 Good morning and welcome to the Monday market update with me at David Madden today's date is Monday the 2nd of March 2020 and the time has just gone 1115 GMT and the volatility and The tune of the flowing and the financial markets continues Over the weekend we had some appalling figures as we've read with figures manufacturing numbers out of China over the weekend the efficient figures showed a Very sharp decline the they were actually the manufacturing figures and the matter and the manufacturing figures Excuse me were the lowest on record They're even below the loads of That were seen in 2000 nature in the financial crisis the non-manufacturing services. They were also In the same boat huge decline on the month well below expectations, but even below the levels recorded during The depths of the financial crisis. We also had the the Kaishin survey the private survey of Chinese manufacturing That also Tumbled lowest on record well below expectations major decline in the previous month So there were terrible figures out of out of China And the manufacturing front now and really just highlights the fact that if you have a effectively kind of a lockdown or major Lockdown in certain parts of the country the overall business community the overall manufacturing and services community Can be severely hit because of the the ramifications of supply chain issues And disruption caused by both lockdowns excuse me That being said we did see a push higher in stock markets in mainland China in Hong Kong and Japan because of the speculation about stimulus Some sort of stimulus packages announced from Central banks, you know this charter that the Fed reserve are going to cut races charter that the Bank of Japan are going to Are going to elucid monetary policy same with the Reserve Bank of Australia So all this sort of speculation that things are getting so bad Central banks must intervene on that chatter alone. We saw a push higher in Asian equity markets overnight and At the beginning of the European session today things are looking quite rosy. There was a decent rebound underway here in London, France, Germany and the likes but Things have changed the the FTSE 100 is Holding up into holding up in positive territory just about but it was further in the positive territory this morning The DAX is now on the red as is the the CAC over in France So, you know It really says a lot about a market for my disease is an equity markets off of Friday Friday's lows were extremely The loads of Friday were extremely low. So stocks are ready to be cheap the opened higher on Monday morning on hopes of a stimulus package from various different center banks But that rally didn't last long of stocks are ready to be cheap and the rally can't last long What does it tell you about actual sentiment? It shows you how nervous traders actually are When it comes to when it comes to the equity markets and with that it really just kind of underlines the fear that's still out there one particular industry. I'll show you now was the Travel sector the travel sector was badly hit At the back end all last week for fears that there's going to be a major kind of this halt in passengers traveling Around traveling around Europe. So you can see here that the likes of wizard to we travel International catalytic airlines Ryanair is yet kind of a Lufthansa air France all firmly in the red So the fact that some of these markets Endured brutal declines last week and then they're lower again In early early ish into Monday morning training really highlights the fear factor that is doing the rounds when it comes to this crisis What you're doing now as always is take a quick look at the major events of the week ahead Then I'll talk about some of the major markets. So looking ahead to tomorrow. We are fully your figures from Greg's We have the Reserve Bank of Australia interest rate decision on Tuesday as well The risk speculation we could have the Reserve Bank of Australia coding interest rates Australia economy it's closely tied in what's going on in China Which is sadly the epicenter of this health crisis. So keep an eye on the Australian dollar We have fourth quarter figures out from Target in the US on Tuesday on Wednesday We have the a raft of the final readings of services PMI reports for the major economies around the world the European Eurozone the UK And the US On Wednesday, we will have the interest in the trade station from the Bank of Canada Same goes for Bank of Canada in that, you know, they're You know, we may not be an entire shock if the Bank of Canada go down the interest rate cut route, you know They're their economy Is fairly heavily dependent on commodities such as oil oil taking a battle recently recently You know the interest rate in Canada has been held has been on hold for quite some time now Which is impressive when you considering how much there are southern neighbors cut rates by in the last say six or six or nine months So keep an eye on that fourth quarter figures on Wednesday from Abercrombie and Fitch on Thursday We have first-time figures from cure group here in the UK. We also have full-year numbers from ITV And we also have full-year numbers from Domino's Pizza And on Friday, we have us not from peril is the all-important Jobs number job support out of the US. In fact, we're actually hosting a live webinar event on the day in question So please feel free to sign up for that. You can sign up for it here on our website Cmcmarkets.com under insights. You'll find the webinars and events link You can sign up for it here. It begins at 1315 GMT. So please sign up for that Taking a look at what's going on on the markets starting off with the foots you and under