 Okay, very good afternoon if you are just joining us I am just now doing a couple of sound checks before I'll do a briefing for NFP. Obviously coming out momentarily, so hope everyone's had a good day so far Looking forward to this one should be definitely interesting and market-moving To what extent we're gonna find out shortly, so I'm just getting out a couple of screens For the moment and then we'll look to kick things off. But yeah, hope everyone's doing well and had a good week Okay, yeah, I'm just kind of on-boarding people at the minute Let's get everyone in and I'm gonna make sure I can see all the chat and everything so If there's anything that you guys ask me as questions over the next 45 minutes an hour or so Absolutely happy to help so again just setting up a few things at the minute Okay, cool, so Okay, we're gonna start the four more rundown in one minute's time Yeah, it's just a just a slight marginal uptick in oil prices here just before we get stuck into payrolls If I put this on a one minute, you can see that shoulder reaction Just a little pop-up in price about 15 cents Just had some news break OPEC plus meeting to go ahead today. No deal yet in sight according to a delegate if no new OPEC deal then output remains Unchanged and obviously just given a lot of the headlines pertaining to an increase But of a slightly more moderate size than what the markets are expecting that lift prices yesterday Not even committing to the 400k certainly is enough to bump prices high if that does materialize and we're waiting for that meeting to kick off In just around an hour's time or so so bit of upside in oil actually just being observed here But just having a quick check who we got Owen Tammy from South Africa amazing great David in Canada. How's it going? Yeah, amazing to have so many people around the world tune in Feel privileged So yeah, I hope everyone's good Yeah, James there probably is going to be a slight delay on on the feed So it won't be real time real time, but I will be relaying it at that point But then the YouTube and will be re-sharing and distributing the broadcast obviously All right. Well, I think we're all ready to go So let's get to it I'm gonna run through a bit of a preview first Just get into context what it is that we're looking out for today I've got the chaps new squawk Who are going to release the news as it comes out and of course we can listen in live And I'll be here to kind of give you a bit of an idea of why it's reacting in the way that it does And hopefully I can guide you through any subsequent volatility as to the ration out, but let's kick things off And let's start with a bit of perspective and so this is then the recent run of US non-farm payroll readings and in particular Kind of drawing your attention to the last two readings 599 and sub 300k and these were both on the prior occasions disappointments and just at a very top level I've just been reading some of the the general bank commentary on the street Looking at what the general primary dealers kind of range of estimates for the headline change in payrolls is I Can't help but feel like we've been here two months in a row where everyone's kind of much more favoring on the balance and upside Surprise and if you'll remember that definitely was the figure We were looking for back two months ago when we had that expectation of around 960 People were talking up 1.5 million and it came out at 266 at the time so the market definitely from a Positional point of view is highly susceptible to another downside surprise That would probably be one of the nicest scenarios to see in order to see potential quite nice trading opportunity And that being then is that a lot of people for right reasons and we'll discuss them in a moment are anticipating the job market to have picked up bottom line is further administering of vaccinations allowing further state level reopenings and There's some nuance to the types of jobs, but generally speaking We should see some positive job numbers here on out Particularly if we start to lose out or start to fade out some of the stimulus checks and things like that Which I could have been culprits for why people weren't coming back to work in the previous instances So let's have a look at things and then we'll talk about charts and reactions in a moment So today's bigger we'll look at the numbers in a moment But the idea being that payrolls remains roughly around Seven and a half million short of closing the gap of the volume of jobs that were lost during the initial onset of the pandemic and For context obviously what we are trading in asset prices day-to-day is Our understanding about future monetary policy adopted and implemented by the Federal Reserve the US Central Bank and so There has been quite a growing Divergence within the Federal Open Market Committee where albeit the hawkish-minded members They've been really upping the ante on some of that hawkish rhetoric. We had Kaplan most recently We've had other members saying very similar talking about this idea that Policy should tighten quicker rather than the current kind of Fed projections Powell The New York President Williams, they've been much more of the idea of this kind of gradual cautious approach and generally speaking then That is the official Party line so to speak that of which what Powell says and so here then lies a kind of interesting juncture for this economic data because The weakness of the jobs data has really given Powell ammunition to remain fairly conservative with this more optimistic outlook being issued by the Hawks and So if this number was to be particularly strong and we'll look at the ranges But the top end of the range is just over a million. So if we start seeing prints that say 1.2 1.5 which would be a massive upside surprise In line with decreases more than aggressively than expected in things like unemployment rates Well, then perhaps we get quite a Severe recalculation by the market as to well Powell's gonna have to change sooner than we thought in terms of aligning himself a little bit more on the hawkish side of things Policy is going to tighten in the future. We are going to taper We are going