 Hello and welcome to the CMC markets non-farm perils webinar with myself David Madden, market analyst here at CMC markets Today's date is Friday the 5th of January 2018. The time has just gone 115 p.m We just we just be very shortly kicking off with the webinar itself as always I must leave the risk warning slides on the screen here for you guys and girls to have a read through It essentially states anything that's covered in this webinar is purely just my own personal opinion and comments I should not be taken as explicit trading our investment advice It's a common practice with all our all the other webinars that we hold here at CMC markets So I'll leave those up on screen You can have a quick read through those. It's all fairly straightforward It's all quite short and they will actually kick on properly with the webinar itself Just as as those slides are up on the screen I'll have a quick talk about what we've seen in financial markets in the past 24 hours Wall Street United States is a really kind of blazing the trail for the pull of sentiment on the global equities Another sterile finish in Wall Street last night strong finish in Asia overnight I've seen record highs and the funds you under today what's in decent gains in the eurozone as well too But the main fact the main focus of today's session, of course is going to be non-farm payrolls Which we shall come out in about 30 minutes For those of you who are unfamiliar with their platform We're about to to locate our Market calendar our economic calendar on the trading platform if you go to the market pulse tab click on that Fourth option down on the market pulse tab is The market calendar on the market calendar if you take a look here What we can see is that it gives a breakdown of all the economic indicators that are chewed out For the for the day and also gives a run a breakdown of what we expect What the action figure was what the forecast was what the previous was? I'm taking a look here scrolling down down to the non-farm payrolls figures. We can see here that we're expecting our report for the month of December a 190,000 jobs to being added to the US payroll and that compares with the previous Months reading of 220 a thousand. We're expecting the unemployment rate to hold steady at 4.1% And on top of that in terms of average earnings on a monthly month basis We're spending average earnings to check up by zero point three percent And that compares to the previous month's increase of zero point two percent and on the wages front on the year-on-year basis Average earnings are expected to hold steady at two point five percent and also looking Other better information there is the overall Work week hours, which we also expect to mean unchanged at thirty four point five hours now the the crucial the common mistake I see are the common kind of error I see a non-farm payrolls is The market focuses on the headline figure ever looking at are we going to be or are we going to disappoint the 190,000 figure and the market often has an agent reaction in one way But then digest the other information as I said the headline figure respecting is 190,000 jobs to be added on the payroll But last month's number of 220 a thousand that can be revised and so can the previous month be revised So we often as we can see it's been common enough to see a scenario whereby let's say for example The headline figure smashes expectations and the market moves a certain way that the dollar for example by rally The entry traders realized with a good that the report in its entirety They realize at the last the previous months or even the previous two months numbers have been revised lower unemployment we have ticked higher or the and or the average earnings may have Declined as well or are grew and a slur a slower pace than expected So my view is that all these figures should be taking it and it's in total in total entirety Sure, the market often has a has an initial knee jerk reaction to the headline figure, but don't forget about revisions and we also want to be hearing to about the various different economic it we also want to be hearing about things like the unemployment rate what is the unemployment rate doing and also what is the Average earnings and in my view average earnings are sorted are actually probably the really important figures here because the rate of the last number of years since the US economy has gone from recovery to getting momentum the rate at which In jobs have been created in the US is moving along quite steadily But in my view the rate at which wage growth is taking up is languishing It's a it's kind of no speed liking behind the rate at which new jobs are being created and If Americans aren't earning aren't seeing real pickups in their wages So they're unlikely to come out and spend as much even though economic indicators Which I come out in a second our United States have been fairly solid My view is that my view is that we you know We really would need to want to see the US economy a bit of a decent enough lift in wages Because if you're more money in your pocket, you're more likely to go out and spend Or at the very least you can or at the very least if you like if the US center bankers And got politicians want to see the US economy kind of tick up to the kind of like Move up a gear in terms of economic growth. That's what we want to see So my view is that keep