 All right, very good morning to everyone. It's Monday the 8th of July. Hope you had a great weekend. Usual Monday briefing, so a bit of a combination of me updating you with some of the major headlines from the weekend, but also thoughts and views for the whole next five trading sessions ahead. First things first, before we overview this calendar of events, let's have a look at how the charts are looking this morning. You can see immediately on the center left here, the DAX future, off to a positive start. We did see a very aggressive rally, actually, to close out the initial dip after non-farm payrolls in US index futures. The S&P, I'll show you in a second, effectively reverse the entire move. Not only that though, but you've probably caught wind of the news in regards to Deutsche Bank this morning. I'll quickly show you the headline, this was it. Over the weekend, Deutsche Bank CEO slashed 18,000 jobs. I think we're looking at numbers of around 100,000 as a workforce, so obviously sizable. More often than not, a share price responds quite well to these kind of cost-cutting, restructuring type headlines, particularly of this type of magnitude. Now, just to give you, again, a bit of context, 18,000 job cuts at a major investment bank, that's about the most since the global financial crisis hit in 2009, that we've seen such a severe cut in one go. So, complete reshaping, exiting its equity sales and trading business, also cutting jobs, I think in their fixed income department, and moving more, pushing in towards commercial banking. I think I understand from what I read this morning. But point being, Deutsche shares up, initial market open up just over 3.5%. That's probably just helping a little bit as well as this overall recovery that we did have, more broadly speaking, late in the game on Friday after initial payroll sell-off in global equities. So, yeah, back up to pivot, as I said, this was the headlines I just showed you. So, substantial job cuts helping elevate and cut costs in the interim period for Deutsche. Otherwise, looking at the other charts, it's relatively quiet. Dollar index is basically flat, so really not much movement at all in the major pairs. And just to re-emphasize, obviously the day after, in terms of trading sessions, non-farm payrolls, is typically quite quiet. Tends to be then the market starts to kick into gear towards mid-week. And as we'll discuss in the calendar, definitely mid-week is where it's at because Fed's Powell is gonna be speaking at a very important speech, which everyone's gonna be looking at very closely. But here is the S&P 500, taking in a bit of a broader context of really most of the month of June and July, and really just focusing on this last week's price action. We obviously had this time last week, the G20, which finished with an upbeat tone, given the fact that the escalation, if you like, was put on ice between the U.S. and China. However, we reversed, only to find the gap fill as a technical point of entry then for the re-arming, if you like, if you're an equity ball of those longs and the eventual push-up to what is now the all-time record high territory, which, of course, breached the 3,000 level. Period of consolidation last week, and then, of course, we had the finish, which was, this is what I meant by, look at that price action. Initially, we sold off, obviously payrolls, super strong on their headline. People were somewhat of a downside bias, given the weakness and the large miss in ADP and some of the other employment indicators. Markets sold off as the prospects of a 50 basis point rate cut were taken off the table, but just look at that ramp into the close. I mean, it was, you can hit that low, which is now going back a trend line forming over the best part of last week. As soon as Europe left the market, US just absolutely came right back in and just picked the market back up from its lows to close pretty much reversing the entire payroll-inspired sell-off. Important point, I think, there, and the reasoning behind that is because after the initial unwinding of this 50 basis point rate cut, the Fed is still gonna cut as far as the markets are concerned, and likely it is, they're still gonna cut multiple times. So it's kind of more a function of unwinding of that more dovish bets in the market, and then back to reality, which is ultimately the Fed is still in a very dovish mindset. Now, it hasn't really changed what they're gonna do as far as the 31st of July, which is the next interest rate meeting. Otherwise, elsewhere, T-notes have held on to a bulk of the payroll set off, but as per the equity move have come up back up, finding some resistance at the moment around pivot this morning, and looking at oil, relatively quiet, sideways range to recommence trading for this week, as we'll see a couple of headlines on Libya and Iran just to be aware of, but nothing really jumping out that it's gonna be an immediate market mover in that sense. So let's have a look at the calendar, and just touching upon the main highlights, what I really want to emphasize is Fed speakers, and particularly for anyone new to markets, you'll see two bolded underlying events that I've got on Wednesday and Thursday, and Wednesday is by far the most important, because what we get here is basically two testimonies from the Fed Chair, Jerome Powell, the first one of which is on Wednesday when he testifies for the House Financial Services Committee. So this is here. He will then speak again, testifying to the Senate Banking Committee on Thursday. Now, so there's two big platforms here where outside of the