to height rates the idea being is when and what does that timeline look like and this data Certainly carries a propensity to move the needle a little bit on the timings Remember tapering is the first in this policy sequence that we're looking for and that's not expected to really start kicking off until The Jackson Hole symposium at the end of August to be formalized in the September new dot plots And so forth and projections to then commence then tapering probably in the beginning of 2022 But that doesn't mean in the intraday environment an upside number We'll get people thinking of those dominoes are gonna happen. They're gonna fall faster. And so what would that look like? Given equity markets are at record levels and the likes of the Nasdaq has been seeing some really stretch moves of late and The S&P's traded an all-time high obviously just this morning So they are a little bit susceptible to big upside numbers for a bit of a pullback on that initial tightening apprehension now that doesn't mean that You know, that's the end of the equity appreciation But a pullback intraday would probably be the more likely thing to see an initial reaction Firm a dollar currency pairs have been weakening There is a growing divergence Fundamentally obviously about the situation that the US and the Fed are at Comparative to what we're seeing in Europe, which is much more of a dovish disposition against the ever-increasing Haukishness of the Fed and that has been exerting downside pressure at the moment And the euro has continued that downward trend as to as cable at them at the strength of the dollar Which through June had its best month in several months So this is the kind of overall thinking a few other things to have a look at then a number of factors have really impeded most believe of why this jobs market data has been a bit lackluster of late and They include everything from enhanced unemployment benefits So people who are just not willing to take a minimum wage job where the unemployment benefits are better for them At least at that point in time ongoing childcare responsibilities So that impedes people's ability to go back to work and then healthcare concerns Again, just because we reopen that doesn't necessarily mean that every single individual were to turn to normal behavioral patterns given the fact that there's probably going to be some Behavioral scarring from what the pandemic has taught us as a society and not everyone's going to Adapt and just continue life as it was in the past So there's a little bit of that also playing into retirement rates have been increasing Stop market valuations are helping pump up pensions and if you're near that age Well, then why not just call it a day? And so there's quite a few different things to contemplate that should in the end Decrease as restraints and see the job data move higher. Hence the reason why people are generally looking for an upside figure Job openings are not a problem at the moment as far as the US concerned job openings at the present point in time are very high It's filling these jobs, which has been slightly problematic and when we're looking at the actual breakdown of the labor report we can obviously break it down into its components of actual job sectors and Leisure and hospitality is being the real area that's experienced the most meaningful job creation of late This of course comes because those type of activities that are non-office based Public-facing human-to-human interaction. They're the ones that were heavily impacted by the severity of the lockdowns But remember we're going through a period now when two weeks ago, New York, California We've reopened now for business and a lot of that nearly every measure is being dropped And so given the fact that even though there's some emergence of the Delta variant Hospitalizations deaths remain low Obviously a positive thing that's allowing these these areas to reopen in hospital leisure and hospitality Should continue to be the biggest benefactors of that More hiring at restaurants bars Entertainment venues could well starts have emerged even in this month gearing up for what we're looking out for now Which is that reopening remember that happened two weeks ago or so? There's a few other things Goldman Sachs mentioned a few other good points So to share they said the arrival of youth summer labor market force Remember just given the seasonal period of where we are in the year at the moment That could also be a benefit a benefit to this data report and then obviously the wind down federal unemployment top-ups That has been a considerable labor supply constraint, which now should start to Fade out as time goes on as people now and have a necessity to go back to work It's not optional anymore getting the government kind of handouts in that respect a few other things we look at obviously going into this from a fundamental perspective and that is well What does it look like from the job components? We've seen that would give us a precursor a forward-looking insight as to how this labor report might perform And to be honest, it's been a little bit mixed. So on the ISM PMI numbers The service figure the employment section of that Survey dipped to fifty five point three after hitting a three-week peak a three-year peak in the previous Reading the manufacturing side the employment sub-index dipped into contraction territory actually below fifty So if anything these would be more moderations if anything However, on the flip side on the four-week average for jobless claims They've gone below 400k for the first time since the pandemic and then we had ADP of course, which was strong Just short of a million. This off this often gets the greatest weighted proportional impact for people's estimations Given that there's a very far wide reaching survey To give you some heads up as to how the the labor department's report might look like and that number hints At a stronger number today if that correlated kind of effect is going to read it read through Yeah, so that's kind of overview. So let's have a look at the data then we'll look at the charts While i'm doing this on my own at the minute the team are online. There's