 Morning Tuesday, 4th of February. Hope you are doing well. And couple things to discuss then. From my side, I'm gonna run through quite a sequence of different tabs actually of snooze stories I wanna update you with. I'm gonna be as prompt and concise as I can. And then I'll hand you over to Sam because I believe Alex also, who you've met on the briefing a couple times before, tend to look at the market more from a slightly more longer term perspective as some key levels he wants to talk about as well. So first off, before we get into the coronavirus update screen, let's just have a look at the charts and how we reside this morning. And the main thing here is that after kind of catastrophic failure of the Chinese markets yesterday, which the news agencies obviously were talking up, again, as we were discussing, it being more of a function of just the fact markets were closed and the fact that Chinese authorities were very forthcoming in their ability to do whatever it takes in order to mitigate that situation. Well, Asia markets up overnight. That has meant then that generally a little bit of calm restored in the respect that equity markets this morning are pushing to the upside as I speak. Did have the question put to me this morning, which was if I go back to that screenshot, when are we gonna hit peak coronavirus? Well, I guess there's two ways of answering that. There is one, when are we gonna hit peak as in the actual number of cases and confirmed deaths? Or when are we gonna hit peak as far as the markets are concerned? And if it's the latter, which I wanna focus on, because I'm not a scientist, I'm not here to try and predict then the accuracy of what the World Health Organization are doing. But from a market's point of view, I think peak coronavirus was last Monday. That first day what we sold off after that weekend gap down that we had, I think ever since then we've already hit peak coronavirus about a week and a half ago, if I'm honest with you. And I think that is validated that view by the fact that markets are doing what they're doing, which is after that first down day we've been pretty much rallying ever since. So how much of an issue is this for markets? Well, as we continue to see for different assets, there's different implications. Obviously China coming back, they're big dent to consumption in the oil market by some 20% from the world's largest oil importer. Definitely was getting factored in yesterday, and we'll have a look at that chart in a second. But for the moment, everything's moving higher in the equity space. And I'll let Sam go over some of the levels. He probably read Tesla up on the 20%. I mean, someone posted that saying, is this Bitcoin or Tesla? Because they're looking awfully similar at the moment. But yeah, decent US data as well yesterday, the ISM number was a blowout. And so all eyes on the rest of the other economic data that's gonna come out from the States as well as we go forward. But almost a perfect storm in that respect, solid data, but the Fed aren't gonna be doing anything anytime soon. And if anything, if we look out through the following months of the way the rates market is priced, it's for a rate cut. So if we're starting to get performing data, but a little bit of hesitancy, perhaps on any ramification of the global impact of coronavirus on the world economy. Well, that's kind of a, again, we go back to this almost perfect storm for the equity environment. Low rates, but an underperforming, fairly decent US economy and corporate earnings that have been on the balance relatively okay, despite Alphabet, which I'll go into in a moment. The other chart to update you on is the pound. Again, I'll let Sam go over that in more detail there's really nothing really new for me to add here other than a little bit of further more aggression in the downside. I mean, even just looking here on a 30 minute chart, quite obvious key level, technicals just breaking. You can see here, if I just put a rectangle from some of the price action that we were looking at from going back to last week and the tests seen at the low point in the overnight Asia Pacific session. So the break of that, which was just around that 130 handle in the futures at least, just helping exacerbate that downside price movement and obviously a big down day yesterday as the red lines are drawn and reality kicks in the idea then that the red lines put out by Britain and the EU are far apart bringing back the prospects of the no deal and the pounds got to reflect that new risk given where we're at at the moment in those negotiations. Okay, well look, quick run through then of some of the headlines. So the coronavirus, where are we with that at the moment? Case is just above 20K now, deaths at 427, total recovered at 669. As I said, from a global markets point of view from the intraday perspective, certainly if you're looking at US and European assets this isn't really a factor at this point. Again, I'm not talking about the actual virus in a case by case basis. I'm talking about how markets perceive this topic specifically. To be clear, these are two very different things. I'm not saying that this number is not gonna go north, it will and quantifying how far north is very difficult and I think it's a little bit finger in the air if