 Right, good afternoon, ladies and gentlemen. Welcome to this week's Monday Market webinar with me, Michael Houston, in the absence of my colleague Jasper, who is away for the next two or three days. Quite a bit to get through this week. Hopefully you can all hear me loud and clear. Any questions, please feel free to direct them live via the chat facility. So I'm just going to type in questions here to that comment that I've just posted on the chat facility. Just let's get the quick disclaimer, risk warning out of the way before we get underway because we've got quite a bit of stuff to get through this week. We've got a whole host of economic data coming out of not only the US but also China, the UK, as well as Europe. So hopefully if you have any questions, please feel free to direct them my way. But first and foremost, we're coming off the back of a very, very good week for equity markets last week. I think a lot of that was prompted by expectations that I think the Federal Reserve could well remain on hold for the remainder of this year. Even though Fed policy makers at the weekend, Stanley Fisher in particular, is at pains to keep the prospect of a rate hike this year on the table, I think the Fed funds rate expectations give the lie to that particular thought. And I certainly think in the context of what we've seen over the course of the past few weeks in the context of US economic data, I think this week's US economic data in particular could well reinforce the narrative that the Federal Reserve will probably remain on hold. Certainly this month, at its October meeting, but potentially at its December meeting as well, unless we see a significant pick up in inflationary pressures, as well as an improvement in the labour market, which for the last two months, we've actually seen some very, very poor numbers. Yes, they've been above 100,000 jobs, but they've been significantly below the 200,000 average that we've seen for the most part of this year. So we've seen a little bit of a lacklustre start today on the back of last week's gains. And I think a large part of that reason is down to the key equity market indices, particularly in the US and the UK, bumping into some significant retracement levels. So I'm being asked about calendar effects. October to December are generally stronger months. Generally, they do tend to be simply because you have what I would suggest is a little bit of a pick up after a very weak Q3. But I think with respect to calendar effects, if you look at the quarter, and we're digressing slightly to answer a question that has just been put to me to buy one of the attendees, Q3 over the past few years has actually been a fairly positive quarter. Certainly in the context of if you've sold in May and gone away over the past five to six years, you'd have lost money every single year bar this year. So we talk about calendar effects. To be quite honest, I think the importance of them is slightly overstated, certainly in the context of what we've seen so far this year. I think what's driving equity markets at the moment is really less about the growth story because if the growth story has been continuously been revised lower since the beginning of 2015, we had such high expectations that 2015 would be a fairly positive year for global growth. Certainly expectations for US rate rise were priced in and around about June. Now we're sitting here in October and wondering if actually the US will raise rates at all, given concerns about a weakening global economy, but also now there is some rising evidence the US economy may not be as strong as originally thought. So while the Fed really does want to get off to zero, it really begs the question is actually can they actually do so given what's happening in the manufacturing sector in the US economy as a whole, but also I think we have seen some pockets of weakness in terms of the consumer sentiment of the US economy as well. And it's something that I've touched upon in previous webinars over the course of the last three or four months. US consumer spending certainly in the context of retail sales and durable goods has actually been worryingly weak. If you set aside auto sales, which to all intents and purposes don't usually require a big upfront cash down payment, there's an awful lot of what I would call leasehold buying or HP higher purchase buying of US auto sales in a similar way to the avoidant car market that we're seeing here in the UK. So certainly in the context of what we've seen thus far, we've seen a nice little rebound over the past few days. We've seen certainly in the case of the FTSE 100 it rebound back to the 6450 level breaking above the September high as quite conclusively around about 6,200 and 80, 6,300, but it's run into a bit of a wall around about 6450. It coincides with the July lows, but it also coincides with the 50% retracement of the down move from the all-time highs that we saw in April to the August lows of 5,765. So certainly in this particular context we've seen a little bit of weakness over the past couple of days and really for me 6450 is a very, very key level. On its own it's probably not that important, but it's certainly if you read it across to US equity markets and it's something that I've touched upon in the chart forums today in my analysis of the rebound that we've seen over the past week or so, if you look at the chart forum on the US SPX or you actually go to the market pulse and go to the chart forum there it gives you a list of the latest updates for the various markets that I've been looking at over the course of the past day or so. We've had a similar rebound but in this