a few other guys. So Shout out to alex who's with york university I've just been with credit suice emia division this morning So hi to you guys There's our summer analysts as well going through this and then there's obviously our mainstay community as well both amplify live As well. So hope everyone's doing well but yeah, just they'll they'll take care of the The the questions in in the chat and i'll pick them up as and when i can after the release but looking at the numbers it's important to think about the framework of a the inputs and if you remember a few Probably years ago The average hourly earnings was kind of where the main focal point of interest of what would what would dictate the type of price fraction we'd likely see but The kind of focus has shifted and now definitely it's on just the headline changing on farm payrolls first and foremost and if you think about that kind of Reaction function It's obviously a lot of automated systems that hit the initial release So always advisable to stay out of that initial explosive pop Which is often a function of the illiquidity in the market because no one's going to want an open position Going into the release And so that is going to be defined on the first in the first output Which is typically the headline reading that will create the spike On that basis then it's expected at 700 k The range on the low three seven six So i talked about the market potentially vulnerable To a downside surprise given the markets leaning to a positive outcome for today's report Downside surprise i'd be saying anything in the 250 region Anything anything south of there? I would look for yields to decline T-notes to break through the weekly high gold to catch a bid and gold already is backed off its initial highs But i'd look for weakness in the dollar to propel those markets higher And that's going to support the major currency pairs and euro dollar in cable If we start looking at the top end of the expectations, then it's going to be very different in that respect All right, we've only got a short amount of time now. So i'm going to turn the scorecon And i'll flip over to the charts. I've not not not had a great deal of time to look at the technicals, but I will make the charts bigger As I look at different products 10 seconds Okay, i'm handing you over to the Scorecos now you're here to release come out five seconds eight five zeros eight five zero for the headline both expected of 700 Unemployment five spot nine both expected five spot seven the prior that was revised higher to five eight three The earnings month the month zero spot three below expected zero spot four young year three spot six below expected three spot seven Work week hours 34 spot seven below expected 34 spot nine labor force participation at about 61 spot six matching the prior Private now is 662 above expected 600 manufacturing 15 but expected 28 Governments that rise to 188 performance 67 the trade data that was a deficit of 71 spot 2 billion against expected 71 spot 4 canadian trade a deficit of one spot 39 billion gets expected surplus of zero spot Okay, i'm going to turn those guys off So the headline number to iterate eight hundred and fifty thousand above the expected 700 the unemployment rate They did tick up to five spot nine percent against expected 5.7 Average hourly earnings a point one miss on both the month the month and the year on year with the participation rate As per the previous of 61.6 percent So interesting moves here and something to be a bit careful of because initially you can see the us 10 year here Popped lower you saw a similar type of move with gold popped lower And it's had a bit of a retracement of that move So the initial first reaction of course was on the headline print But the unemployment rate was higher than expected 5.9 Which is at the top end of the analyst range So you've got a positive headline, but a negative unemployment rate So that's why you've probably had a bit of a pullback on those initial moves in the yield space Currency is a bit indecisive initially popping lower in the euro currency only lend to fate that move very quickly on the mixed data Equities on the other hand equities kind of like it and I get that You've got pretty much on the initial glance here a positive development, which is jobs are picking up They're not spectacularly strong where it's going to really Shift the feds timing, but it's a positive healthy improvement in the job situation The unemployment as well restricts the hawks really of having evidence to really support being more aggressive So for me, this is quite a perfect cocktail for positive equity reaction And that to me explains why equities are liking this at the minute s&p session highs We're now back in firmer positive territory. The nasdaq has just also printed fresh highs as well So let me just quickly get that up And we can take a look so here Put this on the daily chart all-time highs now in the nasdaq So this is looking on a daily continuation We're just breaking above that double top of the last prior two-day sessions. So yeah, as I said, it's a good situation It's a healthy improvement in jobs is my initial assessment But it's not good enough where it's going to alter the perception of the center ground at the fed, which is the most important And so people like pal There's not going to be phased to change his mind and become more hawkish on the back of evidence of what he's just seen particularly as well with the unemployment rate that further Gives him reason to hold off and continue the line and not become more hawkish So for anything it's a sigh of relief for the market Which now look yields are now moving lower 10-year session high equity And bonds rallying plays and in fits with what i'm trying to describe So it isn't going to alter there was fears going into this that it was going to be a blockbuster print It's going to change the shape of what markets think on fed timing to me on the initial glance This report does not do that doesn't achieve that magnitude Of positivity. So look the us 10 years breaking higher And if you actually look now full reversals across the board on that initial spike Dollar