you look at the width of estimates of before full containment and control of this is sorted out. The idea though is that markets are already looking beyond this as far as definitely equity space and given some of the repricing, bumping oil back down to 50, that's also in a large part pricing in that new expectation. The interesting thing though that I did see was this. This was the kind of trade representative for the trade office in America. They have said in Politico overnight that there is no formal request from China on purchase flexibility. This is talking about the agreements that they struck in phase one of the deal about buying large amounts, some 200 billion in fact of new goods over a two year period. So the USTI have had no request from China as yet although observers suggested that Trump could provide some leeway if the numbers are heading in the right direction. Now this is one of the things I was talking about last week is that I actually think this is a net positive for equities over the medium term because it diminishes any risk of a potential new or renewed trade confrontation between the two countries because if anything China gets a bit of a free pass and why would they get one from the US? Well, this is from no fault of their own. So it'd be a bit overly harsh I think for Trump to try and then hit the hammer home when really this is something which is out of the Chinese authorities control in terms of the actual origination of the situation. So again, I'd say this is actually in a kind of counterintuitive way quite positive thing for markets. What does this actually mean as far as the Fed are concerned? Well, I just wanted to bring up a comment from this chap. You might not recognize him but if you don't this is basically Bostick on the Fed and who said that the virus in China outbreak has prompted traders to begin pricing in the US rate cut by June has not swayed the views of the Atlanta Fed president. So he basically said we did three cuts last year and right now we're working our way through the those cuts of working their way through the economy will have to wait and see. There was a lot of stimulus for where the economy was and should make it more resilient to these sorts of things. So again, the Fed as far as the impact that the virus is having on the US economy they're still sitting on the fence for the moment and rightly so because there's no way you could have any clear foresight as yet as to the read across that that could have as an impact. But again, if we jump back here the cases in the US have remained pretty stagnant at 11 for some time and obviously still remains the case that most nearly all of the deaths and the majority of the confirmed cases are still in the Hubei area in mainland China. Deaths outside of greater China have been few and far between. Just to give you an idea of who Bostick is and where does he sit on that Dove Hawk scale? He's not actually a voter so I wouldn't take what he says too much to heart. He is a hawk so him saying the type of things that he did in that article are not that surprising but I just wanted to say that as far as the Fed officials are concerned I wouldn't be looking for them to give too much away in terms of again quantifying this impact that the virus is going to have on their policy. I don't think it's going to be as yet escalated enough where it's going to be a real meaningful change to things in the immediate future. What has been very interesting though was this. This was yesterday's ISM manufacturing PMI. I was actually off the desk but I did see got a push on my phone when this number came out and I was like, wow not just above 50, 50 spot nine. I mean, that's the first expansion in factory activity in America. As you can see there in six months, new orders was a big pop to 52 from 47.6. A sharp rise in export orders, production was up. The only even employment fell a slower pace albeit still sub 50 but some really stellar data that coming out of the States. And again, I do think that that is a real, I think the way equities will react to positive data at the moment given the virus that's happened. I think a good data is a positive for stocks. So rather than that kind of monetary policy read across which makes the equity reaction a bit messy, I think that the moment the virus keeps then and the also uncertainty about the future trade negotiation with China keeps the Fed on hold in its fairly accommodative phase of policy but then if the data starts picking up you go back into that kind of almost Goldilocks scenario again. As we look forward into the session going forward the highlight from the US data readings is you've got US factory orders and that too is expected to show a bounce today from the previous minus 0.7 up to a positive 1.2. Top of the range there is 2.5. If we get a 2.5 reading if we look here from the last 12 releases that certainly puts this way above the top end to go out to a five year 2.5 then puts this up at levels we've not been since really the summer of 2017. So that also would continue to promote a fairly positive dollar narrative in that respect and probably help weigh on gold and T-notes further to continue that trend that they've been in in those two products since the overnight Asia Pacific session as equities have been