 Okay, very good morning guys Anthony here from the desk Amphi trading in London. We're just going to do a quick review then of what's happened from overnight and Yeah, obviously the main thing that you're looking at is a sharp Lower open for European equities on the back of an aggressive sell-off that was seen kind of late afternoon yesterday Inspired by none other than the US president Donald Trump Reescalating the trade war Tweeting about an increase of tariffs which we're going to look at in a second. So really that is the main story of the morning and We're going to look at then what does that subsequently mean for market expectations now About what the Fed are going to do next just given what they said in their meeting on Wednesday night and then also Potentially then what is this strategy of Donald Trump to potentially force Powell's hand in order to assist the markets with more Interest rate cuts. So not only that we've got non-farm payrolls of course coming out later as well We'll have a quick overview of that I'll probably go in more detail punch the numbers so to speak of what we're expecting closer to the time of that release So that's what's on the agenda, but yeah, looking at these charts I mean, it's quite obvious to see when you've probably booted up your systems this morning that you know The severity of the sell-off. I mean what a day for What a period of 48 hours if you're Jerome Powell at the moment you deliver this What would be classified? I guess as a hawkish cut the markets sell off fairly aggressively Only then for yesterday we get to the open of Wall Street Markets actually equity markets looking at the S&P here actually recovered all the way back to the pre-fmc announced levels Only then for Donald Trump to come in and just knock the whole thing back down Even further below where we were in the initial aftermath of the actual fmc announcement itself so Just when power might have thought he's got away with it His arch nemesis if you like the president comes back and forces prices back lower And so as you can see the DAX future this morning I know Sam was going to look at all these charts much more detail from a technical perspective But you know DAX seeing quite a bit of volatility go through the cash equity open in the last few minutes already down 250 or so Following suit then from the moves that were seen the US last night gold prices obviously responding in kind So gold seeing a real aggressive move yesterday as we went through the afternoon T-notes also up this morning about nine ticks and to be up nine ticks at this time in the European morning It's quite unusual But it just goes to show the follow-through that we've had in the age of Pacific session following the close of Wall Street last night so what What did Donald Trump say I'm sorry my hesitation there is Sam's just pointed out in the chat room Bank of England's Governor Mark Carney is speaking on BBC Radio 4 in five minutes time So anything that I see come down while I'm delivering this I will let you know Obviously, Carney's had a little bit of criticism This morning in the press About this idea that really his forecast weren't factoring in the no deal even though that's a growing possibility Carney kind of sticking to the fact that while the government's Still defining mandate is to deliver a deal for Brexit Despite what the narrative is at the moment from from Johnson and co And so perhaps he's doing the kind of media rounds this morning to clarify the positioning of what his stance is Keep you posted anyhow Let's have a look at Donald Trump. What was he tweeting yesterday? Well, it was really a string of tweets And what was quite interesting is obviously we've had from the trade war developments this week If you remember it was quite interesting because they recommence face-to-face talks for the first time in three months at the beginning of The week it was supposed to be a two-day round of talks where Treasury Secretary Mnuchin and the trade secretary Lighthizer went to Shanghai But you remember two days talks was abruptly finished to just one day and they came back now apparently Trump met with Mnuchin and and Mnuchin's advice was actually they made some decent progress and His thinking was well, perhaps we should use the the threat and tell China that we could be Going down the route of applying a 10% tariffs and not this 25% nothing immediate But that would be his recommendation and apparently what's happened here is Trump's gone. Okay, Steve Thanks very much for that, but you're wrong This is what we're doing and then Trump just basically outlined a series of tweets and here's the general gist of it Our representatives have just returned from China. They had constructive talks about a future trade deal We thought we had a deal with China three months ago But sadly China decided to renegotiate the deal prior to signing He goes on and this is the crux of what he's saying is this one During those talks the US will start on September the 1st putting a small additional tariff of 10% on the remaining $300 billion of goods and products coming from China into our country This does not include the 250 billion dollars already tariffed at 25% He's also gone on to say well, we could even go further than 25% So, you know, he's really gone to town here the interesting thing and a lot of speculation that's doing the rounds this morning is Remember the comments that Jerome Powell said at the meeting on Wednesday night The biggest one the one that caused this kind of hawkish type reaction was that we're