regular, I would say eight interest rate decisions that come from the Federal Reserve, the testimony is often used as the kind of platform to vocalize to the market what it is their intention is going to be with future monetary policy, and now is more important than ever because we're looking for confirmation of is that payroll number and the repricing of that threat of a 50 basis point cut, are we right to have priced that completely off the table? We're gonna find out pretty much this week. And the reason why I've got here bolded the speech that Powell will give to the House and not the Senate is because basically he speaks, this is an event where the central bank reports back to Congress, but Congress obviously has two chambers and so he basically repeats the same opening statement. He just then takes questions from different financial services committees of both chambers. So essentially the Wednesday one is the market moving one. The Thursday one is largely a repetition of the statement he'll give the prior day. So again, Wednesday is gonna be really important. That will be the event of which the market will build up to because then we're awaiting, what is this latest stance of the Federal Reserve? Not only that, the other important thing here is you're gonna have to look out for Fed's power is actually speaking front running that event alongside some other Fed speakers on Tuesday. You've then got a whole host of Fed speakers on Thursday and just another point to be aware of here, you can see you've got Bostick Barking, Koalai, Kashkari, Williams all speaking on Thursday. And as I said, Wednesday's the big pal speech. Now this is quite classic central bank management of where just like you'll see with a big interest rate announcement, they usually schedule in multiple speakers after the big event. This is almost like a protection policy just in case the market misinterprets or the Fed wants to realign market expectations. This is classic kind of Fed way of doing this. They will already have scheduled in a number of keynote speakers the day after that announcement from Powell. So again, Fed speakers alongside that event are gonna be really important and I think the main market event of this week that will define market's kind of general sentiment and direction. Other things that you're looking out for, that's not it from the Fed either because you get the Fed minutes on Wednesday night. And if you remember, this comes after the June meeting with the latest summary of economic projections and you'll remember that SEP where the rate forward looking expectations dip and then recover over time. And it was quite an unusual trajectory here because central banks tend to go in a rate hiking cycle or rate cutting cycle. Very rare to see this idea of rates gonna drop into the end of 2020 and then rise into 21 and beyond. So how much external headwinds or risks around trade wars and their thinking behind this kind of unusual strategy of rate policy is gonna be particularly interesting. And that'll be Wednesday night Fed minutes. You also get in terms of minutes, the ECB minutes which is gonna be another one the market will look at closely just given the economic situation in developing in the Eurozone. And then on Friday, you can see down at the bottom you also get Chinese trade balance and of course import, export numbers trying to ascertain the severity of the the repercussion of the ongoing trade war with the US is having on the local economy is also gonna be of particular interest to traders. And the final thing from a data point of view again, what's gonna really seal the prospect of what the Fed is gonna do at the end of this month of rates is not only have you got important communication from Powell and others you've also got US CPI coming out on Thursday. And of course that's one of the main metrics that really the Fed are closely locked in on at the moment to define what it is what action they're gonna take. So that's the kind of weak as a whole quick cycle through them and some of the headlines and I'll hand you over for Sam to look at the charts more specifically. But this is the impact of what you've seen these two lines defining the blue line the possibility of the Fed cutting in July by 50 basis points the pink line would be by 25 basis points. So as you can see payrolls causing the latest kind and most severe immediate repricing of those expectations i.e. 50 basis point went from a high 20% probability to now as we'll see it's circa 5% to 6% and then likewise that's shifting into near on 100% 95% probability now of a 25 basis point rate cut. So again just to be clear it's not that the payroll number is enough to mean that the Fed are not gonna cut rates at all this is just about the severity of the cut in itself. So again 94% for a cut of 25 now just six for 50 basis points. So other things that could shift the needle here of course will be drone power and the CPI data in particular alongside those other Fed speakers. So by the end of this week I reckon all things being equal my feelings have always been the same I think it would be inappropriate for the Fed to go so big as a 50 basis point rate cut given the lack of general room for maneuver they have with rates being only at 2.5% comparative to other cutting cycles when interest rates have been double as per the financial crisis reaction or even triple if we go further back in time to things like the dot com bubble and so on. Okay a few other things to be aware of I mentioned Deutsche earlier one website I wanted to just mention to you guys you might not be aware of this but it's a