grinding higher. What is the expectations on Fed rates at the moment? Well the next Fed rate meeting is not until on the middle of March so some time away and 90% is the priced expectation for them remaining on hold 10% of the market anticipating a cut at this point. You've got to go all the way out till the June meeting where markets are then more priced in favor of a 25 basis point cut in rates at the moment. The other thing that we were talking about yesterday there were lots of source comments coming out as well. This was coming out in regards to OPEC plus officials. They meet for a technical meeting. This is part of their regular schedule. They're gonna be meeting today and tomorrow as far as I understand and this is about usually the adherence to compliance levels rather than anything other than that. However, if you actually look at the oil chart and I'm not gonna look at it from a technical but a fundamental perspective, couple of markups here to just quickly show you to add some context. I mean, here's that price band we've been trading in which is basically around the 50 to 66 dollar levels. You can see when we had that massive 15% spike in price in September last year on the Iran drone attacks on the Saudi Aramco infrastructure then had the US kill the Iranian commander. That was the kind of beginning of the year when we saw the kind of most heightened tensions within the Middle East. However, that's faded quickly. And now you've got the coronavirus denting overall supply and demand dynamics, i.e. big drop away on the demand side has led to this quite sharp depreciation in prices. Now, yesterday we did close below that technical level around 50 58, which as you can see was a key support level going back to May and August of 2019. Be interested to see how we close today. We are just back above that level for the moment. And again, I'll leave Sam to discuss then if we were to break lower what his targets might be on the downside, should we continue on that way? But one of the things here is that what you start to see, I mean, if we're just looking at this chart, let me just remove these for a second to make it a bit clearer is that once you start dipping below these levels, it opens the trapdoor somewhat to then almost psychological levels, perhaps that mid summer 2017 low. You're looking at pretty much round hand or figures here. So the 49, 48, all the way scaling down and then the prevailing low from that big sell-off we had at the end of obviously that whole global trade tensions, the oversupply in the market. That was when we hit that lower bound at 42.50. But OPEC at these levels start to get a little bit nervous. And as per what these articles suggesting and a lot of the talk yesterday was about what can they do in order to mitigate this impending drop in demand and consequently pressure on prices and what they can do is start to intonate towards more deeper supply cuts. And the talk yesterday was 500,000. I think 500,000 is a little bit tame. I'm not sure how much direct real implication that has on price. Anything more deeper than that, obviously, the more bullish a price that becomes. And they've also talked about bringing forward their early March meeting to mid February in order to get this done. So look out for any more OPEC comments. The technical meeting is happening. So all the all ministers are present and so I'll be expecting some more source comments either today or tomorrow, I'm sure. Quick word on the RBA. If you've looked at the Aussie overnight, the Aussie has spiked higher. Why has that happened? Well, even though on the balance, most banks are anticipating the Aussie or the RBA to hold rates, they did. But there were some looking for a potential cut and that did not materialize. So rates still remain at 0.75%. There's a couple of things. The virus is having a significant effect on the Chinese economy at present, but too early to determine how long lasting the impact will be. So they're holding off for the moment. The central bank forecast unemployment to a remainder remain around the current level of 5.1% for some time. They said CPI is still expected to be around 2% in the near term, with core inflation rising gradually to 2% over the next couple of years. And importantly for the growth forecasts, and what I was reading at the weekend, a lot of people were anticipating that we're gonna cut those, but instead they suggested lower the governor that the fire reconstruction will boost the economy in future quarters after a near term hit to growth. So that was a bit of a surprise in a hawkish sense and hence the reason why we popped higher overnight in the Aussie. And also with a little bit of recovery in the Asian markets, the authorities have to tame that situation by throwing everything, trying to just quell any fears on a run on the market. The Aussie is looking a little bit more favorable at the moment at this present point in time. Another thing I just wanted to mention because there's a lot of headlines around this at the moment. A lot of you might be sitting there thinking, what is a caucus when we talk about the US and what's going on in Iowa at the moment? So unlike the majority of US voters who cast secret ballots in their state primaries, Iowa residents in the US vote in caucuses or small local