in a mid-cycle adjustment That meaning or interpretation in the market then that he was signaling just maybe a one-and-done or one or two cuts Not a series of substantial rate cuts to come Now one thing that Powell also said was the Fed chairman said his rates cut was justified by trade tensions now if that is the case and He's not delivering then on these substantial rate cuts to prop up the economy that Trump wants. Well, then if he's defining a lot of that Decision-making on the trade war if you're Donald Trump, let's just create a trade war then It's all on let's just ramp it up. Let's actually use the stock market Let's weaponize the stock market against your own central bank to force them into doing what you want A lot of people are speculating that that's what Donald Trump is exactly what he's doing and actually what's happened Well, inevitably if the trade the trade war is undoubtedly the biggest global risk Not just to the US but to the entire global market now Golemans have come out. Golemans released a research note last night. They basically said they now see a 7070 percent chance of a 25 basis point cut at the next meeting in September that figure was previously Prior to the Trump tweets at 55% GS say they say they see a 10% chance of a 50 basis point cut in September a 20% chance of no policy change So these banks are I'd expect other banks to fall in line with a similar view because You know forget about what the banks are saying what are the markets thinking well federal funds rate futures For the sep meeting which is the next Fed one which comes alongside the renewed plot and the summary of economic projections The market pricing is now 82% for a rate cut in September You know, that's way higher than what we were expecting even for the one we just saw this week So yeah, this latest little turn of events, you know, is this Trump forcing Powell's hand? obviously highly Highly risky strategy from Trump very unusual to be to be using the economy in such a gamesmanship way, but perhaps This is the genius of Trump and perhaps this is what's necessary for him to get what he wants politically keep the market sustained Remember the short term is to view. He obviously just wants to get in Stay in for another few years. I don't think he's really Thinking about the longer term ramification of what he's doing Would be my view and so in the short term, maybe he can manage the situation. So definitely as we go into the US afternoon Well, really, there's another very important piece of information coming out And of course that is the US non-farm payroll report now yesterday We had a slight miss in ISM manufacturing PMI The employment employment constituent actually dropped fairly substantially against its prior months reading The point here though is that I actually think about 18 months ago two years ago Markets were kind of hypersensitive to really one data point and that were was inflation metrics as the key defining factor The greatest weighted piece of economic data for what would influence the Fed decision making Now what I actually think given what Powell has said Traders now I think are going to be ever more sensitive to just top-level tier one economic data out the US And definitely non-farm payrolls fits that narrative. So Yeah, whether or not markets, I think if you had a let's just say you get a Disappointing payrolls you get a low low ball number to give you an idea. Here's the chart We're looking at expectations around the 160 mark for the headline change in non-farms That obviously comes after a pretty strong Number last month out way north of 200 Obviously payrolls combination of different factors the unemployment rate But importantly the average hourly earnings, but if we get a weak report That's only gonna fuel further than the idea that the Fed not just committing to a cut in September But having to do multiple cuts thereafter and actually the worst it gets And definitely this is what Trump wants by instigating renewed trade tensions with threats of new tariffs is That equities actually rise on the premise that the Fed are gonna have to commit to a more Continuous cycle of cuts. So, yeah, non-farm payrolls Will be important. I think every piece of big top-line data We get out of the u.s. Will be important as data points to suck, you know to to build in this view or not All right, we'll move off that for the moment. Let's have a look at the UK Now remember you probably would be aware. We were talking about this yesterday. We had a by-election in a constituent in Wales and Particularly important because the nature of the way the Thin majority that Boris Johnson has in Parliament at the moment now. There wasn't really any surprises here because what happened was the Conservative seat which was Davies who was re running after an expense scandal lost relatively small margin to the Lib Dems and and Dodd was expected to win and that has Materialized which means the working majority in Parliament for Boris Johnson has now dropped to one Now the reason why the pound isn't selling off is because you know for me, yes This makes quite sensational headline reading Boris Johnson. In fact is the fastest ever Prime Minister to lose a by-election, which is not a great statistic to have to your name But beyond that kind of sensationalism in the UK press I think the markets really say all the pounds done nothing. This really is not unexpected and if anything for me only fuels this belief that Boris Johnson is definitely lining up a general election to be announced in the coming