company called Langen Schwartz who are a broker but the reason why I'm showing you this website is because in pre-market they have this little box of tops and flops so a lot of you might hear on the squawk or you read in the press so this morning there was a Reuters article saying Deutsche Bank in pre-market are seen up about 5% and you might think well how do you actually get hold of these pre-market indications? So the pre-market generally comes from brokers because they're the ones who are kind of satisfying a bit of a spread in pre-market activity so Langen Schwartz are the one for Europe and so if you ever did want to check after a big piece of European based equity news just go on to Langen Schwartz and check the tops and flops and you'll see Deutsche and their pre-market activity ahead of the cash open on the Deutsche Bors at eight o'clock so you can start checking this kind of seven o'clock and you'll be able to get a decent indication of how their shares are going to open as I said up pretty sharply this morning other things to have a look at nothing's really changed on the general bigger picture I would say on the global growth story very quiet on the trade front of course between the US and China because that ship has kind of sailed in terms of the hierarchy I think of real market threats if you were looking at this week from a news top level macro perspective the trade war is definitely dropped off the top mantle if you like the top of that is now is Jerome Powell's testimony and then some US data to follow i.e. the CPI the other big picture here is the idea about the health of the global economy the PMI has obviously been indicative of a slowing down and we continue to see that replicated and other economic measurements this was overnight Japan's machine orders dropped sharply in May amid this ongoing global slowdown so really nothing new but I think it was a miss of a fairly substantial magnitude casting doubt on the strength of capital investment over the coming months I mean that really sums it up not just for Japan but I think for the entire global economy and this is what can become somewhat of a self-fulfilling policy because if everyone starts to become concerned about this low yield environment indicating then of a potential economic slowdown well then if companies start to withhold their capital investments this can then start that domino effect and lo and behold the economy will start to slow down significantly the back of this did see a research note out of Morgan Stanley they've turned bearish on global stocks as challenges grow the interesting thing here is that earning season there's a couple of earnings reports actually coming out this week the only one that's really I guess from a broader indices point of view that might be interesting is PepsiCo PepsiCo are roughly about number 28 in terms of indexed capitalization or indexed percentage weighting in the S&P 500 so they're nowhere near the top of the pile but one of the bigger companies reporting earning season really kick off a bit more until the next week or two but earning season is coming up and you're seeing probably a couple of these banks just realigning their expectations a little bit because as they're suggesting elevated valuations in profit headwinds are amongst the biggest concerns because just like we were just talking about with fears over deploying capital investment or borrowing under conditions of becoming more pessimistic about future global growth while corporate profitability expectations got to be realigned and come back somewhat and so MS kind of getting ahead of the curve and just downgrading their allocation to equities to the lowest in five years and I think that really is a bit of a sign of the times because I think if you look at equity prices year to date S&P I think what we're up in double digit percentage gains north of what 15% and so up at record high territory I think it's appropriate probably to think of this idea that well taking a little off the table in equity exposure is probably from a medium longer term point of view likely to be appropriate. Other headlines Libya fighting has erupted again here's the oil impact is an article we shared via Twitter on the Amplifier account not that there's any new news this is kind of an ongoing situation of course this is to do with ever since the death of Gaddafi in 2011 there's been this kind of jostling for power if you like power struggle and what is as far as reserves of concern Libya is one of the most kind of healthy oil producing nations in that sense it's just the fact that they have such political difficulties such civil situation at the moment where there's Haftar who's the kind of self-imposed kind of political structure taking control of the army and much of the oil infrastructure in that country is causing friction as he's kind of pushing on the capital city which is then backed by the UN and obviously more aligned Western forces so this is definitely something to just keep an eye on as I said there's nothing really too new it's just kind of a similar situation with Iran Iran's all ministers saying over the weekend that they'll continue to pump and export as much oil as physically possible this of course meaning that their Iranian enrichment levels have gone over and above that of what was agreed in the original 2015 agreement with the Obama administration so tensions in the Middle East I think although a lower ranking topic on that structure of hierarchy of macro themes as per usual with these commodity markets it only takes one supply shock for the whole thing to become an