 Okay, very good morning to everyone. It's the 3rd of August. Hope you all had a fantastic weekend a couple of things first for one On Friday, we've got the release of US non-farm payrolls and myself and the team will be covering that live an exclusive webinar Now normally we get nearly a thousand registrations for these events and they are capped at only 500 places Beauty of zoom of course that we can deliver this across the world So if you want to join us live, there's a link in the description to this video If you click on that you can register Alternatively, you can just go on my Twitter handle, which you can see here below my my face If you go to my pinned tweet, you'll see my macro menu, which is my kind of fundamental Review for the key themes. I'm looking at for the week ahead at the top there You can see a registration button there in red click on that and I'll take you through and you can submit your details So hopefully I'll see you in more detail and interaction and engagement on Friday for non-farm payrolls But let's get straight into it and let's talk about the week ahead. What have we got on the agenda and Yeah, the open fairly quiet a couple things definitely to talk about in this briefing for sure from Covid to central bank decisions to the outlook for the dollar For what's happening on Capitol Hill and US stimulus all the way to tick tock And earnings so there's lots to cover but first of all just having a look at the overall sentiments morning Equity index futures not too much going on here. The S&P's flat the NASDAQ backs upper touch Elsewhere gold in the futures and the spot very close around that $2,000 level So definitely that remains on the on the watch list for sure this week Can we really bust that level and break out to the upside? I'm sure we will find out either way in the coming sessions And then gonna have a look at the dollar as well and a little bit more detail Talked to Sam yesterday and we're talking about the dollar and he's got a pretty definitive outlook of what he thinks Just given how depressed the greenback has been hitting a two-year low That he thinks then given some of the technical ejections Which I'll walk you through on some of the charts that we could be in for a week of some renewed dollar strength Giving how depressed the price has been Otherwise in the crude market, we're gonna talk a little bit about OPEC Of course their their planned deal now has come into effect as of the 1st of August So that means now that the supply cuts are lesser onerous than that They were in the prior weeks gone by and then in the US 10 year pretty flat You have got a mammoth amount of supply to be announced by the US Treasury in order to kind of Supplement then this huge stimulus that they're offering to markets And that's going to be a noticeable thing for fixed income traders this week as well But let's get straight into it. I'm going to have a look at a couple of these FX charts I've just gone through and marked a couple up. I'm just going to remove my If I can my camera So there with me there you go So having a look at the euro this morning and so in the major pairs We are lower and the dollar is up about a quarter of a percent so sound definitely his call right to kick off the week and One of the main basis for his reasoning here has been going to cycle you through Euro Aussie and the pound starting off with the The euro obviously the euro has seen a phenomenal couple of Weeks this is looking at the breakout that we've had in the last two and a bit weeks Where we broke that trend line from the summer of 2018 Kind of coinciding with the ECB over delivery the European Coordinated effort with the recovery fund and we've seen the dollar weakness of course and so we broke out We've gone through 116 117 and 118 However, we have seen a bit of a pullback after getting rejected around those highs that was seen in around the late September time of 2018 So that's looking over the course of the last two years definitely a clear horizontal level of Resistance just coming into focus, but if we start to zoom out and look at the bigger picture This is now looking at the last You know kind of 11 years or so going back all the way to 2008 where we saw a double top going back here to April 2008 and July of 2008 and then retest in 2014 and to where we are Right at the moment. So there's that horizontal line of the 2018 high Which comes in around just short of the 119 handle But what Sam was looking at is the markets inability to close above what initially was a price that did momentarily move not only above that 2018 high but also Over this long-standing trend line and it failed to break it And so the rejection of that level from a long-term perspective definitely is very significant for sure elsewhere then looking at the Aussie it was another one. We wanted to have a look out on a longer time frame This was looking at a trend line as well going back to 2014 a retest at the beginning of 2018 and then last week's price activity and again, we Came up close proximity in Aussie dollar to the highs that were seen back at the very beginning of 2019 But that area also coinciding with that long-standing trend line getting hit to the tick pretty much before then turning back lower Certainly few things to have a look out for this week I'll discuss the RBA in a moment But certainly again a rejection of a key level which will be meaningful for the dollar and then finally looking at cable You know cables being on a tear of late having broken out above its 200 DMA and those previous highs that we saw in the middle of June and Having surmounted the 130 hand or last week we run up to around 132 Which was a clear level