case what we've seen is a pullback not only off the September highs but also a 61.8% of a natural retracement from the May highs, the May all-time highs to the lows that we saw in August and I think this 2020, 2025 level on the S&P 500 is particularly important in the context of the overall rebound simply because it also coincides with the September highs as well. So looking at the UK 100, the FTSE 100, looking at the US S&P 500 and also looking at the US 30 or the Dow Jones it's a similar sort of story with respect to the current rebound. We're pushing against 61.8% retracement levels or also even though we've pushed above the September highs in the Dow we actually haven't overcome the 61.8% retracement level of the entire Dow move from the May highs to the July lows. So that's the S&P, the Dow and the FTSE 100 put to one side. What do we think about broader European markets and I think here the rebound has been somewhat, it's been much more feeble and this is no better borne out than in the reaction of the German DAX. If we look at the German DAX certainly in the context of this daily chart which I'm currently looking at we found a very good area of support around about 9,300 but what we've seen thus far the rebounds of it have been fairly subdued despite the fact that we saw very, very good gains last week. Now there's no question at the moment the DAX continues to remain in an uptrend from the 2011 lows. The trend line of those 2011 lows around about 4,960 pretty much bears that out. Certainly the move down through those lows took tithing quite nicely with the lows that we saw in August as well. However, the lack of any substantive rebound relative to the rebound that we saw in September is a bit of a worry for the DAX in my opinion and we really need to see a move back above these highs that we saw in September around about 10,550. Furthermore, I think if we draw some similar retracement levels on the DAX we can probably get some idea of how feeble this rebound is in the context of the retracement levels. We haven't even as yet got back anywhere near the 38.2% retracement level of the down move from those lows. Now we did in September but thus far even though we've made a slightly marginal new low 9,300 we've failed thus far to get anywhere close to that 10,480, 10,500 level that we saw in the early part of September. Similar sort of story also on the Euro stocks 50 which is a much broader cross-section of European equity market sentiment. Certainly again this is a similar sort of retracement level. Again we're well short of the September highs and we're also below the 3,300 level on the rebound from the lows that we saw at the end of September. So even though we didn't make a low or low in the context of the Euro stocks 50 once again we are pushing back against a plethora of resistance levels between 3,300 and these peaks here. You've got one at the end of August, beginning of September, beginning of September again, the middle of September and a series of highs at the beginning of this month as well. So looking at the rebound in equity markets I think if I'm going to become confident that this rebound that we've seen over the past few weeks has legs then what I would want to see is first and foremost the German DAX to really start to gear up for a strong rebound because what struck me about this rebound is how strong we've seen the US markets rebound relative to the markets here in Europe. And I think a large part of or a good catalyst or a potential DAX rebound could be this week's Chinese data. Now that's due out tomorrow morning. We've got the latest Chinese trade data and I think in that context that could be potentially quite important and we can certainly look at the calendar for the data that's due out. We've got expectations here for 13th of October the Chinese trade balance with exports and imports. Now last month we saw August exports drop 5.5% but more importantly imports drop as well. So these are the expectations for tomorrow morning. We're expecting a 6.3% decline in exports and a 15% decline in imports. So the recent rebound that we've seen also in commodity markets in particular in the context of Brent crude prices and also in copper prices has coincided with the rebound that we've seen in equity markets. If these numbers here disappoint then the recent rally that we've seen in copper prices could come significantly unstuck. And I think it's quite noticeable that the recent rebound that we've seen in equity markets also coincides with the rebound that we've seen in copper prices and also coincidentally it's notable that we actually haven't been able to take out the September highs. So you could argue there's potentially the formation of some sort of base here in copper prices by virtue of the fact that we haven't taken out the August lows but to confirm that base is in we need to move through $2.50, $250 towards the 200 day moving average on the cash copper contract that we currently have here. So this high here is quite important for me in the context of where we go to next in the context of where copper prices currently are. And it's a similar sort of story when you actually look at Brent crude prices and US crude prices as well. Similar sort of rebound, again we've managed to stay below the August peaks. We weren't able to break through them by any substantive amount. There was some evidence that we might have caused a little bit of a rebound but again we haven't been able to break through it. We're also still in the downtrends that we've been in for quite some time from the May highs to the August lows. More importantly we're still well short of the 