us We can see here that it's been Obviously a brutal Weak or six days from the foots you under so the markets is all of us week losses Brutal session that was witnessed on Friday. We can see here that in today's session. We managed to push on higher Brief, well, we're still in positive territory, but we managed to head up towards the North of six thousand seven hundred and seventy mark, but we're gonna back Well off those highs. We're currently trading in around six thousand six hundred seven if you look to take out the lows of last Friday in around six thousand four hundred and fifty six that could take us back down towards 6,400 And of course if you break below that it could have a pointers in the direction of six thousand three hundred Now if you do have a snapback, we could be looking at and I'm running into resistance at the highs of today in around six thousand six six thousand seven hundred and seventy four and if you go beyond that You know, we could encounter resistance in around the six thousand eight hundred area Like I said, we're now taking a look at the the DAX over in Germany And like I said, it was trading higher at the beginning of the trading the European trading session It's now in the range. So what does it really say to you about sentiment if Stocks the market was very low Going into the beginning the trading session finishing up last week and then whatever rally we do have is very much short lived So we can see here that we're currently trading in around just north of eleven thousand eight hundred on the On the DAX if we look to kind of press and lower from here and take out the lows of today's trading session If you do press and lower from here, we take out in around six eleven thousand six hundred and seventy nine These would be the kind of out of hours hours. If you do press and lower from here We could be looking at targeting eleven thousand six hundred keep in mind We haven't been back at those levels since around August last year if you do you have a snapback? We couldn't counter resistance in around twelve thousand fix like a logic number And if you go beyond that we could be looking at towards the kind of the highs of today's session in around twelve thousand two hundred and eighteen Let's take a look at what's going on with the US market We can notice here the first of all on the From from Friday's candle on the in terms of the terms of the Dow Jones We can see here that there's quite a long wick in the candle which kind of denotes in Decision and then there's also kind of long wicks on today's Monday today's candle Monday's candle But obviously, you know, we're really kind of halfway through that particular block What's it denotes indecision? We can see here that index futures were firmly higher and at one point they were suggesting that the cash market was going to open North of twenty six thousand. We're now expecting The cash market open in around twenty five thousand for us so well off the highs of today's trading session So it seems that the Dow futures Like stock markets in Europe are Heading south if we do press on lower from here, we could be likely heading back back below twenty five thousand If you manage to kind of go below the lows of Friday in around twenty four thousand in around twenty four thousand Six hundred eighty there they're about that could point to further for the further losses I should that be the case, you know, there really isn't going to much ground in terms of potential support levels We could be likely heading back towards the lows of early June in around Twenty four thousand six hundred just north of it. And if you go beyond below that We could be like you heading back down towards the lows of January twenty nineteen in around the kind of rough area Twenty four thousand three hundred taking a look here at the S&P five hundred similar situation to the Dow Jones with a long wake on Friday's candle We've a long way to the upside on today's candle. So we would suggest denoting decision is what it does But as you can see here We were pointing to kind of open open in around Three thousand twenty three. We're now expecting the S&P 500 to open around twenty nine thousand and forty five So can we're well off the height of today's session so far if you do look to kind of move lower from here We could be like you're targeting twenty nine thousand and if you go below that we could be like you're targeting This is the lows of like glass last Friday in around twenty eight thousand and fifty four And if you go below that we could they be like you're heading it down towards this is out here levels last seen in early August and that's in around two thousand sorry two thousand eight hundred and eleven or twelve there they're about Now conversely what we've seen here is a decent move rebound to the upside in gold Now gold had a brutal day on Friday Gold traded at a major major decline on Friday and it would seem a bit odd You know gold is your client was it was deemed to be a low-risk asset It's it's often a classic asset that is popular in the flight to quality place So why did gold lose so much ground on Friday and especially in light of the weakness in the US daughter? Well, there's been talk that Traders to keep up to keep open their long equity positions regarding equity derivatives equity index futures Possibly incurring margin calls because of the heavy hefty declines incurred in global stock markets It's it's speculated that those traders were liquidating their long equity positions in gold as a way of freeing up cash With that we did see a 30-size to move to the downside in gold on Friday But we've actually managed to get a shake that off notice how nicely the gold market