 Okay, very good morning to everyone. I hope you all had a great weekend. It's Monday the 7th of October As per usual Monday look ahead for the week not just for the session ahead And as you can see you've got the full agenda to the side of me here If you would like access to this it is available on my Twitter account. You can see my my handle just below my image Gonna run through that then Sam's gonna come on as per usual. I've kind of taken off any of the Technical analysis on my charts so he can go at them fresh and again look at some of the the key levels both for the Intra day and for the kind of medium term for potential targets particularly equity markets, of course Having seen quite a roller coaster last week having sold off at the beginning of the week But then recovering and then obviously coming And closing on the high side following payrolls on Friday But first off before I get into the calendar and some of the news from the weekend Look at the charts from this morning. I'll see China Hong Kong closed a few other closures as well overnight in Asia Pacific region I think so relatively quiet and Leaning toward then the Dixie's pretty flat not much movement overall in the currency markets gold all T-notes Likewise for US index futures minor gap down But it's very moderate nothing too major and we're just sitting at above the pivot across all three major US Indices for the moment. I'll explain why there's been a slight negative reaction overnight markets It's to do with the latest China US trade talks which recommence later this week in Washington from Thursday The Dax actually as I'm just literally click the start button. It's just broken through The pivot level and the futures and the overnight Asia Pacific low points a bit of a run lower there in usual Dax fashion But in terms of the Overall kind of composition of the charts. I'd say it's relatively flat and slight negative from the overnight developments Getting straight into it then let's talk about the week ahead as I said, I'll talk about the fundamentals Sam will go on the charts but for the The morning rather than go through this by data Just want to jump straight into that main story that's causing a little bit of apprehension in the market And this is on Bloomberg came out overnight and it comes ahead as I said face-to-face talks the kind of senior Delegation from China is arriving in Washington. They're going to have talks on Thursday and Friday of this week Chinese officials are signaling that they are increasingly reluctant to agree to a broad trade deal Pursued by US President Donald Trump in meetings with US visitors to Beijing and Washington in recent weeks according to this report citing Unidentified sources and people close to the discussions Senior Chinese officials have indicated that the range of topics that they are willing to discuss has narrowed Considerably and so we continue to follow that, you know Ever since we had that targeted of the tech firms and the intellectual property stuff from from the US on China It really has switched quite dramatically and kind of the concession now coming of being fairly passive from China seems to have ended and Importantly and I think rightly so from a Chinese perspective Donald Trump is obviously facing these renewed calls and process and procedure behind a potential impeachment So if I was China, I definitely would follow the same tact I'd be going to these talks making noises that look I'm not going to make any type of concession at this point you're the one that needs to do that because statistically Trump although I see an impeachment as Incredibly unlikely The point being is that he's under a lot of pressure at the moment in media and just managing the kind of public perception About how he's dealing with a lot of other things and so it's a good time to press the president I feel if I was China saying so I don't find this particularly surprising And that I think is why I think that's a view shared At least at this point by the market I think that's why the the reaction effect overnight has been won But has been fairly small definitely would be more interested when the US come in And you start to see the volume is pick up to see how they respond So as we get to around 11 a.m. 11 30 a.m. Our time when the Americans start to come into their desk I'm interested to just see how the market reacts to this and the kind of classic movement would be a little bit of downside pressure for equities Perhaps a flight to quality support for the likes of gold and in US tenure Otherwise a quick run Back to the calendar and then we'll run through the the other headlines in terms of the actual session Today it is relatively quiet. There's nothing really major coming out we have Had German industrial orders Kind of fitting the narrative of late for the German economy minus zero point six percent against expected minus zero point three So a touch weaker, but no real Meaningful reaction. I wouldn't say the DAX reaction is to do with that data I mean it's come after that and the euros unfazed. I think that was just more technical You can see the DAX is already pulled back after that technical breach of the overnight Asia low So I think it's no more than that initial opening volatility The one thing you'll see on the calendar though here for Monday is that Prime Minister Boris Johnson plans to meet his Irish Counterpart this week. So let's go to the Brexit update. What is going on here? Brexit deal prospects fade as talks stall the EU signals pessimism So French president Macron and the Irish PM for adca both signaled that they want progress by Friday The reason Friday is because time is running out before that EU summit which happens next week on Thursday and Friday the 17th and 18th And that's when that following weekend I next weekend UK law would have it that was passed in Parliament a few weeks ago that Boris Johnson would then need to pen