gatherings in which they publicly declare their support for a particular candidate. So this is to do with the democratic nominees to go forward then for the presidential race that will take place as we go into the elections at the end of the year. What is a caucus when it takes place in close to 1700 locations across the state of Iowa, there are also just shy of a hundred so-called satellite locations in other parts of the country where residents who are registered in Iowa but live or work outside of the state can vote. There's basically then a sequence of voting rounds, a first and a second. Over 11,000 delegates are chosen on caucus night. A number will be whittled down then to 41 delegates and the individuals who actually travel to the democratic national convention which is held in the summer in Milwaukee. So this includes Biden, Saunders, Elizabeth Warren, all those names who are the main kind of front runners in a democratic race. But what the headlines are talking about is that basically there was a technical error which enabled them or did not enable them to get an accurate reading on the initial results. So it was a bit of a calamity last night and a bit of a mess. And definitely I've not actually checked Trump's Twitter but I bet Trump is loving it because it was just an absolute debacle quite frankly. And if they can't even sort out a local level caucus, Trump's gonna be saying how can they run a country? So not doing themselves many favors at the moment. How important is this for today? It's not important. But definitely I thought I wanted to just stress what this is and give it a bit of an explanation. Final parts from me, Alphabet did come out. They had earnings, the last of the real big tech giants, obviously Microsoft, Amazon, they've all been great. Amazon was up 10% after their earnings. How did Alphabet fare? Not so good. Alphabet shares fell 5% last night. They are trying to be a little bit more transparent with their numbers that they release and that is being welcomed by investors. But what people were looking for, if you read that macro preview that I did yesterday for the week ahead, people were looking at the YouTube video streaming unit as it was one of the first times we were gonna get some detailed numbers around the generation of revenue for that particular unit. And they said that revenue was at a pace of $15 billion annually. Now that sounds like a lot of money, but it was well below estimates which were as high as $25 billion. So quite a substantial miss there on YouTube revenue. 53% quarterly revenue growth for Google's cloud services compared with a year ago meant, although that sounds like again, a good percentage, actually grew slower than the business it's trying to catch up with which is Microsoft's own Azure cloud computing unit. And so as such Alphabet shares were down after market albeit still up sharply over the last 12 months. Other earnings you're looking out for today, the other kind of main names, Merck, General Motors pre-market, Qualcomm coming after market this morning over in the FTSE, if you do look at the FTSE 100, BP, their fourth quarter profit B estimates, the company increased its dividends slightly, their shares out of the gate this morning at the Bell up 3.5%. So fairly decent response to that at the moment. So that's pretty much it from me. I'm just gonna hand you over to Sam but my overall assessment on things are stable markets, a recovery in China, just gathering its breath after the kind of function of catching up given the Lunar New Year holiday. So markets are over that now. The positive things here, we've had some decent data come out the US yesterday. We've got a little bit of action, noises about OPEC potentially doing something to help quell any run on prices on the drop in demand. So for the moment, it's a fairly risk on morning, all things being equal. The coronavirus again to be monitored, but at this point, not a major near term issue as far as markets are concerned, globally, at this point, at least outside of China. Okay, hand you over to Sam. I wish you guys a good day. Thanks very much. Yeah, hi guys, hope we're doing well. Just having a quick look over oil to start off with and well, it seems like if you get below 50, you get an OPEC comment or you have a down day, you're gonna get an OPEC comment now. So I think if your medium term short still, I mean, what better area was there to really take some profit on this point, you can see going back to the lows of 2019, we got below their finish below there and usually that would be ideal for a short to look to have these areas to hold up to then push us back down towards, well, I guess you could say 46, 47 area, but you got OPEC and they're promising things, which the oil market is gonna like, whether it be believed or not, I think today will be pretty key and just having to look over the last few days, you can see there's obviously quite a lot of resistance for it to get through. I think most notably coming up here, you got that 51 handle is bringing that pivot point. You can see almost near where we're trading now, 20 ticks or so above, which would be quite key. It was the low that we had back on Friday, we got real choppy overnight yesterday, but then it did find support again there before resistance around