now weakening the Dixie has broken out of its range Of the last 24 hours so you're getting a meaningful response now here in euro dollar Euro dollars just coming up just testing up at quite a key technical Short-term level of respect So you can see here those previous lows highs from the overnight apex session Just finding a bit of resistance there now in the euro at that level So yeah nice response here in the dollar lifting those pairs cable the same So if you're looking at if you're an FX trader, we're back at pivot Just went through the early late asia early european open high So the pivot there just above And then just above the pivot you've got those previous lows that were seen back on the 21st It's a bit of a congestion of resistance levels just above their in cable And yeah gold exactly back to where we were so Really tough Instrument to trade gold on us on releases like this you can get easily chopped up But at the moment. Yeah now there's another move lower there in the dollar and just saw euro dollar and kick on So gold here keep an eye on those highs You've got the range high going back to on the 25th So gold could have another retest up here on on the upside and full retracement because the dollar is still weakening Euro you can see You see that extension of that initial price spike and the dollar had another flush And that just helps them the technical catalyst on that break add another 10 pips on that move to run up to pivot there In the euro currency Equities still rallying. So again, nothing's changed. It's just the other asset classes equities with the real Bellwether there that really led to that time arbitrage to maybe get in some of that turnaround in the currency space And there you go. Look gold follows suit. So for me the fx market was a good pre-warning flag for that gold long position there because you could see that it was gaining momentum on the upside reversal And now not only is it broken that high it's broken the high on the 25th And we're having a run up now to highs not seen since going back to the 23rd And so r2 with that level you might see some short-term profit taking here on this on this further extension of gold But you see how equities went then the currencies went Yields followed suit and then gold was the aftermath pop that you saw then on that last technical breach And you can see here Short-term fast money traders just booking profits there on that nearest clearest point of technical resistance Up and around those prior highs that were seen on 23rd So yeah, nice nice price action actually playing out here It's starting to see a little bit of reprieve now on that move So with that gold what would make me lack conviction now of extensions in your own gold is if you look at the 10 year 10 year rally's over Down up back to where we were and now we're starting to see the other currency pairs follow suit Finding a bit of technical resistance around these levels and some of that momentum upside Just fading gives me lesser conviction then for gold to just power on up again And you can see it's starting to fade a little bit So this is where the cross asset correlations are quite key for timing Remember equities was a trigger and the equity bid is also abating now, which again means I don't know if you're in longs in euro or gold if you haven't exited then you probably missed your most optimal point Now the equities have started to back off so Yeah, nice nice price action oil as you would anticipate not interested in payrolls It certainly doesn't change the game in terms of the demand supply equation on the former In regards to the US economy and Fed policy on that side and context is key Remember there's OPEC happening and it's happening right now. So oil traders are looking at a different thing right now All right Any questions at all? Well, while I'm on hopefully that all made made sense. It seems Fairly clear to me the types of reactions that we were seeing but obviously happy to To help and explain things just having a quick look at the DAX in German equities here Just finding a bit of resistance around the the highs This is kind of the price pattern. I've been tracking in the DAX the last couple of sessions So you've got that rising trend line going back to low on the 21st. It's been holding nicely in play Pivot short-term nice support this morning on the bounce and then you're just finding some resistance here European equities appreciating in sympathy with the appreciation of the US indices But here you've got that previous high that was seen yesterday morning Which has been a significant inflection resistance area I should say for for the DAX and you've got the R1 sitting just above as well So yeah a bit of a tough time there at the minute to try and push on Certainly not as pronounced as the equities reaction in the state side But yeah, look the currencies are backed off And reason for you know for good booking on those initial fast money moves T-notes back where they were and golds back where they were net net for me After this down up type price reaction across assets. This does not change What the Fed are going to do so ultimately there's no reason really to alter too much materially Exing out the volatility of the last 10 minutes from where we were before you know if you were a um a trader Not intraday, and you are more a fund manager This this does not information change your game plan. I would say looking at it from different duration or market participant point of view Yeah, next up if you are going to be trading obviously keep an eye out for the cash open on the nizy in 50 minutes time 230 london You know with payrolls. It's often one of those where we've kind of had the initial wave People will chew over the bones and have a think and try to rationalize what they've had and where they want to take this market and sometimes The general pick up and volume from the open that we get subsequently on the nizy Might help give that a bit more of a direction Okay, any questions at all while i'm here far away. Um, I think the team Can message me if there's anything that comes in on LinkedIn or facebook. I can see youtube at the moment so Alex How's it going to