elevated issue again so definitely would keep an eye on it in that respect other things to be aware of, Brexit we remain in that the usual spot for the moment where I think the process of where we're at with the Tory leadership now is that the 160,000 kind of grassroots Conservative members start putting in their postal ballots as of today that is a process that will go on for the next I think two weeks or so it's not until the week of the 22nd of this month do we start then looking head towards the results and who will win that but again it remains odds on that Boris Johnson will win this with that being said then with Boris Johnson taking this very much more of a hard Brexit stance of a credible threat of a no deal and this idea of potentially kind of closing parliamentary sessions through this course of I can't remember what they call it though pro-logging I think it's called is one of these antiquated kind of UK legislative laws that is used to basically mean that basically parliament then would not have an ability to disrupt or block through amendment bills which is what this article is suggesting by the likes of Dominic Grieve who's a staunch kind of a believer of eliminating the risk of a no deal there's some suggestion that Boris Johnson could look to stop that from happening and so this week the talking point is whether or not Dominic Grieve can get enough support cross-party membership within parliament to change legislation in such a way that Boris cannot then kind of close this session's parliament to remove then this threat of a no deal so that's something to just look out for I do still think that the risk of a no deal at the end of October is incredibly small and my baseline is still that at this point we're gonna roll over that until March of next year yeah, Mike's just put a link into the chat so here it is if you wanna have a look prorogation is what it's called I won't go into all the details but I've popped the link into the chat room this is on the parliamentary website it basically marks the end of a parliamentary session and so once prorogation has started it means that then no business can be dealt with or voted upon meaning that effectively then parliament couldn't block this threat of Boris's of then executing a no deal so this is the kind of new buzzword that you'll like to hear surrounding Brexit the other things to be aware of then is as a headline point who's gonna take over the job at the IMF remember Christine Lagarde is gonna be I think it still needs to be ratified but more likely or not will be the ECB president so who's gonna replace her as managing director of the IMF and latest reports would suggest that Mark Carney, the Bank of England governor of course is now the front runner to be considering the top job at the IMF again similar, you know whatever your feelings are about Mark Carney he is incredibly well qualified to take over that job here's a guy who academically graduated from Harvard masters and PhD from Oxford University worked for Goldman Sachs for 13 years all in global different roles and locations then works as the deputy first but then the governor of the Bank of Canada and now the Bank of England for the last several years so you'd be hard pushed to find someone more qualified or more capable than Mark Carney to take that position which I think probably at this point maybe a bit early to say but I reckon if he's up for it it's an absolute shoo-in and I would say what does that mean for market prices or really nothing what does it mean though I think importantly from a top level if we are gonna go through this late phase cycle in the business kind of long-term economic cycle then we're probably gonna go through some quite challenging periods for monetary policy and fiscal policy if the economy is heading for this almost inevitable downturn and I think it's very important for the management of the global economy by all the major institutions and not just commercial and banking but by central banks and also other third parties like the IMF that you have really capable people running the show and I think Mark Carney would be very important to appease to that puzzle given the economic difficulties I think that are on the horizon over the next kind of 18-24 months alright that is it from me like I said didn't really look at the charts because Sam's gonna do that job so I'll hand you over to him I'll see you in the chat room and I wish you a good week ahead thanks very much thanks and hope everyone has had a good weekend let's have a quick look over the decks here which is just pushing higher as Amtler's mentioned that pivot providing some key resistance so far that gap field didn't take too long post eight o'clock but we're keeping an eye on that just above the pivot the highest price was before the close that we had on Friday and in turn obviously keeping a close eye on how that's gonna affect US equities as well which had an interesting close to Friday we obviously had the jobs numbers which led to a push down to what was a really key point from earlier in the week below the third but the previous high of the second that offered a good level of support after a brief false break on that but certainly today around the pivot you can see we had some decent price action there earlier it's a bit of a line in the sand perhaps could well be that area above there we could be looking at price looking to reverse the touch and obviously the 3000 which offered good support initially on Friday morning before that 29.98 or just below that where we had resistance back on the Friday evening though those would