of resistance really year-to-date both in kind of late jam and also pre the pandemic set off that we had in March and we've just backed off since that price so You know definitely Some key rejections in the FX space and just given the Consistency of the dollar weakness a little bit of a bounce here following these technical moves I don't think could be too unsurprising And then just shifting over quickly to the precious metals space This is how a quick look at gold but before I look at gold I just wanted to have a look at silver because similarly a key technical rejection And around those support levels remember these were these upside levels that we had Kind of marked ahead of time just given how violently The silver rally had been in the previous two weeks or so and that was when we were watching it if you remember Breaking through 21, but we quickly went through 23 25 and then again pretty much to the tick to hit the 26th handle Symbolically but also that was that key area of support going back to you know beginning of 2011 And also the end of that year and the summer of 2012 really important level for silver And that also getting rejected court creating a decent dollar and a half pullback in the price As far as the yellow metal is concerned gold continues to remains elevated But we were kind of talking about this at the end of last week about how we've had these progressively more shallow pullbacks in gold which would be indicative then to a Breakout in either direction, but obviously meaningful to the upside is this 2000 level which you can see Has relatively held so far, but the pressure is building it would seem a Lot of people obviously still talking about gold very much so at the moment But then COVID globally is still getting worse Lots of uncertainties as well about the impact that that will have on the shape of the recovery going forward So definitely gold I would say only a matter of time even if we did see a bit of a breakdown like what we had in Towards around Thursday of last week when it we got rejected off that 2000 even if we did I would still see some pretty strong areas of support then for the market just to come back higher again So really here Would be a key area around 1975 and then lower down Just capturing some of this previous support levels that were seen back on the 29th and also the 30th Around 1950 type mark then to just follow the move back higher So whether the break comes here more near term or later I definitely think that that 2000 is going to go at some point and when it does obviously it could be quite a violent move Just giving some of the pent up demand for gold at the moment and the technical symbolic nature of a breach of those levels All right. Well, look plenty of headlines for me to talk over. So let's get straight to those and Start off with COVID situation Here we go. So this is looking at new confirmed cases of COVID-19 in the US UK, Australia, France and Spain. So these are a number of countries at the moment. They're kind of on my watch list If anything in the US US cases rose by just shy 60,000 at the weekend marking a 1.3 percent day-on-day increase that is in fact Less than the 1.6 percent average for the previous seven days according to Bloomberg and the John Hopkins University Viruses have also slowed in Japan and Germany But the the other areas that are capturing a lot of the headline news story at the moment is in mainland Europe Of course, it's been Spain, but also France have seen their numbers being picking up and then in Australia in a different continent They have come out and Australia's victorious state has tightened restrictions and declared a state of disaster After this outbreak showed no signs of abating three weeks after capital Melbourne was put under lockdown And in fact in Melbourne in the metropolitan area, they have now enforced a curfew limiting movement between 8 p.m And 5 a.m. And that that new restriction will be enforced for the period of the next six weeks So again that level as well in the Aussie that we were just looking at not only a technical level trend line getting rejected But also as well the deterioration that we're likely to see then on the economic Severity of the pandemic hit though Australia is going to go through you have some housing prices overnight Which deeply sharply the country's moved into deflation for the first time in 22 years. We saw last week And so if anything you're looking for a weaker Aussie dynamic at this point So any dollar recovery and the rejection that level Could be decent for for Aussie shorts The other country is the UK of course and this comes after There's been a couple of headlines that have come out over the weekend. The UK is looking apparently at all options at this point in time This has come after What Boris Johnson gave a speech at the end of last week We heard from the health secretary Matt Hancock about them basically putting the handbrake On the reopening of the final remnants of what was the COVID-19 lockdown instigated back in kind of late March early April and The type of things that they're looking at here It's a sunday telegraph article and a sunday times piece the telegraph talking about possible measures including the lockdown of the capital in itself if infection rates spike and quarantining Tightening quarantining rules for those flying into the UK. The Times wrote that there could be travel curbs in and out of the m25 Highway circling greater london and a ban on overnight stays so certainly The UK government kind of taking heed I guess from what is developing at the moment In mainland Europe, particularly with the attention in Spain last week And so they're kind of the three