a Letter to Brussels to ask for an extension now this in itself has brought about a lot of Contradiction from the Prime Minister of course of which I'm sure you're fully aware of He wrote in the Sun newspaper on Sunday that will be packing our bags and walking out But then he's also said that they'll obey a law passed by Parliament Compelling the Premier to request a Brexit delay if he can't get an agreement by the 19th So again, all of this is political posturing at this point I'm sure there's going to be lots more to come as I've said before from a calendar point of view I think towards the end of the week you'll start seeing some more meaningful market impactful headlines to do with Brexit because of this These deadlines that Europe abound Bounding about about trying to get a deal done by the end of the week Boris Johnson himself has also Self-imposed deadline if you like on himself for the of the 11th, which of course is this Friday So I'd say there's some Brexit moves and sensitivity in the pound to come But I wouldn't really foresee that until the end of the week all of this of course Will probably lead to the biggest Brexit movement politically if any over the weekend and then it's going to really heat up a Few notches by the beginning of this time next week because then that runs in Directly in toward the kind of decision point of whether or not he's going to have to ask for that extension Whether or not a deal can be achieved or not So I think this morning as you can see from the charts the pound is Relatively disinterested by the developments politically over the weekend. I think that's right but I do think you've got to kind of play this from the The timelines that you are aware of of which is Friday and then the following week for that You summit and I'd expect then the type of movement and volatility and news flow to pick up around those Affirmation timelines Back to the calendar other things then moving on from Monday Because that's pretty much it from Monday. So there's no major kind of high-ranking European UK Or US data Tuesday a little bit different though this time tomorrow will be looking for the updates for the Chinese trade Balance situation obviously always important to kind of get a flavor for house significant the current economic Phase is playing out in China given the weakness that's been observed as the trade war has escalated The German industrial production obviously that we've just seen This morning what that was industrial orders industrial production tomorrow, excuse me And then you get a the beginning of quite a large sequence of Fed speakers You remember last week. I think there's about 11 Fed speeches. This comes of course as the market as this Significantly reprised the prospects about the outcome for the meeting at the end of this month on the 30th of October That now the base case is for a rate cut Well, you get feds Powell Evans and Kashkari all speaking on Tuesday now talking of Fed speakers one thing I wanted to mention was Overnight you've had two people speak. You've had number one, which is Rosengren One of the dissenters of course from the last two Fed meetings has been of the belief that we should not have cut rates on either occasion So one of the most hawkish members of the FOMC and feds Rosengren said see slower growth But bullish on the US consumer and of course we know that that's being the general setup for The US economy of late kind of things like activity Manufacturing production these types of things have all been weakening fairly consistently in some cases quite quite significantly as well, but The consumer has held up to a relative degree But if confidence starts waning if the job situation starts Deteriorating so a matter of time you would imagine that the consumer does start to be impacted But for the moment Rosengren talking up the hawkish side of things Feds George then messed or Esther George also followed and said sees no need to ease unless slow down deepens So I just thought it was quite interesting because what we've had over the recent weeks as you're Aware of is this distinct re-pricing about the timing of when the Fed are gonna cut. We always knew that they were gonna cut However given How bad things like the ISM data points manufacturing non manufacturing then ADP then on farms as well Has played out particularly that really non-existent wage growth that we had in the payrolls report on Friday and The probability now of a rate cut in October as you can see from this blue line has radically changed over recent weeks Particularly last it went from 40 this time last week to now up towards 80 percent So I what I thought was quite interesting was that given how severe this has been It almost feels like the Fed has deployed two of the most hawkish members in Rosengren and George just to temper back perhaps a little bit of the markets natural and what normally is the case over extension of It's just buying into data and kind of reacting or overreacting to the point of pricing it in so Aggressively it's interesting to see whether or not that makes any difference. Of course We've got these other Fed speakers not only is power speaking on Tuesday speaks again on Wednesday We also get the FMC minutes on Wednesday night And so you get another Rosengren cat plan cash carry back on the on the tape as well on Friday So all of this of course comes into just really Trying to align market Expectations and I definitely think that all in all It's likely to remain the case that an October height and height of cuts. Excuse me still remains priced into markets Now moving on then beyond Tuesday Wednesday FMC minutes as just mentioned Thursday The main data point here I'd say is the US inflation readings the other key component of course Behind what decisions the Fed are going to make don't forget. It's not It's not always although. There's no projections updated coming out in the October meeting Of