on I offer for the earnings figures I will certainly go to through those and in fine detail when the numbers come out in about nine minutes time if you kind of recap on What has gone on in the United States over the past five or six weeks in terms of economic indicators if you cast your mind back to last month Not to say that or even sorry even yesterday rather go back to yesterday when we saw the ADP figures come out and also we had the job as claims figures come out With the yesterday the ADP figures come out they come out the only come out on a Wednesday But they come out on a Thursday because Monday was January 1st April they call the day so we think about yesterday at 115 They were expecting a reading of 190 to 90,000 that came in well above came into the 50,000 It's quite a decent beat and it's quite a strong number Also shortly after that we had the changes in the jobless rates the jobless rate was supposed to drop By seven thousand to two hundred forty thousand that actually ticked up a few thousand to two hundred fifty thousands overall It was still fairly decent numbers yesterday all the rest and that is collect set the tone for a positive figure from the from the From the job support today Now there's broadly speaking if you look at the kind of if you look at the charts over the long term They brought you moving the same light if ADP is gradually pushing higher and a job That's claimed is gradually pushing lower non for the non-form payrolls figures the unemployment rate and the headline Pairing figures usually move in the same direction. You can have some discrepancies for months a month But generally speaking they move in the same direction So bearing in mind last month we saw the ADP figure come in at a hundred ninety thousand where the actual jobless claims came in at two hundred and thirty six thousand so there was a fairly size of a gap between the two and And But broadly speaking they are moving the right direction US economy state that the US would need to be creating about two hundred thousand jobs per month You're gonna really ensure that the economy keeps growing at its current rate So anything in around the kind of 200,000 mark is deep to be respectable You want to be kind of worried if you can hit them say they kind of you know 160 150 140 and anything that's I say 220 is respectable They can say 240 250 operas is actually quite impressive But if you look at take if you kind of cast your mind back over the last few weeks I've taken a look back at some economic indicators. We've seen our United States In the last two weeks ISM manufacturing came at a 58 point to 58 point two Quite a strong reading there given that anything above 50 is a is a rate of It tells us the sector is in expansion and I can I so give it a 50 a point two This ever so slightly down from the previous rating to be a point seven the ISM non manufacturing was 57.4 Privacy down from sixty point one still look quite a higher reading even if it is expanding at a slow rate CPI in the US ticked up from two percent to two point two percent So that she above the fence current target, but also it is It is worth pointing out that the actual core CPI rate with strips out come a energy and quality price and food prices out of it Declined from one point eight percent to one point seven percent. So it is not going as rosy as as initially thought But still moving in the kind of right, you know, all nonetheless It's moving in the right direction and something that the Federal Reserve will will be happy about Retail sales from that is recently given a five point eight percent Previously are spashing well a decent increase and the previous rating four point eight four point nine percent And then we had it just before Christmas The the kind of the third quarter revision of US growth came in at three point two percent ever so slightly down from three point three percent So it is the US economy is broadly speaking move ticking along nicely If you look at solid numbers from the from the Philly Fed solid numbers from the durable goods And most recently that the pending home sales of the United States came in at a ten-year high and all the housing figures We're quite strong out in the United States Be a pending home be an ex new home sales or our existing home sales all out You know five multi-year highs of the US economy is doing quite well So we got about five minutes of the clock just before we actually before we actually wait for the For the numbers to come out as always It is the first webinar of mine that you've actually tuned into I'm happy that if you want to type in the chat in the chat box any markets you want to You want me to have a quick look at I like to do so once the numbers come out. I'll be looking through You know, let's see and the down the S&P look at a couple of dollar crosses. See how the price of gold has reacted but this is essentially This is essentially Happy to kind of be if you guys to just drop any of the other market for me to have a quick look at Okay, so when you say can you can you point to the figures so we can follow please? Well, well, unfortunately, I've just sifted through the economic calendar and actually gone through it myself, but If you go into the economic calendar and effectively scroll backwards and I should be sift through the actual figure So I just made a point of being kind of effectively going to be