be obviously areas to have marked up and potentially any trend lines from those all-time highs or near enough the all-time highs to that area and that looks like it come in around some previous resistance that we may have had to the downside the S1 that Friday low the key level 29.73 on the futures that would be an obvious point to have marked up as well just having a look at price if it was to get down there you could argue the lows of the day this potential trend line and support that we had back on Friday afternoon as well around 29.77 and a half could also be of interest to have a look over the currencies we had a decent push lower on Friday in my opinion was a bit of an overreaction so I would be not necessarily looking to go too aggressively short but all long in that respect but also just waiting to see what the market tells me what's going to go on and what better place than looking at what was the previous low on Friday of the jobs number before that breakdown that sector's resistance today so 112.96 a pretty nice level as a gauge where if we go above that then yeah sure we can look to get towards the pivot if that holds we might start trending down again and just dropping this a bit lower here you can see relatively choppy price action so far however one opportunity was on the break earlier on so it'd be interesting to keep a close eye on what happens on the retest of this trend line however Monday post on farm payrolls it's never ever really that exciting to get involved and trade too much so you know be careful with those entries wait for the levels to get tested rather than being more aggressive would be any advice I would say so even around this area you could argue well we've just come back down to test this trend line as well so not a bad point you don't need a massive stop on it if you were to take something like that on today to the upside with the euro and any of the dollar pairs just keeping an eye on those breakdown levels before the release did come out of course you can see we had that initial push through we did snap back but then continued to go so 118 around 118 20 area on the euro dollar and also what was a nice level of support in the morning of Friday and Thursday as well 113 36 and it is similar for the other dollar pairs you can see the pound which obviously is keep pushing lower at the moment but any retest of these previous support levels will be key to guide whether we can continue to go down or not one market that has had a go at reversing more than others that is dollar related is gold however not far away from that really key point 14 11.2 I've got marked up or 0.3 to be specific on that pre low before non farms about three bucks away from that so definitely worth having that marked up on the chart how we react around there is obviously key and then if we do push on any of these trend lines that might well come into play as well for gold Aussie dollar quite an interesting one that I was looking at more longer term you can see I'll just remove the pivots and stuff just from the highs that we've had in previous times sort well more so I mean obviously we had that low that came in but also the, let me see if I can get that on here we go from this high here I was wondering where it's gone up from the high of January 2018 it marks up with the April 19 high and Friday's high was exactly on that third test of that level so we now have a trend line in play there on the Aussie so if you do feel that the opportunity to get long Aussie dollar is one that interests you above that trend line would be a decent trade just considering we now have this in play we have this trend line that's been clearly looked at so any more tests and breaks and closes above there we can see a bit of a rally higher but that's just one to keep an eye on maybe for the remainder of the week or days and so on to come but worth keeping that marked up on the chart as well quick look over at oil just to wrap things up you can see that breakdown that we had on the second we are starting to drift back up towards some of those levels which could offer as some resistance we already had the test of the low of the 28 but if we can get back above there around the R1 around the low that we had back on Monday as well 58.35 that would be somewhere I would have marked up as well as we're just looking to break out this mini sort of two day and then this morning's range as well to quite a key point that 57.78 failing to close above on Friday and again this morning just struggling a touch of course that being the low of two Fridays ago on the 28th as well so a bit of a bit of clearing perhaps to go if we can get back above there and it can spread its legs whether it would do that today or not I'm not too sure just given the Monday after non farm payrolls likelihood is it's going to be a slow day as people also coming back from that's their longer weekends for independent state in the state will be quite interesting to see what happens around 230 and then you know when the Americans come into the market as well as populating things just to see what they do think in regards to the jobs numbers which obviously be expectations but we had to miss elsewhere unemployment and wage numbers as well so that'd be quite interesting to see whether we can get that reversal or not which I might be favored which I am favored to see but only trading that should it come into play as usual any questions please do let us know we'll get the strategy report out before midday as well but yeah any questions please do let us know I hope you have a good day and a great trading week