course, all of these speeches will be looking to kind of just build in the idea of what are they going to do? beyond the October cup and this idea of the mid-cycle adjustment and then probably one of the main Macro forces that will drive markets this week is going to be on Thursday and Friday And as you can see that is the resumption of the talks in Washington between the US and China But if the press this morning is anything to go by and I still think of course This will remain the case that they're likely to make very limited if any type of Headway in regard to the trade negotiation again, I think it's going to be one of those where it's they continue to just have The door open to having more talks in future rather than anything concrete being said or in fact done that in itself then is Subjected disruption from the fact that the Chinese have been quite aggressive here almost indirectly through these Bloomberg sources meaning that Trump typically tends to respond to this in one way and that's he he rises to the challenge and the more that there's a Breakdown foreseen by the market in this and it hasn't been Uncommon for talks scheduled for the end of the week to be completely called off At the beck and wall of Trump just saying you know it's off as he tries to reassert his dominance on the negotiation That does happen Again, we go into that kind of renewed phase at the trade war cycle and you could see renewed risk off trade materialized quite quite quickly The other headline I just wanted to point out this morning HSBC shares actually not a massive move this morning But I know a couple of you guys do look at the footsie 100 So I thought I just point out this headline which is that HSBC according to the FT you're going to cut up to 10,000 jobs in order to slash costs Did hear them talking about it a little bit this morning? I'm not sure if I heard it right, but they're talking about cost savings if in excess of a billion pounds so obviously meaningful does follow on from the likes of Deutsche Bank cutting what was it 18,000 jobs a few months ago I think Barclays socked Jen. They've all done the same thousands of job cuts particularly for HSBC Targeting in Europe given the fact that you know, they've long been pivoting towards Asia Where they generate almost 80% of their pre-tax profit in the first half of the year comes out of Asia alone So increasingly more important and less or so for Europe and hence just this restructuring in order to save costs Is what's been being touted this morning their share price the initial open obviously might have fluctuated since I last looked Since the initial opening price, but they were down negative by about percent originally at the open That's it really from me I don't think I really need to really go on longer than what is necessary The one thing I would say is just as I'm wrapping things up Gold is just broken lower. I'm not sure if there's a headline that's come out just while I've been talking I've obviously had to squawk off golds just rock Fairly quickly in the last couple of minutes as equities have just picked up You can see that kind of false breaking to the downside for the DAX again Absolutely nothing news driven certainly not on the back of that German data earlier You can see that wick extension just on the run through the Asia pack break and now we're looking for the gap fill Looking reversed to some of the price movement from this morning Similarly the the Dixie just picking up a bit of traction now one-tenth It's a bit of downside pressure just coming in as well on Euro Dorian cable For the moment, but I guess that's a good opportunity now for me to hand you over to Sam And he can look at the charts and the technical levels of significance for the weekend. Thanks very much guys Yeah, good morning We'll have a quick look over That moving in gold shortly and as the dollar just decides to strengthen this morning And just having a look at the the charts from last week that we put on to the strategy report and luckily for me It makes my job a bit easier that everything certainly currency wise is pretty much contained within the same levels that it was On those longer term charts from last week and just to put that into picture now here with the euro You can see relatively small range. Obviously, that's nothing new and surprising for the euro But it was contained very much within the levels we had marked up to the top side We were looking here at the low the 24th and once twice just could not get above and looks like a great level too I've got short and the failed Push higher shall we say obviously pushing to the downside The beginning of last week only to recover but can't get quite above there now And I would obviously look to have a couple of trend lines on from the top it for any Potential bigger push to the upside later on but at the moment doesn't seem like that's going to be the case that The 24th holding price action and with the pound before we come back and look a bit more intraday on The the euro you can see kind of similar We did push higher, but then last week we just couldn't get back above what was the similar level that low the 24th so really key point for Currencies the lower the 24th on the pound and the Euro as well just looking here now on a 240 chart you can see from those last few loads of The days or whatever we're not far away from coming to test that lower part of that trend line Certainly something I would look to to have on there as this dollar is just strengthening a touch So that could well come into play and about 10 ticks or so So one for the pound certainly to have marked up there and looking even lower time frame 60 minutes just to Confirm that trend line. Let's just make it as Perfect as it needs to be there we go You can see if that was to break well then suddenly 123 lower Friday and Thursday could come in relatively quickly From that point of view to the upside