areas Generally that I'm looking at the UK ourselves Given the way that the numbers are panning out at the moment You would anticipate that numbers will move higher this week and in spain france and then elsewhere Australia is worth keeping an eye on as well Interesting thing that I saw actually the study was some FT data in regard to the UK A lot of people obviously had been talking about Leicester, which had it was one of the first Larger populous areas to have a more localized lockdown the government's still saying that that is the key way to kind of manage then The economies to still function not having a nationwide lockdown, but very important then that we start to Control what there's a difference between What they're deeming to be isolated kind of outbreaks or more community spreading Leicester would be like with Blackburn Bradford and Oldham Something more akin to community spreading, which is more of a progressive slow consistent steady incline of numbers With a more flatter shape whereas when you get some of the other areas Which we've had before which are isolated outbreaks and say an abattoir In the northwest where where cases have spiked but then given the fact that it gets locked down and controlled It doesn't spread to the rest of the community and comes immediately back down. It's the former. There's a real issue So you can expect then As what we've seen in the northwest of England Lots of these kind of more local authority lockdowns to take place going forward Um Moving on then other things I want to talk about in the equity market I haven't really talked stocks yet, but um jp Morgan came out with a note this morning See the risk of modest stock drop, but don't go defensive They're talking about the next couple of weeks Um, if economic data misses expectations, there could be a modest equity market correction Um, yeah, I mean that definitely could well be the case But I guess the underlying sentiment here is and I agree with is that this market is not going to go down Let's say 10 plus um at this point in time just given Um, what's in play both from a monetary policy and a fiscal perspective It's just hard to see this equity market sustaining A consistent move lower. So here again the key areas we'd be looking at. I'm just looking at the nasdaq Um chart here for the moment And you can see what a great level that we were respected on that trend bottom end of that trend line Which was that Uh resistance level that we had when we were initially pushing up at those all-time highs and then as that back at 10 292 seems a distant memory now because 11 000 obviously just above there is the The new all-time high and we're not far off there at the moment Again any pull back here. This is the 21 dma we have here in the blue line Then perhaps then 10 7 66 and a half It could be an interesting floor for price. You can see a couple times that that's been respected And and definitely worth watching this week about how we reacted around that 11 000 level once again Just going to quickly bring up the s and p as well The story there hasn't really changed a great deal despite the ebb and flow that we have been seeing of late And With the earning season now getting I'd say less interesting. I mean, let me just broaden this out a little bit renewed us China tensions still remain something to keep an eye on One of the things we've had is us officials have said that tiktok Under its chinese parent poses a national risk because of personal data than it handles Microsoft co said it could continue negotiations to acquire tiktok from bite dance That it aimed to reach a deal by middle of september The whole point here is that banning tiktok Some republicans have said would alienate many of its younger voters ahead of the important u.s Presidential election in november whilst also likely triggering a wave of legal challenges So that's kind of the latest of the u.s china Kind of trade spat playing out for the moment But you can see this area here really that's held so far and it's a really key point around that 3200 31 96 which has held the bottom end of that range of the price movement through much of the period of the month of july So as we start to edge up a little higher here We're just getting very close proximity to retesting up around the high that was seen on the 23rd So quite a key mark there 32 84 and a 3300 hand on the upside Any breach though of that july kind of floor with the next level of key area to keep an eye on is 31 19 being those lows that we had In the early part of july you can see here as well We have that Resistance point in early march and it's been another area of key in november and also december of last year as well so yeah, again Room for a pullback shore and some of these u.s equity markets, but still I would say a good flaw for price that should well mean that You know any significant weakness is to be bought into at this point I know that sounds like a quite frightening prospect giving everything that's going on Covid wise geopolitical wise But it's just the nature of the way markets are set up at the moment um Let me just have a quick look. Hopefully I was just sharing my charts there. Let me just Double check and quickly run you through again. So the nasdaq these were those levels in the nasdaq that I was just looking at here That was those levels at 11 000 And then when it comes to the s&p Uh, this is what I was looking at here if I wasn't sharing it just then So this is that area 31 96 and then that 31 19 is a key area on the downside of any pullbacks And then the upside key area resistance seen just above here The previous move high that we've had in the post pandemic recovery Which would take