prepared As a point of being prepared for this webinar and actually kind of making you know I Jacked on my copy book of all the various numbers that I've all the major ones that have come out in the last few weeks But in the economic calendar Which I have which I have here up on the screen if you just want to scroll through that you can keep an eye out Obviously, you can keep an eye out for the importance. You know, obviously one The the trip of raid is obviously the most most important But this year is the least important and you can see here judging by the flag of which country the economic indicator is coming out of So take a quick look now we got about three minutes left on the clock Let's have a quick look at how the the European markets are as you mentioned the footsie has had a all-time high today if you look at this it's If it's been in Even though that the footsie 100 itself Was kind of struggling a bit over the summertime and it also had a bit of a sell-off as in other markets in November The fact that it's actually gonna have to hit a post a fresh record high today clearing north of 7,700 Pushing on today really just just getting an indication of just how policy the actual sentiment is What you can see here looking at the MACD histogram the MACD indicator the market is pushing higher here But we are see and we are seeing us like decline in positive momentum And this could be the sign that we could see that the market pull back of it or perhaps even slightly turn over on itself this was called This was called negative divergence when the market is pushing higher, but the rate of change Which the momentum indicator has actually ever saw studies declining. So what we're seeing here Is that essentially markets are going up which is which is obviously good and positive and bullish But the rate at which they were going up is actually declining So it could be an early indication that we could see a bit of a pullback in The footsie went up footsie 100 and if you do see a pullback in the footsie 100 We could be looking heading back down towards the recent loads in around consolidation here in around 7,640 or perhaps even down to 7,600 itself So we got one minute on the clock now. This is waiting for the numbers to come out I'll just make sure they open up the economic calendar to have everything loaded up Just waiting now They should populate now We got we got just under 20 seconds to go here or 19 seconds to go for the actual numbers itself Given that we're expecting on a 90,000 jobs to be created and the fact that the US economy has been in fairly well Recently, I suspect around 210 205 is my prediction on the headline figure itself on one to remain a 4.1 So the numbers have just come out now. Let's just wait for that. She populate on the screen 148,000 wow, that is a big miss and as they said earlier on that is actually some kind of 150 That's something I should be getting a bit worried about But on we notice there was an upgrade to the previous months number The previous most number was 228,000 and I was revived operas to 250 to 2,000 so decent revision On the previous most number unemployment steady steady eddy remained at 4.1% scrolling down here to the average earnings We can see here the average earnings on that can't be right It's seeing here I'm just want to double-check that that particular figure that seems a bit off to me And this figure hasn't been actually released yet on the terms of the overall work our weeks remain unchanged at 34.5% I'll just very quickly just look on my road to the screen and see what the actual See if the other details were In terms of the hourly hourly so the average earnings on a monthly basis and also on a yearly basis as I scroll down here now so on terms of the In terms of the average earnings on a year-on-year basis there means Unchanged at 2.5% meeting expectations in terms of the average earnings on a month-on-month basis They were expected to come in at 0.3% and they did come in as 0.3% in line with expectations As I said on plumb remain steady at 4.1% And it's quite a quite a decent miss in terms of the headline figure But we did manage to get a decent enough revision to the previous month's number as well so overall I Would say it's a kind of a mediocre sort of a middle-of-the-roll report It's good that earnings are continued are continued to continue to grow particularly on a kind of month-on-month basis And that's something that's something to be positive about But at the same time it was a bit of disappointment that the headline figure came in so so much off And especially when something in the kind of low hundreds You know the kind of 150,000 mark is something to be a bit concerned about all right Let's see now how the markets have reacted to this out of a quick look now and see how for example the dollar index has taken the move I'll say you volunteer the index Wow, you can see there's a quite a severe sell-off in the US dollar So this is the US dollar index we're seeing here as soon as they obviously sold that figure the one the figure Which came in well below the one hundred ninety thousand expectation That one the 148 figure came in we can clearly see that there's a fairly sizable sell-off in the US dollar But trade traders realized that the rest of the remainder of the port was actually reasonably positive We could see a bit of a turnaround This is potentially