 Hi there, I'm Anthony Chung and I'm the head of market analysis here at Amplify Trading. Every weekday morning I'll deliver a fundamental rundown ahead of the European Open, but if you subscribe to the channel you'll also get content from the rest of the team. So let's begin. Good morning. It is Tuesday the 6th of October. I thought I would start on that dramatic note of the president coming back to the White House in his chopper no less, but yeah of course that being the big news from yesterday as promised he has now departed hospital and returned to the White House and definitely as strange as that might sound that was taken as quite a positive, late when he tweeted that actually before he actually left in itself physically, we did see a bit of a pop into the clothes on Wall Street to finish firmly higher across the board and that general sentiment has fed through into the Asia Pacific Session. Quick look at things then and I could have wrapped up some of the news headlines from overnight and this was what Trump tweeted last night, I'll be leaving the Great Walter Reed Medical Center feeling really good, don't be afraid of Covid, don't let it dominate your life. We have developed under the Trump administration some really great drugs and knowledge, I feel better than I did 20 years ago and the market actually did respond to that and we did see a bit of a pop higher last night and I'm just going to bring up the S&P chart here for the moment to have a look at and this was a little jump that we saw last night here right on the right hand side but let me just remove my webcam for just one moment so really strong push higher yesterday and actually we'll go back to that chart that we've been kind of running over the course of the last week or so which has the complete narrative of the really topsy turvy price action we've witnessed in the S&P 500 over the last, this is just the last week, this isn't 2020, this is the last week of 2020 and here just drawing your eyes to the two main points which is the red boxes here, Trump test positive for Covid was here and if you actually look at where we closed last night we literally closed out at the peak so you can see here we had a brief rejection of what was going into the late European afternoon, a double top had around that previous high that we had printed back at the beginning on the 1st of October and it just busted through that on the back of the Trump tweet that he is in fact going to leave hospital and now actually that providing a bit of an area of support for any price action that we're looking out for on the intraday basis if we do come back down to 33 38 and obviously now looking for perhaps a little bit of consolidation I would say that fast money move that we saw on the technical breach through that area of resistance I don't think it's too surprising to see us push up to as you can see here right up to bang on 3400 so the psychological level now providing an area of obstacle of resistance and you can see that has also played out in the Asia Pacific session so at the moment not looking to be too interested until we make or break on either side of these particular ranges for the time being and on the daily chart you know we're coming right back up towards that area of that long-term trend line that we've had in play all the way back from the recovery of the rally from April depths if you like on retests in May and June and September and now we're on the bottom side of that trend line but coming up to that retest and we're at 3400 it's quite a key level obviously it does encapsulate that previous all-time high that we saw before the pandemic really hit and then also was an area of resistance back in mid-august before the eventual push out that we saw to all-time record highs as a quite key area here on the upside as well as symbolically moving back to our 3400 but for the moment I don't would be too surprised if we just get a bit of a period of consolidation here between these upper and lower boundaries of 3400 and really 3388 is what we're looking at here would be key areas to look at for the rest of today but elsewhere then other stock futures have followed suit as I said overnight the age-specific session and yesterday really one thing I was looking at last night which was quite surprising because I wasn't sat at my desk for most of yesterday was the performance of the US tenure and just having a look at that here you can see really quite sharp down tick that we saw this is going from what this was at the end of last week so this is looking a little bit toward then when the payroll release came out and then going into the first commencement of trade on Monday and we declined a good amount if you actually look on the daily though quite an interesting area here that we've got to now which is on the on the bottom side an area here you can see of resistance or excuse me support going back to late August where we bounced and then also bringing into play the 2nd of July but generally is that is a bit of a range here on the downside and yeah a decent push hard in yields yesterday with that equity strength and generally the read across here is a couple of things for one in the fixed income market specifically the prospects of rising treasury debt issuance on this expectation of further US fiscal stimulus created pronounced bear steepening and rates essentially long-end rates rising fast and short-term given the expectation of then the recovery that would ensue and future inflation given a fat then if fiscal stimulus is force coming in the near term and what that could mean then later on down the line it does also come ahead of 3s 10s 30s treasury offerings we're going to get basically kicking off today Wednesday Thursday respectively and furthermore there were several corporate issuers including Pepsi and Berkshire Hathaway who both priced 10-year tranches for anyone who's not familiar with what that means essentially what you can see is a little bit of downside pressure in the main benchmark 10-year in the intraday space in the futures market whenever there's competing amounts of supply and that can come in the form of kind of high quality corporate debt particularly when it's issuing the same debt maturity i.e. a 10-year