50% retracement level and the 200 day moving average. So again it's quite intriguing how these commodity prices have mirrored the rebound in equity markets and I certainly think that's going to be important in the context of where we potentially go to next. US crude prices have rebounded that much more. You can certainly see that in the context of what we've seen over the course of the past week or so. Here we have actually taken out the August highs but what we haven't done is we haven't taken out the 200 day moving average and I think that for me is particularly important in the overall debate as to whether or not we're about to push higher in European equity markets. Certainly if we go back on the 200 day moving average here what we've got is a clear indication of how thus far the downtrend since the peaks back in June last year, June, July last year how the 200 day moving average has pretty much capped any recent attempt to reverse this particular move down in US crude prices. So I'm going to be keeping a particularly close eye on the 200 day moving average and the 200 day moving average currently comes in around about $52 a barrel. We'll find we're just above $50 a barrel. Let's just do that right now. It ran about $50 and a half a barrel. So let's draw a horizontal line in through that peak there. So $50.80. Peaks are $50.80 on Friday. We need to close above those highs to suggest that we could potentially see a rebound back towards the sort of levels that we saw in the middle part of this year. So certainly commodity prices and equity markets do appear to be inextricably linked in the context of where they're going to go to next. So certainly this week's Chinese data could play a significant part in that. We heard an awful lot last week about production cuts particularly in the industrial metal space and that obviously prompted a little bit of a rebound in Glencore shares in particular but also in Rio Tinto. So let's have a quick look at that particular sector because I think in that particular context the share prices of these particular companies could signal a significant indication of whether or not we're going to get a reversal. For me I think the key level on Glencore remains around about $150. We remain well short of that. Yes, we are above the 125 share placement, 125p share placement level that saw them play shares earlier in September. But overall we need to really consolidate this move higher through 150 pence and essentially it looks to reverse some of this precipitous sell-off that we've seen thus far in the Glencore share price over the course of the last few weeks. Certainly I think the portents are promising. This particular candle here does encourage that potentially we could have seen a little bit of a base. This hammer on the weekly chart could suggest that maybe we've seen a little bit of a bottom. What I would then hope to see is for the share price to remain above 100p. Why? Because that's the lows that we saw last week, so 99p, 100p. I think if we go back below there then we could be in a little bit of trouble. But while we remain above 100p then ultimately we should remain fairly constructive for a little bit of a rebound in the Glencore share price. And importantly I think with respect to miners is Rio Tinto. I think if you look at Rio Tinto that can give you a broad indication of where the mining sector can go next. And at the moment is there potential for a little bit of a bottom here, a double bottom? The key level for me on Rio Tinto remains around about 26.45, 26.50. Get a rebound through that, get a push through the 200-day moving average and you could see the FTSE 100 rally quite strongly because if Rio really pushes higher then it could take the rest of the mining sector with it and the commodity sector in general. And that could well be fairly positive for the FTSE 100 and equity markets in general. So I think if you're looking for a bellwether for commodity prices, look at Rio Tinto, look at Copper, keep an eye on those two because I think if we get significant breakouts in those two pairs there you could see a significant squeeze higher. My biggest concern I think with respect to that particular story is going to be the economic data that we see out later this week particularly out of China but also I think out of the United States of America because all of the focus I think was on last week's FOMC minutes. They were slightly more dovish than I would have expected them to be simply on the basis of the fact that everyone was saying that how close the September decision to keep breaks on hold was and yet the data since that meeting has been anything but positive. That then stands to reason that Fed policy makers are much less likely to be keen to tighten policy in the immediate future given the glide path of the data that we've seen since that September meeting. So I think that pretty much rules out any prospects of an October meeting which means that this week's particular data that we're going to see out of the US is going to be particularly important. So we're going to start looking at the US data with Wednesday and we have retail sales for September. Now retail sales for the most part of this year have actually been a little bit disappointing if truth be told. Certainly in the context of the numbers that we've seen in the columns here. Now it's the middle column here that I'm particularly interested in. Now over the past July and August we've seen fairly good retail sales growth and certainly I think in the latter part of this year it has been fairly positive but in the first part January, February, March and April a little bit disappointing. More