapse, obviously given the immediacy of the lockdown. May is going to be pretty dire reading, but most of these figures are going to see a mild rebound from some of the lower levels of which they were at before. You know, so if I take some of the ones like German manufacturing, it's going to probably uptick slightly, but still on heavy contractions as far as the PMI is concerned, sub 50 at 39.2. If you're looking at the Eurozone, there's a whole manufacturing at 38 and services at 25. Services, certainly the hardest hit. And a graphic I can quickly show you here is looking at the number of unemployed persons in selected industries. Now this is looking at America, but this is very much a similar theme from across the world. It's obviously leisure and hospitality that's getting hit the most because things like bars, restaurants, clubs and pubs, things like that are completely shut down. It's not like an electronic retail trade or governments working remotely. They just can't operate at all. So these people are obviously getting laid off and that's the real area of significance when it comes to the employment situation. So keeping out on those, they're coming out Eurozone from 815 France, 830 Germany, 9 o'clock Eurozone, UK manufacturing service, Flash PMI is coming out at 930, so keep an eye on Sterling as well. Then going to the US afternoon, we get the obviously the Thursday weekly jobless update, expected at 2.4 million. 2.4 million would continue this still very large numbers of initial jobless claims, but a continuation at least of the extremity of what we saw in the initial lockdown phase that we had. If you think about it then, from a business point of view, there was such uncertainty, even for a company like us, there was a real lack of clarity at that point because we are right in the early acceleration phase of the virus, didn't know how bad it was going to be, you didn't know how the central bank was going to respond, you didn't know how the government was going to deal with this, you didn't know really what the lockdown meant at all. And so a lot of these smaller medium-sized businesses literally were letting people go in preparation for just saving as much cost as possible. Now that there's a little bit of visibility returning to some degree, these levels are kind of flattening out a little bit and will likely continue to decrease, but that doesn't detract from the point as I showed you earlier that the unemployment levels in America, we had that non-farm payrolls report obviously a few weeks ago and it came in at minus 20.5 million. Well, if you look at the cumulative over two months, we're almost, well, we're more than 36 million. So the next payroll number won't be as bad probably, but it's still going to be a big number in terms of the economic reality. How much is that going to move markets? Probably not a great deal. So remember, there is that quite clear disconnect between Main Street and Wall Street at the moment. So yeah, the jobless claims today on that point, I don't think it's going to be a market mover to be quite honest. It really has kind of impact value has diminished over time as that shock factor has kind of been bedded into market psyche and price now, but again, worth keeping an eye out for. You've got the Philly Fed Business Index coming out as well at the same time and then going to the afternoon, you get the Flash Manufacturing Service readings coming out from the US and existing home sales as well, which obviously going to show as a significant decrease against the prior reading. From a speaker's point of view, there's a few from the ECB, Panetta speaking from the Fed's point of view, quite a busy docket. Fed's William's a voter speaking at 3pm London, so 9 Chicago. Clarida at 6pm London, midday Chicago. Powell opening remarks at an event about how COVID-19 is affecting your community, maybe a 7.30 London time in the evening, so 1.30 Chicago. Yeah, and that's pretty much it. So there is Ascension Day being observed across some spots in Europe, but as far as I'm aware, Urex is trading as normal. So if you are trading things like the Bund or the DAX, just normal, but volume potentially could be a touch on the lighter side. So a public but not a market holiday in that respect. All right guys, that's it. So feel free to leave a comment if you have any questions and don't forget to subscribe to the channel and obviously another update to come tomorrow morning. So I'll speak to you there. Thanks very much.