and so that then can take away from some of the short-term intraday demand then for the US 10-year and then also there was a slew of high yield offerings many desks noting that are likely rushed to launch riskier bond deals before entering a perceived pickup in volatility as we go into this US election remember the US elections not just going to be a one and done deal done and conclusive at the beginning of November it's like to drag out for the entire month so perhaps then a lot of these other high yield offerings looking to come to market in order to preempt that period of kind of blackout that they might be able to come and get rid of that issuance so a couple of things there I think which created a fairly pronounced reaction in the fixed income market yesterday but certainly the US 10-year is at quite a key level of support that's worth keeping an eye on the other thing of course is at the combination of the positive developments on Trump and also a little bit of movement on the stimulus front remember these were the two key factors that we were commenting on that would be really pivotal for market sentiment and direction yesterday and will continue to do so throughout the rest of the coming days for this week but the positive risk tone did see the dollar offered yesterday as the dollar's crept up a little bit here into the European open it's basically flat and addixy at the moment and that's largely reflected in the major pairs not too much movement in the overnight session but both euro dollar and cable obviously moved higher yesterday predominantly on the back of that dollar weakness and that came irrespective of the fact that ISM services index surprised to the upside with the headline printing at 57.8 against expectations of 56.3 so if anything it was kind of an unwind of risk premium into the dollar just general renewed risk appetite this was all very much Monday's session now equally so obviously these positive signals that we've talked about is going to give an underlying support to crude futures WTI crude you can see here put in a really stellar day yesterday and we rallied quite sharply going from really a $37 hand or all the way up to nearly 40 bucks main thing people looking at here as well as putting in its biggest daily gain since May growing optimism more fiscal US stimulus force coming Trump leaving hospital following his COVID treatment dollar weakness as well also helping the complex of course from yesterday's moves simultaneously this is overlaid with tropical storm Delta I'll just quickly show you that on my chart here because might be one that you're not too familiar with at the moment but Delta is quite far out at the moment from actually close proximity to the sensitive Gulf of Mexico but if we click here and you can see the directional movement is anticipated to be moving that way and so definitely warrants keeping an eye on as it drifts towards the Gulf of Mexico it is poised to clip the Yucatan peninsula before coming or becoming a record 10th storm to hit the US this season has been frequent weather activity in this particular region which definitely warrants monitoring closely but yeah just having a look at oil here I'll put it back onto a daily chart and this this rectangle here was the key area of support that we were talking about at the back end of last week that combining then the initial high that we saw on the aggressive gap down the beginning of March and a failed OPEC meeting that we saw on that outbreak of the price war between Saudi and Russia and then we had the retest that came in the early part eighth ninth of September has provided a bit of a force for price and it has continued to do so once again here most recently on Friday before we've we sprung back up in towards now sitting at around the 21 day and 200 day moving average moving then closer toward what's been going on I did mention Trump of course and we did briefly look at the stock market the stock market actually if we go back just briefly to the s&p here I just wanted to to measure up something and that was the fact of how short lived this round this sell-off has been since Trump tested positive and if actually look at things we are sharply higher than where we were even before that news broke and if I put my currency indicator on if we take the low of the morning of that news breaking on Trump to where we were at the peak of yesterday's price activity you can see there if you can see in my mouse we have gained 3% since that low and that basically is in market activity given the weekend close around 24 hours worth of price action so really powerful or a rally that's been observed and what can you expect from the president well none other than him tweeting about the great stock market being higher in combination with that dramatic video he did another address if you like from the White House which he's been doing consistently the last couple of days talking about jobs jobs jobs and so on so it's very much back to to business almost it seems from that point of view few things about Trump then and his health so basically the medical team said that Trump has met and exceeded all the discharge criteria but it's not entirely quote out of the woods will receive another dose of remdesivir before going home before having another dose tomorrow so that was the main kind of side of things on the stimulus side where we are with that particular story at the moment because that also is an instrumental one for market movement right now and House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin spoke by phone for about an hour on Monday and we're preparing to talk again today although nothing has been agreed upon yet and late trade reports saw GOP sources suggesting Senate approval stimulus is still seeing a doubtful for the moment so definitely keep an eye out for any whips or price action that might come from any developments on that front and as I said Pelosi and Mnuchin will be talking at an unspecified time today and so definitely that could be could be important what comes out of those discussions otherwise having a look at other news from overnight we did have the Australian central bank decision I would say going off the market economist consensus no real surprises here