importantly, durable goods which generally tend to be much bigger ticket items things like refrigerators, televisions, rather more expensive items. Since the beginning of the year it's been undoubtedly negative. In fact we've only had three positive months out of the overall months that we've seen thus far. So durable goods are negative for the year. Retail sales are a little bit more encouraging but nonetheless I think they are still fairly disappointing when you have an economy that's 60 to 70% driven by consumer spending. Inflation is low, average earnings are still coming in around about 2% and inflation is significantly below that. When you compare them to UK retail sales which are much, much better in the context of what the US economy is doing. It does throw open the question as to how resilient the US recovery currently is. We've also got the US page book. Now the US page book is the Fed's outlook for the 13 Fed regions as to how well the economy is doing on a much broader basis. That could well give some interesting insights particularly into the manufacturing sector and the manufacturing sector is one and industrial sector will be one particular sector that's going to be in focus this week particularly on Thursday and Friday because we've got Empire Manufacturing for October on Thursday and we've also got US Philadelphia Fed Manufacturing on Thursday as well. Now if you recall in September every single regional manufacturing sector posted a contraction. So what we're looking for here in the October numbers is an improvement on the numbers that we saw in September but the predictions aren't particularly positive. We are expecting an improvement in Empire Manufacturing and Fully Fed from minus numbers but they are still going to be in minus numbers albeit slightly higher. So an improvement from minus 15 for the Empire Manufacturing to minus 8 and an improvement from minus 6 to minus 2 in the Philadelphia Fed and on Friday we have US Industrial Production for September which given the poor readings of those regional surveys that we saw last month it's likely to be another weak number. So certainly be interesting to get some of the insights from Fed policymakers later this week and we do have a series of or a number of Fed speakers who will be speaking not only later this week but also later today. We've got Jeffrey Lacker, Charles Evans and Lail Brainard. Now I'm going to be particularly interested in what Mr. Lacker has to say because in the context of the make up of the FOMC committee he was one of the few members who at the beginning of August suggested that the obstacles to not raising rates were very, very high. He subsequently voted to keep rates unchanged. So it will be particularly interesting to see what Mr. Lacker has to say later today on that very, very poor payrolls number that we saw at the end of just over a week ago but also the much weaker than expected inflation data. So he's probably much more of a centrist than the rest of the committee so in that context what he has to say will be more important than what Charles Evans has to say because he's already on the record of saying he doesn't want to see rates rise before next year. So what he says won't be a surprise. Mr. Lacker will be important in the context of he was looking at raising rates in September, he changed his mind. So what do we want to know is where is he now? And I think that could give some guidance as to what the Fed is likely to do over the course of the next few weeks or months. So let's get on to the currencies. Let's get on to the currency pairs because I think that's probably what you want to hear about. Eurodollar continues to find support despite the fact that inflation in the EU continues to remain weak. On Friday we've got European CPI data, final reading for September and that's expected to show a minus 0.1. It's looking to show deflation in Europe minus 0.1%. And that's going to raise expectations that the ECB is going to do more. I would park that thought because we're only six to seven months into the current quantitative easing program. It's not due to run off or expire for another 11 months. And all these expectations about will the ECB do more? To my mind it's just noise. We've heard policy makers continue to say they remain prepared to do more but being prepared to do more is a long way from actually doing any more than they're already currently doing. So I think Eurodollar will probably find its downside still fairly limited in the short to medium term but the key resistance level for me is this 114 level. It really does not want to go through this 114 area that I've been looking at over the course of the past few days and weeks. It's really, really struggling to get through there. And while we did have a little bit of a spike up in August around about 117 ultimately it really depends on how well Fed policy makers try and talk down or talk up expectations of a US rate rise sometime this year. I still think that there's still an awful lot of dollar longs out there who could well get carved up quite nastily if finally the Federal Reserve decides that it's not going to raise rates this year. And I still think that remains unlikely unless we see a significant improvement. Irrespective of what policy makers might say, irrespective of what we see over the course of the next few days and weeks. So 114 on Eurodollar, very key resistance level. And every time we've been above there we haven't been able to sustain it for very long but ultimately we are finding support at slowly, slow, higher levels and as such we could slowly grind higher into the end of October towards