what I was talking about at the top of the weapon or what I was saying that that Traders often focus too much on the headline figure and then realizing about the remainder of the report is reasonably robust It's not anything to get really overexcited about But it's still earnings unemployment and the revision were all fairly positive So we could see a bit of a turnaround in the US dollar I'll have a quick look now So we obviously know that the dollar index as a whole as I've done quite badly on the back of that Let's see what we can potentially expect out of the you the euro versus the US dollar Naturally enough the euro as as as pushed higher on the back of this if you look at the wider trend On the euro versus the US dollar The euro yesterday got very very close to the September high and bearing in mind the September high if the September high at One which I believe is at 120 92 if that level gets taken out because we're currently at 120 77 If that level gets taken out we're going back to levels not since December 2014 So if you take if you go another say 20 pips higher from here on the euro dollar We're looking at you know about fresh three-year highs So I give an indication of how bullish traders are On the euro versus the US dollar take a look back to the out taking a look back to the hourly daily chart on the universe The US dollar we also saw quite a decent move higher from March up until September The correction of the euro versus the dollar market pushed but at the market has been pushing higher since then And this could be the day gave me a bit of software and expected headline number for the non-farm perils Which takes us north of the September high and printing a new new three-year high for the euro versus US dollar It's been a solid upper trend for that after months of buying on the dip has been a popular strategy for the euro dollar If we do see any signs of the market pushing Putting back we could find support in around here in around the kind of 120 region as we can see on a few occasions If I buy the support in the past only recently remove south of 120 We could even see some buying in around November high, which goes into play around 1961 or even down towards the 119 area Move to the upside on the euro versus the US dollar We could be there isn't really much to go on because it's we such a severe sell-off back in the end of 2014 So we saw some price consolidation in around here in around the one at 22 22 mark or then if that level is taken out The next potentially to watch out for would be the high from from late September of 125 69 We'll have a look now a cable and see how cable is getting on versus the US dollar I'll run through a few of the major markets If there's anyone out there who wants me to look at a market that I haven't covered or I've mentioned yet as I saw as so far feel free to type in the chat box and I'll happily have a look at it We'll have a look now on the hourly chart I suspect we're gonna see a decent upward move in the the pound versus the US dollar. So what we took out We took out the early morning high on the palm versus the dollar. We're not back at the high Back to Wednesday is high. I bearing on mind if you look at how how much of a positive run If the pound has had a versus the British versus the US dollar in the last few months It has quite a decent run So we're still very much in the upward trend that we've been in the high that we saw at the beginning of the week Was about a three and a half month high for the pound versus the US dollar We're still very much in that upward trend if you draw a trend line from the low to March last year to the lows of August We can see that fair enough. It was it was We did see some movements through it on several occasions in November, but we're still firmly above that trend line From the lows of March through to the lows of August 2017 So so while we're north of this trend line here I suspect we could see a continuation in the upper trajectory of the pound versus the dollar Let us watch out for the upside But it's gonna be September high of 136 59 and then north of that you be looking towards 137 And if you do see any kind of pullbacks, we could find support in around the kind of 135 region I need it if you pull back towards the trend line bearing in mind We may find at the market could move to stop the trend line, but push back higher again So be be careful where you place your buy orders and also we are stop your stop orders If you move to the downside, we could be looking at a support at 134 already been down to the trend line support It which comes into play in around 133 50 or 133 60 Have a look now The big one to watch out for a big move in the dollar versus the Canadian US dollar versus the Canadian dollar Quite a severe sell-off in the greenback. I'll have a quick look at the economic indicators Come out of Canada at the same time because it got overshadowed by the US down from payrolls If you can see here on the I have on Canada deal the employment change smashed expectations It came in just over 70 a thousand jobs Were created the oil plummet rate the oil plumber in Canada dropped from a 5.9 percent to 5.7 percent Which is quite a sizable which is quite a sizable quite a sizable jump and So we let's not take a look at the dollar versus the Canadian dollar was down quite a bit on the session on the back of that so it's kind