us back up to these levels that where we were trading right at the beginning of the year All right a few other stories just to wrap things up And i'm going to talk about the central banks just momentarily Um, we do have the bank of england happening this week I wouldn't actually be expecting a great deal here If you remember they boosted their asset purchase facility by 100 billion pounds at the last meeting So i'm expecting unanimous in terms of no policy decisions to be taken this time round They do have the reason their monetary policy report. So this is one of those Alternate meetings when they would have the full press conference as well They'd be talking about their projections, but it's unlikely they're going to call them Economic really projections at this point in time. It's more likely they'll refer to them as simply scenarios given how uncertain the covid situation is And its implication for the uk economy Couple of interesting bank comments i saw at the weekend city group said the bank of england could pave the way for negative territory In terms of interest rates by removing the guidance that the lower bound is close to but a little above zero at its decision Whereas hsbc. I thought came out with quite a Good pun They said that the boe could rely on the rhetoric of negative interest rates without actually having to do so the so-called maradona effect And i actually think that they've got a point It's almost one of those things where people talk about it enough It almost becomes self-fulfilling and do you get the actual policy response of taking such action already ahead of time before even doing it Meaning then that you never actually have to pull the trigger on such a move Um, certainly the markets do think that the boe will Go into either an expansion at the end of the year Of the asset purchase facility again and negative rates perhaps in the spring of next year So the interesting thing of course to see what and i'm sure the journalists will be in the q&a asking them about that that particular Policy option the other one is the rba Not expecting anything here either they meet on tuesday, so they have to keep their overnight cash rate in three year yield target unchanged This comes after a number of the things that they've already done so far Realistically are they going to have to do more? Well It's kind of a difficult one that they face now They've come to the lower bound and the governor's kind of ruled out the use of negative rates Which doesn't leave a great deal of options left on the table And at the moment the longer and tightened the victoria lockdown The more harder it's going to hit the rba's forecast And and their local economy so really the covet situation is is quite key at the moment In australia member melbourne the highly populous area in the state of victoria So that is going to have stark implications for them And so again questioning about them. How do they see that playing out? It's going to be what most people will be looking at but not actual definitive policy Changes are expected on the oil front oils are touched softer this morning Obviously it did bounce I'm just going to have a quick look technically There was a few things i was looking at on friday, which was if i look on a daily I've got it kind of zoomed in a bit more closer here This is looking at the last two months of price activity here And you got the 50 dma with the 10th of july low which was around 38 54 We came right down to that that kind of dual signals there for a bounce After we saw a bit of a breakdown of the Move through the 21 dma which came in what last thursday's session And a bit of a breakout from what had been an area of consolidation The very tight price activity around the 41 to 42 handle prior to that in the beginning of last week And so that's a definite key area there and in the near term you can see Market finding a bit of a flaw around that 20th of july area as well But overall crude perhaps a little soft not only are we tracking this global covid situation One thing we did have overnight was chinese occasion market manufacturing pmi and actually that came at a 52.8 Which was a continued increase on the previous readings the sector's third consecutive months of growth As the biggest jump since january of 2011 So these would all be positives you would think but the problem here Is that the rest of the world is suffering at the moment about this second phase of the corona virus So despite some of those positive signs coming out china the rest of the world is looking kind of fragile on the demand side On the flip side the other thing that you have here Is of course that opec and its allies last month agreed to start tapering their cut bats from 9.6 million Browse per day to 7.7 beginning on the 1st of august Now russia often a laggard in these previous opec plus deals as far as compliance is concerned And was almost fully compliant in main june However reports the weekend suggested that they had slightly increased its oil production in july ahead of the scheduled plan Which is slightly Disconcerting given how crucial that they are And their adherence to this deal in order to help support prices So at the moment you've got a slight relaxation of the stringent seal on the supply side with some demand Apprehension at the moment Which does provide a bit of an interesting situation for crude So for the moment I do feel like perhaps we'll be capped now On the upside by some of those higher areas that we have had of late, which is around That 42 type level So not getting up to the the 200 dma just yet So if i'm just looking at this chart here The kind of red line the dma with the load that we have in the