round out of this blue line here The 50 movie average which actually nicely support and then before Moving off the lows of it That comes into play in around 15 67 So why we hold above that line there this 50 movie average We could see for the gains to be made on the gold market So if we press on higher from here, we could be like you're targeting this is old here in around 1640 1649 that kind of area and if you go beyond that we could then be looking at retesting the highs of Early sorry late February in around. We'll just shy of 1690 Sicking with the commodities theme. Let's take a look at Brent all mark Brent oil, but there's also a talk about OPEC looking to cut production as a way of kind of stemming the decline in the in the in oil prices now obviously You know curtailing supply is one way to actually pop up Stabilize all markets, but keep in mind You know, you can probably be more confident of a rally or a move higher in oil If it's a genuine belief that demand is going to increase sure supplies one way to it can attempt things off But it's sort of my view kind of like an artificial way of doing it, you know You'd be much more confident that The oil market is going to push higher and have a sustained rally if you genuinely if you receive evidence that demand for the commodity in question was going to increase rather than OPEC turning off the taps as they do But nonetheless, it has worked that the oil market has popped higher We can see here that that on brain crude markets in around $50 and 80 cents a barrel if you could essentially maintain above the lows of today's session We could look at heading back up towards the kind of the 52 region And then if you go beyond that we could then look potentially head towards the kind of the 56 zone, but Keep in mind, you know a few There's a if if genuine fears are that bad that the man is really going to dry up We could see the market turn over on itself again despite that all the good of the speculation talk That OPEC could look to to cut to curtail demand curtail supply rather should that be the case If the market does manage to turn over on itself yet again, we could be like you heading back down towards 48 bucks a barrel That's Brent. I'll take a look at WTI. It's a fairly similar situation on that Once again, we were right The market is It's off the the highest session, but it's still but it's still in positive territory We can see here at the market is has Is it's going to firmly off the lows of the day's trading session and if we can remain off the lows We could be looking at kind of rebounding up towards the kind of the 48 zone And then if you go beyond that, like, you know, that's kind of psychological important 50 bucks a barrel would then come into play But you know, like I said, there's also possibility that the market could turn over on itself And should that be the case should we kind of take up the lows After day, it should be turn lower again We could be looking heading back down towards this zone here down around 41 spots 74 Let's take a look at what's going on with the euro versus the US dollar Now the US dollar index is at a pretty rough ride the last few sessions It did a lot of increased speculation at the Federal Reserve are going to Are going to look to hike. Sorry hike caught interest rates caught interest rates in line of what's going on With the health crisis. So take a look here at your dollar zero has benefited nicely for the last few sessions It's driving higher. We can see there's a steady increase in positive momentum looking at the MACD indicator the MACD histogram We're pretty much on this red line here the Trinity movie average So if we look to kind of press on higher beyond that metric We could be looking at targeting this zone here the highs of mid-January in around a one spot 11 72 And if you go beyond that, we could be looking headed towards one spot 12 On the flip side if you do have a fairly decent break lower And we head back below a fifth removing average this blue line here in a one spot 10 26 If you have a decent move below that it could take us back down towards the one spot Oh nine region down here, and if you go beyond that we go below that we could be looking at retesting the lows of late February And lastly I take a look at the the British pound versus US dollar Now it says a lot doesn't it that the pound dollars in the red on a day when the dollar index is down considerably And even still we can see at sturdy lefts quite a bit of ground on Friday despite and Thursday despite the fact that US dollar has been losing ground the last few sessions This comes out to the kind of uncertainty that the UK negotiating team might walk away from negotiations with Brussels in relation to the Transition period deal if they feel that if the if the West if they feel That Brussels will not give them a reasonable deal. They're willing to walk away It seems to be a negotiating tactic, but nonetheless, it has had a quite a negative impact on the British pound So if you press and lower from here, we could be looking at retesting the 200 a moving average this red line here and at one spot 2696 and a move below that could take us down towards 126 if you manage to have a pop higher in a pound dollar we could be like you're targeting this blue line here the 50 moving average Notice how it acted nicely of resistance in mid-February So if a metric has been important in the past it makes it more likely it'll be important in the future Although there are no guarantees, so we could encounter resistance in at one spot 30 17 Now I do appreciate your time. Thank you for listening to this video Please tune in tune in next week. Have a good trading week and good luck