they maintain rates expected to keep their cash rate in three-year target rate at 0.25% that is all very much expected in reiterated guidance that will not increase the cash rate until progress has been made towards full employment and inflation but let me just bring the Aussie into shot and explain some of the recent price movement that we have seen here because there was a little bit of fluctuation and overnight so when the actual release came out we did see a momentary blip higher in the Aussie dollar and if you remember what I was talking about yesterday there was quite a lot of the futures market position for a potential rate cut irrespective of the fact that economists' expectations on the balance were for a hold so a little bit of unwind of that so a momentary blip higher in the Aussie but failed to sustain and since that point this kind of recommitment I guess for further potential to leave the door open for additional monetary stimulus as you can see here has just meant that after that move we've just decided to break down a little bit actually the most pronounced move overall in the Aussie has come as Europe has stepped into the market and I know it looks quite congested here on the chart but actually if you look at the price action on a smaller time frame really it was a break of the overnight Asia-Pacific session which saw that run down in price to where we're at at the moment and as you can see now just keeping an eye on a fairly short-term trend line going back to the 30th of September it's been tested a couple times any break below there you've got that previous load that we've seen on Monday morning and the S1 here so a decent level support might come in down at 71.64 if we hold the break of that trend line in the Aussie this morning just having a look then at the calendar for today because it has been relatively light I mean other than that there hasn't been too much new breaking developments in other stories from the overnight session very much about how we ended yesterday was the the main theme so let's have a look at what else is happening we've just had the German factory orders come out this morning to just update you industrial orders in Germany for August came in at 4.5 percent above the expected 2.6 no real reaction to that though in either the euro the DAX or the future the things I am looking out for today are mainly speaker based so there's not really too much in the way of major economic data today UK construction PMI is seldom a market mover for sterling currency of the PMI as it typically is the kind of least impactful out of services being the most manufacturing second construction third in the USA you do get trade balance and jolts job openings the main thing I'm really looking at is this which is a particularly busy speaker slate Christine Lagarde giving pre-recorded Wall Street Journal online summit comments no text expected but she does speak again then officially on the 10th anniversary of the European stability mechanism that'll be at 2 o'clock and what's going to be quite interesting today to watch particularly in regard to the ECB is you've got the president speaking and then you've got the chief economist Philip Lane speaking later on at 4.30 a separate event where he takes the stage with the Fed chair Jerome Powell but the reason why this is important is as I discussed yesterday in the briefing Lagarde and Lane have had quite contradictory views over particularly the euro exchange rate so we're interested to see how that plays out today and whether there is any continued contrasting opinions as per sources were indicating last week about this split of opinion that's emerging within the European central bank council. Jerome Powell then speaks at the NAB on global reset economics business and policy of the pandemic so it could be a very interesting speech and I do think that if anything there's a lot more current than probably what the FMC minutes that will see released tomorrow evening would be given there how dated they are and by nature. Powell speaks then at 3.30 London time you've then got Harker and Kaplan both of voters of a neutral disposition speaking later on in the evening and a non-voting member Bostick is also on the docket today and that's pretty much it so overall my assessment of things at the moment is I'm pretty neutral about how I feel about the open today equity markets obviously pushed up high yesterday I don't see anything particularly new here that would make me feel like potentially we're going to just repeat that price activity if I was looking at the SMP here that was a as a reference point I would as I said on that other chart potential I think for consolidation around these points just given the significance now you can see quite clearly here the price activity for October so far that resistance turn support just helping that the bottom side of that range and on the upside if we do break 3400 though it does get quite interesting because there is a bit of clean air here to the upside and you can see there's not a great deal of technical resistance until we would really get up to around the R1 which would also be at around those previous highs you can see here on the left hand side which would be more around the 3414 type level so I'm really quite interested to just keep an eye on things from from that perspective so a breach of those ranges on the downside probably pivot just looking to capture some of the initial lows that we've seen on the break higher up before then the push came upon the Trump tweet last night and then on the upside the upper bound at R2 in those previous highs seen back in early mid September if we breach the 3400 or the 3388 kind of band of price activity but I don't think it would be that surprising to see a bit of consolidation still a US centric kind of session overall I think will dictate things particularly given the fact that stimulus talks and an ongoing kind of monitoring of Trump's health are still of the order at this present time and as well as monitoring a lot of these ECB president chief economist and fed share power comments okay guys that is it from me short and sweet this time and so I wish you a good day ahead and I will see you later in the week thanks very much