sort of eight, seven o'clock before that pushed down towards 49 and a half. So as the level goes for 50, 94, 51, have it marked up and keep a watch on that. I think if we can get above there, fine, we get a bit of a relief rally and then you could be looking towards 52 relatively quickly. You might suggest, I think there'd be some short-term resistance in around 51, 44, but oil, not necessarily out the woodworks yet, but it seems OPEC are willing to chuck these rumors out whenever we get below. However, could work obviously negatively if we do finish below the low of yesterday today, where the markets is not gonna listen to OPEC, is it? And this market could obviously go quite a long way down. Quick look over at equities. You can see this morning just pushing above what was such a key resistance yesterday and then briefly this morning and a decent push above that area on the Dow Jones here, the S&P similar in where he found some resistance yesterday on what was the Friday, kind of we could call midday, morning low, broke through and spiked and your target would really be around at 38. So nice push already where on the futures, the Dow is up 280 points, which is a decent enough move. I just would say be careful because obviously, while we are pushing to the upside and the sentiment definitely is risk-on, you're gonna have these trend lines that are coming in from those highs. You've got all these previous levels where the sellers took over and led to some of these moves on Friday just in the way here. So no harm in just saying, let's wait for a little bit of a pullback before getting in and what better level maybe than 28,582 or for the S&P looking towards that R13270 as well for that opportunity. The NASDAQ you can see just breaking through as well at that similar level. So stock's happy but quite a lot of resistance above and if we have a quick look back at just how we have traded over the last few days is incredibly choppy. There's been times where you thought this market could get away and push to the upside as well as the downside and make new lows for the year. So it's choppy. I wouldn't necessarily wanna be in a position for too long. Really for the S&P and I know it would be not the best entry in the world for reward point of view but unless we really get about 3300, I wouldn't really fancy a long for a medium term position really if we get about 3300, I think it'd be a quick move towards the all time high but remains to be seen what happens there. The pound obviously getting another hit this morning down quite considerably and the lower we come down obviously you gotta start bringing into picture that trend line again before we had the last of it not yet I'm afraid. We have broken through that today and that remains very key if we close here for this market and I don't really see if we can close below 129.41 as well in the future I don't see much stopping it from a technical point of view towards these lows that we had in October and November. What a rascal of a market. You could think after the election, boom, let's go. Or after the fact that they keep rates on hold, right. There's a 50-50, let's really extend it. Boris comes out on the weekend and hikes it all up and we're down from 132.25 to under 130 now. So keep a watch on this on the pound and of course that retest of that trend is going to be pretty key goal as you would expect this morning just coming under a bit of pressure with stocks pushing higher and you can see just a zone there to focus on. So this isn't really moving off anything to do. The dollar mortars risk play and can we get a confirmation of the break of those lows which come back to retest that area now as well and as you know when we've talked before with gold if we do get a push lower because of that just be aware of what has held up price previously all of these areas of support and of course this trend line is in the mix now to come in around the S1 1570 area. So quite a lot of support to come through for gold and by no means is this now the end of the coronavirus threat and we just have a look at gold, it's basically what equities have done. You think it's going one way it doesn't, the other it doesn't as well. So messy and in times of predicting overall things here it's overall direction is pretty tricky. Now I'll leave the Euro for Alex to talk about in a moment. I know he's going to talk about the Aussie dollar as well which you can see here is extending through those highs thanks to well risk on but also the rates being kept on hold there was a slight murmur that they were going to cut last night. So I'll leave Alex to talk through that as well. Just a quick look over the DAX which you can see is pushing higher as well. Did have a poor Friday just like a European US sorry but yes there was no real push. I know that obviously the FTSE with the pound weakness has had a good morning and looks like the DAX is just trying to extend over these highs as well but you can see the importance of this level maybe the hourly close is something you would focus on here going back to the low that we had on the 28 if we tested it on the 30th, broke through did find some resistance before getting choppy to the close broke it on Friday and we're now testing it now can we get a close above there? I think will be