second of march Can't see us getting above there anytime soon and in fact Probably around that previous high we printed around 42 36 would be an area of key resistance for for the week going forward Barring anything unexpected on the supply shock side U.S capital hill what's going on this is still definitely a thing to monitor for sure Um, the latest here that we have Is the white house chief of staff mark meadow said on sunday that the two sides are still far apart despite progress over the weekend Following the expiry of course of these emergency enhanced unemployment benefits The failure to reach a compromise by the end of last week has left more than 25 million people in america in the world's largest economy Grappling with sudden austerity after the expiration of those benefits worth around 600 dollars a week So definitely this needs to be kept an eye on the longer it goes without them striking a deal The more negative than the repercussion for markets in respect to the fact that It's going to have more negative connotations for its economic impacts on the recovery of the united states Um elsewhere earnings it's been a couple this morning HSBC have come out Um, their profits fell short of estimates europe's biggest lender Signaling worsening loan loss weighed down by the global pandemic The lender raised its estimate for 2020 loan losses to 8 billion Or to 8 to 13 billion So they're moving it up to 13 billion their adjusted pre-tax profit was 2.59 billion below the expected 2.94 billion you've also got sock gen losing streak With surprise one and a half billion loss The french bank taking large charges after a review of its global markets Division now from an earnings perspective if i just quickly jump to here from a us Point of view. I think u.s. Has kind of seen peak earnings so to speak Um, actually i haven't i didn't tweet the earnings estimates So let me just bring it up here and you'll see Earnings whispers is the best account to follow uh for tracking these these u.s. earnings But it's a very busy week for earnings in america However, it was kind of the crescendo of earning season was last thursday evening when we had that mega cap earnings um evening Now that's passed most of these Companies are much more small medium-sized market caps. So definitely important for the individual stock But for us as macro index-based futures traders This really isn't going to Shape then the potential or disrupt market direction In the likes of the nasdaq or s and p so earning season definitely takes a bit of a step back But in europe do be aware though. There are a number of Key earnings coming out. I think it's the lights. So bp is coming out this week A number of the big european banks. We've got sap out of germany as well So definitely uk and european earnings still to be kept half an arm pre-market wise Okay Payrolls we do have payrolls of course is friday So just be aware then from an economic data slate this week from the u.s We get the normal string of events ISM manufacturing non manufacturing adp All of these things of course will be important and then payrolls will be live covering that on friday Employers are likely to have added over one and a half million jobs to payrolls last month Or about a third of the prior months pace according to latest bloomberg survey of expectations The jobless rate is projected to drop by 0.6 percentage points to 10.5 Compared with a 2.2 point decline in june and still triple of course the pandemic Pre-pandemic level of three and a half percent. So overall we are expected to have created jobs But remember where's payrolls always that there's a reference period So this only goes up and to capture up into around the week to the 12th of july And actually most of the intended job losses that came due to the second wave situation In the likes of those sunbelt states in america Were captured in the last half of july. So actually how important is Payrolls while it's always creates a degree of Of drama in the intraday Trading environment in terms of volatility. However, actually it might be somewhat artificially More positive than perhaps then what is actual reality given it doesn't capture some of those More job losses that were squeezed into the back end of july So, yeah, it to be to be taken in context. I would say in that perspective for payrolls And then yeah, the week as a whole as I said then key data coming out of the us throughout the week You've also got us factory orders coming out on tuesday A couple of speakers today feds bullard and evans and you've got feds messed up on wednesday And the weekly jobless claims of course will be watched still quite closely just given the this like pickup that we've seen so again goes in contrast to payrolls payroll being backward looking and There were weekly jobless claims coming out week to week as we've seen then where the cutoff reference period is with payrolls Pretty much since that point jobless claims have been coming back up again All the more reason why payrolls fairly dated and backward looking in that respect And therefore might not have such a massive big impact on markets that was beyond the actual moment of its release All right, that is it spoken for quite a while obviously a lot of things to get through don't forget You can get this whole macro menu of everything. I've kind of discussed in more detail It's just on my twitter account Just go to the pin tweet and you can click on it and have a read in your own time That is it. Don't forget to of course to like and subscribe to the channel Of course, we really appreciate all your support As always and good luck for the week ahead. I'll see you same time tomorrow. Thanks very much