be reflective when the us open? um Yeah, I mean i'd be looking at this as generally a supportive story for equities We are already quite high in us indices like the nazdak or s&p and that is a consideration But let's have a look technically so thinking of in an hour's time at the open So you've got the previous on the weekly price pattern in the nazdak You've got the all-time high that was printed midweek and then also yesterday and obviously payrolls has helped us power above that So now generally speaking i'd be looking at that as a kind of near-term price area of support So even if we got a pullback, I wouldn't feel particularly comfortable of entering the market around here That opportunity has passed Strategically if the market came back down then Wouldn't mind then the idea the equities remain supported And whether they print new highs or not it comes back down and looking to reassert then a general positional trade to play out for further stock appreciation across the rest of the session Same kind of play in in the s&p. I guess Probably be my bias if I had any Let's put it down onto a This is on a 60 minute chart So this is a 60 minute chart of the s&p 500 and this starts to encapsulate the last 10 days or so of price action Just been keeping on a trend line over this week, which has been respected on three different occasions So for me, there's a very nice technical point Much lower down if we start coming in coinciding horizontally around the 4300 level 4306 previous all-time high Support in the late us session yesterday with the trend line coming in. I'd kind of like that area Jumping in at these types of levels. I think it's a bit more tricky So I prefer to just wait see how the first initial 15 minutes of nice trade plays out It would be how I would look at it For the golden 10-year market Messy I mean, you've only got to look at those candlesticks to think Yeah, if you stood on the wrong way of that freight train It would have been painful. So hopefully though when you saw it me describing it in real time It definitely can be tradeable, but you've definitely got to be of a certain Characteristic and skill level and the execution sides to be able to pull off A very fast moving move like that. This is a one minute of gold And so you can see to me this tells a very clear story in a way, which is Let me just remove Some of these boxes just to make it clear. So on a minute. This is the downward reaction on the headline So this is that kind of more like algo related first in out spike on the fact that 850 is better than 700 Then you get the hold on this isn't quite as as spectacular as we were Perhaps looking for and the unemployment rate is ticked up. We get the reversal And that's the second move and in the gold market the third move kicks in And all the meanwhile, this is respecting technical patterns outside of a very short one minute on a more high time frame of 30 minutes 60 minute and then you get the realization of Does this really change things? Not really for the Fed and then we're back to ground zero again So for me for gold if I was looking at this this afternoon Um, I would be looking more to the dollar to give give me a bit of guidance Perhaps on any subsequent follow-through on those moves and euro dollars just perking up a little bit here If euro dollar really wants to push on break above its initial spike height to pivot The next kind of target doesn't really start coming in to a quite a bit higher above. You've got the r1 at 1894 and then you've got the 119 handle Which also is that high and low that you can see here on a few prior occasions. So if that happens That's more dollar weakness euro strength. So Again, could be then that could support gold if we get followed through the euro and the dollar weakness Yeah, equity is just perking up again a little bit All right. Well a couple of other things just wanted to say Um, and that is If you are not already following us on youtube Please do I would be massively appreciative if you would be part of our community Um, we put out daily videos. Um, I have macro briefings that go out a bit later in the morning But there's other stuff you might find useful and interesting So just just punch in amplified trading hit the subscribe button and if you click on the bell icon You'll get notified anytime we go live like this or there's new video content Feel free to follow me on twitter Probably the most useful thing both for traders and students Is every morning I put out my morning call and my morning call is Only things you need to know for the day ahead So for a trader part of your preparation routine Fundamentally strategically thinking about the day for a student Super important that you remain connected to markets And if you can spend two minutes reading this every day I do it for the purpose of trying to make you guys In a nice digestible way on top of what's happening because I know you're pushed for time with your studies and work and so forth Um, so feel free to check that out I do tweet other stuff throughout the day as and when I find something interesting Just be careful. There's a lot of fake me's these days this is The real Anthony Chung If you want to put it that way and my handle is awm chung. So feel free to to connect there And we also have a podcast Me and the head of trading peers current We have a very informal chat at the end Of every week where we talk over some of the biggest stuff of the week and our purpose is to try and deconstruct More complex things that might happen in the market But put it in a way that everyone can understand And make sense of so last week we talked about stress tests and the week before we talked about The dot plots because everyone was talking about the fed and the dot plot changed the composition So on and so forth. So check that out. It's also on spotify google Apple podcast just called the market watch And yeah, it'd be great to um To speak to you guys more often Okay, I'm going to wrap it up there for the live coverage and so Um, I will see those who are members of the amplifier live dot com community Online and I'll wish the rest of you a good rest of the day All right, take care everyone