November. Sterling against the dollar is a similar sort of story. We got the Bank of England meeting last week. We did find a little bit of weakness over the course of the last few, since the August highs and September highs, that is a worry. We are getting lower highs and lower lows but we do have a very, very strong support area between 150 and 151 despite the fact that we made a marginal new low here at the end of September, beginning of October. Ultimately what I want to see with respect to cable is a move through 154. I don't think we're going to explode higher. I think there's still far too many obstacles with respect to uncertainties about what policy is going to be for central banks. But ultimately I think we're in a broad range on the pound against the dollar. The bottom of that range is pretty much down where we came from at the beginning of this month and I would expect over the course of the next few months, sorry, the next few months, next few weeks is to see the pound slowly start to move towards around about 155, 156 with a base around about 151. It's not particularly exciting, I know, but ultimately that's where we are at the moment. Dolly Yen's slightly different story. I think there's an expectation that ultimately we could see the Bank of Japan look to embark on further policy easings. At its October meeting at the end of this month, I still think that's unlikely. I think that's highly unlikely. They're pretty much all in as it is and the market does seem to reflect that, certainly in the context of this chart here, which is a nightmare if you're looking to trade it with any degree of certainty. But what I can say and I think what I'm fairly confident about is we're in a range. Top of that range is anywhere near 121. The bottom of that range is anywhere near the lows that we saw throughout September around about 119. So obviously this big spike lower here was as a result of that very poor payrolls number that we saw at the beginning of the month. But since then we've rebounded back as expectations have been slightly reset. But I certainly think that in the context of where we are at the moment the likelihood is Dolly Yen is probably going to drift lower over the course of the next few sessions. But at the moment it's pretty much stuck in a range. So we've done brand, we've done WTI. Let me just quickly touch upon gold because I think gold is very important in the context of where we could go to next. Gold prices at a very, very key level at the moment ladies and gents. Keep an eye on that 1170 area. Also keep an eye on that 200 day moving average. Because I think if we get a break above this 200 day moving average if we did see a breakout earlier this year and may have proved to be a false break but ultimately what we're getting is a slightly more positive momentum building up in the short term moving average. We've managed to hold above those lows that we saw in September. But the weaker side I think remains the upside simply because everyone was so overly negative on gold earlier this year. And I think there is potential for a very sharp move higher and certainly with the seasonal aspects that we've talked about with respect to the market environment which one of you raised earlier with me, the Q4 for gold generally tends to be fairly positive because of jewellery purchases and Diwali and things like that. And I think we've certainly seen that in the context of the move that we've seen in the past couple of days. But ultimately we need to break through 1170 and the 200 day moving average to really push on towards the highs that we saw in May earlier this year. Other items on the calendar this week. We've got UK data out. That's going to be unemployment. Not really expecting any surprises there. Average earnings is going to be of particular importance given how reluctant the Bank of England alongside the Federal Reserve is with respect to raising rates. I think it's unlikely that the Bank of England will raise rates before the Fed. It's always been a follower. People have talked about Mark Carney in his tenure as head of the Bank of Canada not really being dictated to with respect to what the Canadians do with respect to interest rates. But his role at the Bank of Canada was slightly different to his role at the Bank of England. At the Bank of England he's one of nine voting members with the Bank of Canada he wasn't. So he had much more scope to be more unilaterally with respect to policy than he can be with the Bank of England. So we've still got that A1 split. If we get strong average earnings data then I would expect more policy makers to maybe come on board and dissent. But what we're looking for is a number in excess of 3% up from the 2.9%. We saw in the previous month. So that's the UK data that I'm looking at in particular this week. The inflation data which is due out tomorrow is not really expected to show up any surprises. 0% CPI, core CPI 1.1%, RPI 1.1%. So again, no surprises there. And US CPI out on Thursday along with Empire Manufacturing and Philadelphia Fed. So in the absence of any further questions from you ladies and gentlemen I'm going to wrap this up. So any other questions? Otherwise I will draw this webinar to a close and it'll get posted. It'll get posted on YouTube within the next 24 hours. Okay. Well thanks very much for listening ladies and gentlemen until next Monday where you'll have the pleasure of Jasper's company. If you do want to direct any questions towards me you can always tweet me at mHusen underscore CMC. Otherwise I will speak to you all very soon and I hope you all have a successful trading day and a successful trading week.