weeks in order to rebuild this broken-down Majority or this working majority in that fact interestingly if The Conservative Party and I'm just putting this out there because I don't think that these two political parties are Aligned and I do not foresee them joining up But if the Brexit Party and the Conservatives teamed up they would have held this seat They would have won this seat interestingly people like Cricky I can't even remember the party's name that that was created by Chaka Muno who he then left that's how That's how probably bad that they've been the change party But then also the green party Basically, they didn't run for this seat and the reason for that is because they formed A pro-eu alliance getting behind the liberal democrat party who's the more mature the more followed or Party that's probably going to get most support. So that was quite interesting This kind of pro-remain alliance is definitely a positive In that sense and maybe then an election isn't so inevitable that Boris Johnson is going to get a resounding majority Because as we've seen here the teaming up if the Greens and these other parties were to force their votes into the Lib Dem in order to cut off Then this runaway no deal Brexit mandate Johnson government, you know, maybe it's not just a done deal for for Boris after all All right quick look at the calendar for the day Because I know you want to hear from Sam and what he has to say about the charts What have we got this morning? UK construction PMI. Yeah, maybe worth watching. Obviously. We had a depressed number in the manufacturing PMI from the UK yesterday Just trying to recall. What was it the week since 2012 construction last month in the UK was the week the steepest fall Since 2009 so right in the midst of the global financial crisis Moving on beyond that point Well, certainly for the construction of PMI in the UK. I don't think that's going to move the market just to be clear Even if it is a sub 50 number European retail sales. It's never a market mover. So I think just Definitely a US centric session for me. I think markets are going to be quite quiet this morning really two things one Just waiting for the main event which being non-farm payrolls and then after that I think that's when you're going to see the real follow-through reaction Not just depending on that outcome, but also given the announcement out of trump as well I think you could either see a really powerful rally to finish the Week in us stocks if this is a low ball payroll number I think yes, obviously that's not good economically But I think that will just ramp up then the idea that really power's got to come through and start start leaning on More rate cuts to come That would fuel further t-note bid Gold might recover then and continue to to remain bid and then I'd be anticipating dollar weakness on the back of that Continuation of the hit it got last night on the back of the trump tweets Elsewhere us factory orders you got the final University of michigan, but again, this is kind of a Side order to the mainer things. I've just discussed and from a Earnings points of view the only real things to be aware of here are a couple of us majors So again, this isn't really going to move the index futures I would say only for if you're looking at single stocks But you get the oil majors exxon and chevron as well both will be reporting pre-market Just to finish on my my Delivery the chinese commerce ministry has just come out last couple of minutes And they've said that if the us is intent on implementing further tariffs on chinese goods China will have to take counter measures No explicit detail on what those counter measures might be That's not surprising. That's pretty much the uniform response from china They kind of whatever you do will match it in kind All right, that's it from me I'll be around to cover payrolls in fall later on, but if I don't speak to you before then I wish you all a great weekend. Thanks very much All right guys happy friday Have a quick look over some of these markets and it makes a good point if that number is is not that great then You could get a bit of a rally back in stocks and where we finish the week will be key And you can see just from these lows that we're we're printing out now just having a little Little push higher I guess you could start again as usual to get these sort of trend lines in and you can see we're starting to get a bit of A respect of maybe a third fourth test here We've got quite a clear Area of resistance near those highs of the day So, you know, whether you want to get too involved on the morning of a non-farm payroll You know as usually not too much in the way of activity. Here's a little bit of a guide Area of resistance trend line there as well looking longer term You know areas of the week that are important You can see we're now below those levels from the 1st of july, so if I just bring that higher up We're in here now looking more 29 56, which is also kind of the the post fed low As an area to finish the week bubble below You could almost say if we were to get above 56 and and then start getting towards the pivot Then it's it's pretty you know bullish for the end of the week or at least defensive for You know a fervor push down Whereas if we do close below it could open the door up and non-farm payroll is most likely to To be the the main reason behind Whether we get higher or lower and then any retaliation from china Into the back end of the week's one thing's for sure. I wouldn't really fancy holding positions Over the