as well Here we are, you know also getting squeezed in we pushed higher this morning only to be confirmed Another trend line from the top that we just could not get above So something has to happen here for the pound pivot and that trend line key resistance trend line to the downside Important for support euro as mentioned couldn't get back above one ten forty nine You can see the two fail tests there and with this dollar strength that we've seen We're coming back to what has been an important level We talked about in non-farms and also each briefing just around this zone here if you like one ten twenty Can't confirm a 60 minute break below So when we've been above it has acted as good support So here now a key level to keep a watch on and also where would the third test be of the last couple of days? I'm pretty much in that that level as well So both the euro and pound coming to key levels and certainly one third to keep an eye on with that dollar strength as and mentioned Gold there strengthening. I mean weakening sorry with the dollar strength key level. I would say to their to the downside Here looking at 1500 you've got yesterday's low Friday's large to say Thursday's in the mix there as well And also today's s1 Pretty important level and you can see just over the last two Full day trading session. So that's where I'd have marked up there for gold. Of course with moves like this Always worked has been a bit patient You know the volume is not really going to be there for gold for a massive move low about any retracement So I'll be keeping an eye on some of the support from Friday But of course, you know this morning as well. So you can also see Technically we broke this trend line and this is now looking five minutes But you can just see how well that was respected this morning one two three And you get the break so of course looking at a retest of that area for a level of Resistance with gold coming low with the dollar strengthening. We have to see in equities just push to the upsides I keep an eye of course literally where we're trading now a confirmed break maybe above here on the five minutes We've got a minute left of Eight where before 8 30 you could be you know start to talk about the potential for a gap close Obviously we get lower and this was a market where if we were looking right on the clothes of of Friday as a ball you'd be pretty happy to close back above You know albeit very very slightly back above 2945 was was pretty key So if we can get back above there Then I'm you know definitely a lot more confident about this market going high Of course a lot can happen in the day and the week and that gap feel just above where we're trading now will be Important if we can get back up to 49 29 49 50 and close above there for the day That would be a job well done for the bulls looking for the bears to take over and it'd be to bring in the pivots Again, you can already see those key levels to the upside You know I think you're anything if we may have a down day I would say you'd feel pretty pretty comfortable in In this market moving lover. I'd say to the downside 29 26 is a pretty key level before we get down to some more important zones Around 29 14 there would be two levels of interest that I would have marked up As well so stocks looking similar across the board So have a quick look over how the DAX has started Monday morning. You can see it's actually tried Try to get back above to fill that gap I'll be keeping an eye on the DAX if looking at US stocks as well The fact that we have just you know trying now to close above Where we open the week is pretty key. Of course the first retest of that gap. We're looking for potential So resistance there to come in quick look over at oil and you can see Private we came to try and test what was a key level following The move lower in the week We just couldn't confirm a break above and and that has been pretty important from a technical point of view So I'd still have it marked up here Although we did spike through just pretty much on these highs here Which were the low that we had back on the first of the month fifty three dollars and change to the upside would be a Level to be focusing on you can see just how steep we've come down as well So I've been looking for some potential trend lines, you know coming up from here only for that sort of Third or potential third test and that will be you know from this one anyway looking around the R1 Which is also then law for looking at the breakdown that we had on the second before that move lower So some interesting levels for oil also from the low that we had I'll be looking to have that trend line on can we get a third test of that and then that could obviously lead to a Decent break lower that also coming in at the moment Anyway on where is the current low of the day fifty two fifty eight for oil as well Of course as usual we'll we'll get some of these charts out around midday in the strategy for those that You know just follow Bitcoin. I'm sure you know this already But just having a look at this market and you can see following last week's Push lower we're now trading below eight thousand obviously it's open 24 hours But on the future is not so much and a big gap lower from 8207 8% wise You can see a 4.3 percent move to the downside obviously on that day on the 24 the important 24 15% lower See worth keeping an eye on there for those that do trade it just coming under a bit of pressure As well this this morning as usual any questions obviously, please do let us know the dollars strengthening a touch stocks looking for that gap Feel gold not far away from 1500 again It seems like a magnet at the moment while making that decision Other than that I guess it'd be a case of just being a bit patient You've seen the calendar already is as quite a quiet one big things to come Later this week. I hope you'll have a good trading date and a great week ahead