of a Kind of a double loss for the greenback in that the headline figure from the United States base expectations and the Canadian numbers were very good So take a look now at the dollar card as we can see here Dollar card a quite a sizable sell-off on the back of that a 15 minute chart You can see just the magnitude of the client on the back of that Going back to a daily chart here now We can see that the market now has actually traded at its lowest level not seen since September So we're talking about about it over a three month low for the for the dollar versus the versus the Canadian dollar So if you keep moving south from here, what we could potentially see and if you look at the train has been pushing lower here If you look at the MACD histogram back indicator, we can see a sizable increase in negative momentum So the markets moving lower the selling pressure and the negative momentum is increasing too So momentum is with the bears on the dollar card Move to the downside We could be heading back down towards 123 and then if you take off that back down towards 122 or perhaps even as low as a September low of 121 and if you do happen to push higher on the dollar versus the card areas to potentially keep an eye out for first term The resistance 125 and then also potentially in at the 100 day moving average 125 93 Right, we'll be wrapping up the webinar now in a few minutes time I'll have a quick look at some of all the indices are reacted to this I'll also look to see how gold is reacted Like I said, it's any markets, but you want to have a look at feel free to shut them out so we saw a nice decline in the US dollar was often kind of a a Inbrew relationship between the dollar and the price of gold So the softness in the price of the US dollar made gold more attractive as we can see here We saw fairly deep saw a decent enough jump in the price of gold when those figures came out If you look at the price of gold Broadly speaking is if you can moving higher for the past 12 months Even though we did see a sell-off in November did manage to take out the October low here Ever since mid-December the gold market has been pushing higher It decides to be broke north of 1300 big psychological number and then easily cleared the October high of 1306 and only only this week only yesterday did we see a fresh three and a half month high for gold So as you can see here the gold market is quite strong The US US dollar has taken a bit of a bruising today So we could see an extension of this positive move that we've seen in the price of gold over the past few weeks And if you do continue on the software trend area to keep a mile forward with potentially in around here the 1334 Region we saw a lot of consolidation in around mid to date September And then if you go north of 1334 we could be looking back up towards the September high of 1358 But the gold market does manage to Have a bit of a put on a bit of a poll that we could see some fresh buyers enter the fold So we could find support in around here 1306 It's already after a support previously in the last few in the last few days And even we could see some buyers enter the fold in around the kind of psychologically important 1300 level I'll have a quick look now The foot to 100 sure so the instant reaction from the foot to 100 was actually one of actually a negative one To be fair it looks like the footsie was actually going through a bit of a profit taking a bit of a sell-off in advance the numbers anyways We have managed To the market has managed to pull back some of the declines that incurred in the last few hours in the last few minutes nonetheless The footsie continues to push higher here. The trend is clearly to the upside We've had a decent trend or upper trend for the last month We fresh record highs today that tells you all these know what the current sentiment as the old adage goes The trend is your friend until it comes to an end What I will say is this as the markets been pushing higher here We have seen a bit of a decline in positive momentum. So we may see a bit of a pullback We may even see a bit of a correction But nonetheless over the last few weeks, I suspect we could see continuation of the software trend Levels to watch out for to the upside will be case a 7800 big kind of psychological number markets like big numbers And if we do see any moves it down side We may find some support from yesterday's low in around the 7000 say around the kind of 7,670 meet mark or even down it as in around the 7,640 mark Brent crude sure I'm like a Brent crude now I look at the initial reaction first of all As you can see same same at gold because gold traded us dollars as a brain crew as the week is in the US Don't you US dollar propped up the price of a brain crude? But the crude oil market has been in a solid upward trend over the last six months We hit fresh kind of two and a half year highs only yesterday And as it's as I say with the footsie in a solid upward trend. We're at multi-year highs You know the trend is your friend until it comes to an end The kind of popular strategy of the last few months has been to buy on the dip ground just we have since a quite choppy trade I've seen some quite some choppy and aggressive Pullbacks in the price of Brent, but nonetheless the situation in Iran Freezing cold temperatures in parts of North America are all contributing into the kind