important if we do that might give the queue for US equities to have another run. If not, well what happened yesterday was a bit of a drift down before the cash open extended us higher. I'll just pass you over to Alex and he'll go through some of the charts for you. Do you need the training? Cheers sir. Morning. Morning, just first of all would like to look at this dollar index on a daily chart which we had that big train line from the weekly which is which was coming up sort of this way and then now on the daily there was this trend line resistance from the tops which price is now broken through and it's holding a support and yesterday we had that pretty monster rally off of it with that ISM report and so I think if this trend line support holds you know we make new high for the year. Make new high for the year above 98.20 above 98.20 you've got that November high which is that sort of 98.50 area which is actually a nice area of resistance and then from there surely it's got to be back up towards the November, the 2019 highs back up towards this 100 area. But actually, in currency land itself the price action is just disgusting like it's absolutely no transition actually could I do it on spot? Yeah. So I'm just going to look at the Euro dollar on spot market the price action is just ugly, it's so ugly I just almost like it's almost depressing like but the thing that keeps me going in currency land is the fact that I know it's going to change at some point it's not going to stay like this forever but looking at the Euro really interesting with that thesis from the dollar index looking to get long the dollar especially with that ISM report Anthony was saying this morning that a couple more data points like that from the US and the Fed might start talking about hiking again and in those conditions with a strong dollar anyway the dollar could explode to the upside and so just getting this 100 day moving average on my sort of thesis here for the for the Euro is this 100 period moving average so we're this as we've seen before this 100 period moving average can be the catalyst for these big down moves and especially when we move above it support support break back below and move back below again so we on the 31st on Friday we closed above at this really strong close above it and now we're yesterday we closed below it but we didn't quite close as bearish we didn't quite close as bearish as I would have liked yesterday we also back below this fib 382 from the bearish from the top there I would have liked to have this candle to have closed a lot more sort of bearish than it did but as long as we stay below the 100 dear may I be looking for bearish opportunities actually zooming in on a I think there's a trend line from there's this trend line support here which is key there's been a bit of strength in the Euro this morning which isn't really that welcome and we see this trend line support that's key in my opinion you've got trend line support there and the balls are going to be looking at this higher the day if the higher the day goes you'd be looking to play the classic off of that if the trend line support goes we'll take over we get that continuation of the dollar strength not really much making too much sense in currency land but there's two nice opportunities I prefer the short but obviously this this price action this morning is just horrendous so quickly moving over to the Aussie then the Aussie the RBA didn't they held their held rates was looking at this area down here sort of roughly mark it up massive area around that seven hundred handle huge area and what's really so we'll be looking for bullish opportunities down here and what's interesting the guys yesterday we're looking at this really awesome range which had formed this little box range here was looking at that right in around that bullish area and so the excuse me excuse me excuse me this area here so we're looking at this range in area right in around that bullish that bullish area off the daily we didn't cut we broke above it we sort of tried to come back a support didn't quite test it and so your backup plan would obviously have to be some sort of trend line resistance break or high the day break which has happened now really but if you missed those opportunities I wouldn't worry because actually we could have quite a big bounce here in the Aussie if we draw up some fibs and whatnot you've got the fib 382 which lines up with that 6820 back on 10th of December which was 6800 handles well that's decent and these tops from back here is a really nice horizontal area around here around 6820s again and so I think that would be nice the only thing going against the Aussie is that dollar strength if it if the dollar follows through but that's quite an interesting area there but I'll leave it at that that's my little thing my little two pence thanks Sam yeah guys I would be interested to hear what you think about the dollar and those pairs as well and also with equities have we seen the bottom or is it actually just going to get choppy all over again and for oil are the are OPEC going to deliver over the coming days and the oil has also seen a bottom if you're interested to see what you have to say should be a good session ahead so I look forward to catching up with you all later on