weekend on on us stocks At all dollar as well likely to be relatively quiet this morning. Just having a look at At the euro you can see we have trended Lower from these highs, but we are to keep knocking on that door and similar to yesterday Afternoon as well and that we were just you know respecting well enough the a trend line here Then finally getting that breakthrough obviously into the evening. We had a further big push So I'll just be keeping an eye on that But you can argue from the same from those lows as well. We are getting squeezed in both ways On the euro dollar So a break either way could be a bit of an opportunity It's just whether you'd want to really get involved too much ahead of the big release at 130 to the upside and I know certainly people will be Looking at this more for maybe next week, but where we did have that breakdown on the end of the month Or any of these levels of support could be a good opportunity To to get short longer term or more medium term I should say and that's coming in around on the futures anyway around 111 70 for the pound Didn't really get that relief rally as such like the euro yesterday Following a break but similar in that we had the the push Just before four o'clock a break of this trend push higher and we're now actually a bit back below And it is relatively you know more choppy to the upside the pound wherever you'd want to get involved again really before Non farms are not I'm not too too keen on that Again just to reiterate for those that Haven't watched the briefing This week or aware on the pound any retracement back to This trend line on the weekly would be a great opportunity to get in but also to the downside We're now not far away at all from that big 120 handle that 35 year low post brexit January 2017 level of interest that's coming in today Probably not too far from where the s3 would be as well yesterday's low s1 quite key Yesterday's high r1 as well a level I would have marked up but for now not doing too much Gold obviously had that nice push yesterday big push higher pivot acting as a good level support Also got a few highs and decent level of price action from from there as well Where it's just slowing down now. We can see this was An area of support in the Asian session So a bit of a line in the sand bit get back above there in 1450 could come relatively quickly The the pivot if we were to come back down again, I'd just be a bit hesitant about maybe wanting to take that on Especially given given the morning But where we're trading literally right now pretty key was that previous low Here and we're just coming to test it really for the some third fourth time So you'd off that you'd expect a bit of a break which is happening now You can see just trying to extend Higher the dollar only down 0.09 to pretty flat for the day So gold just worth keeping an eye on there Although of course volume pretty low the decks on the open spike in lower obviously down quite a lot from Yesterday evening anyway In terms of just sort of looking over the next few minutes we come back down to that s1 is it's already been quite choppy To be honest and although the movement for a for a monday pretty pretty big already for the decks usually it's just sort relatively quiet And certainly looking longer term here. You can see if I was drag this to the right hand side Let's put this on a daily chart In terms of levels where we could finish the week for the decks you can see Just this area support not far away from where we're trading Which was the low back on the the 6th of june and this is a level going back to Well, this is last year here. You can see above the camera. Yeah Um Good area good area of prior section when we finally did get back above We saw a decent push higher. Can we get down to to test that level? Can we get below it if we were then you know Favouring more medium term push down next week to the low down we had on the 31st of may That was to hold the key level. I would say to the upside around 12200 Where you have these previous double bottom before that break through the last few days And so quite a key level coming up in the decks. We're keeping an eye on there Have a quick look over at oil to to wrap things up. You can see a decent push lower. Yes, then what was a fantastic trade? I have to say yes, so It's clear all the trend lines on is when we had the the break Let's just get this trend on the break of the The trend which started on the low of the day because it came back pretty much Bang on to the tick of obviously to have held the whole movie I have to be a bit of a genius But what a move that was and you can just see when like gold when these trend lines do break You can get those really big push pushes down pivot worth keeping an eye on as the next sort of resistance point above Where we're trading however not looking like it's coming into to play for a while. We have rejected that as well and similar In those these little trend breaks have happened Already Next level to the downside. You've got a bit of a zone here I would say the low the Asian session low and previous session high 54 70 54 66 if you are sure That's definitely an area. I'd look to to take profit but given the calendar In anticipation for non farms and and whatnot. I'd probably wait I'd probably wait before getting into aggressive any any of these markets Only taking a small risk if at all Well, we'll be on the micro course throughout the day ahead of non farm payrolls But for anyone not tuning in. I hope you'll have a great day and even better weekend