of the valley We're seeing in the price of oil So if you do continue to push higher on Brent I suppose the next big really big level to watch out for will be the 70 bucks per barrel level And if you see can any move to the downside we could find support in around the 6726 from region or even down at 66 dollars a barrel But as I was saying the trend over the last hundred months for Brent has been very much to the upside I'll have a quick look now I see how the Dow futures and the SAP futures have fared on the back of that And then I should look to wrap the webinar because we're just a press approach in quarter to the hour now So the big picture for the United States has been a stellar run It seems kind of deja vu at the American indices are racking a fresh all-time high So the market is very much in an in an upward trend We're culturally at north of two thousand twenty five thousand on the Dow Jones I love looking on a short a short term chart to see how things are fared off As you can see here the instant reaction was quite negative But then afterwards we've seen a push higher in the price of the of the Dow Jones This could be what I was talking about at the top of the webinar whereby people saw the jobs well below expectations So they decide to take profit on the fantastic runs that they've had then they realize hold on wages are Wages are decent. There's a decent revision to the previous bus number. I don't want to remain the chain Remain unchanged. So maybe just maybe this this report is actually a bit better at the initial reactions warranted In terms of levels to watch out for in the Dow Jones Because we're kind of in in uncharted territory. I suppose six thousand twenty six thousand It's going to be the next big kind of psychological number to watch out for but we realistically, you know P traders are looking towards twenty five thousand two hundred three hundred so what and so forth In terms of areas to watch out for for potential To potentially buy into a market that falls back We did see that a consolidation in around the twenty five thousand one hundred mark or even south of that even though the twenty five thousand and fifty region I'll have a quick look now at the S&P 500 and they will look to wrap up the webinar itself Very similar in terms of the shape of the church Almost almost a negative 45 degree line pushing higher and higher and higher on a regular basis racking up fresh all-time highs We're set to reset to open set to create all-time highs on today's session I'll have a quick look now at the S&P and see what things have done very very similar to what we saw on the chart for the For the Dow Jones were by the initial reaction was quite negative And then afterwards the traders realized that other aspects of the report rushing quite positive So we've we've definitely come off the lows of the kind of post non-farm payroll reaction levels Ares to watch out for to the upside. We're currently trading at 2734 Traders like to look towards big figures. So 2740 50 60 so on and so forth we move if you do see any kind of pullbacks. We may find some support in around this area here 2730 or perhaps even down towards the lows of the past couple of sessions in around 2000 in around the 2720 mark So that's in terms of the actual markets that we've covered That's going to be it in terms of the markets that we've covered in today's trading session I just want to also want to point out on our trading platform What we do actually have throughout the day. We do very very different updates So in the inside section, which can be found under market policy Under inside section up and second option down We will we will have very different economic updates throughout the day And some of the articles that we write to get posted to insight and they'll be uploaded there throughout the trading session Also, there will be a video of this webinar available on insight later on Also, keep an eye out for the chart forum, which is the third option down on market pulse Seth and my colleagues will write a quick few hundred words or few other characters on a particular chart And we also going to map out what we think the in terms of it Point out the potential important levels to keep an eye out for that's updated on a daily basis And finally, just want to draw your attention to other webinars that we have in the pipeline. So In the same place where you found this webinar We'll be hosting as always the Monday market webinar at 12 15. I'll be hosting that on Monday coming it's turning at 12 15 GMT we'll be covering the major moves in the markets and also keep looking ahead to the week ahead So please feel free to sign up for that and on Monday evening at 1900 GMT 7 p.m. UK time There'll also be a webinar on the foundations of of technical analysis and as a person who got you is that he was Spent more and more time reading about technical analysis I need to get the qualification from the Society of technical analysts I would recommend reading up a text analysis and if you can tuning in to this webinar It is going to be quite useful and you particularly if you're interested in short-term trading Knowing and understanding charts is a crucial part of short-term trading Well, I do want to thank you for your patience. I hope you have a good good weekend I love I hope you your your next week's trading goes very well. Thank you very much Bye for now