 Okay, very good morning. Hope you're doing well. It is Wednesday the 17th of June Just before I begin don't forget to like and subscribe to the YouTube channel if you're watching this there It's your one-stop shop for everything from fundamental and technical analysis But also check out Amphitrading.com just looking at the website here if you scroll down you can find Different kind of action points depending on what your needs are so whether you are looking to become a professional trader or a student looking to Gain some practical experience then there's relevant sections and then on the trader page if you scroll down There is actually our on-demand e-learning portal of which if you just start now you can get access to a couple of Free taster sessions, so do check that out But let's just talk about the markets and what's going on this morning And if anything I would say it's it's kind of like a consolidation from what has been a fairly bumpy ride over the last few days that being the kind of catalyst of a sell-off that we had last Thursday with renewed fears kind of Priced in of the potential second wave and still the virus needs to be tracked very carefully But then obviously we've had a big bounce so far this week and and yesterday a period of relative Consolidation so as far as the charts are looking this morning at the open. It's fairly flat index futures and marginally positive The S&P up about four ticks the DAX is up about 18 Gold is basically flat the 10-year down about three ticks and currency pairs also flat So all in all My overall view I mean I'll talk about some of the individual stories that are in play this morning certainly there's a few growing tensions on various different geopolitical hotspots globally but there's not too much in a way of Kind of directional view that I hold this morning specifically and so in the situation like that I prefer to just kind of mark up the charts and let really the market price dictate actions In that sense and not really try to to force a view like the markets are overvalued The Bank of America hedge fund kind of surveyed it came out yesterday was talking about how all these investors think the market is oversold You know try not to get too drawn into that and just kind of trade what you see in that respect until we get the next kind of catalyst and the catalyst as it has been over the recent week or so Likely to come on any virus type updates. It's probably the main thing But let's just have a look then a couple of the headline stories Stock futures drift after rally so kind of as I've described This is one of the the kind of headlines in the morning Beijing moves to contain new outbreak in Florida Cases jump so authorities in the Chinese capital city have reported 31 new Coronavirus cases as of today They've ordered all schools to shut and imposed restrictions and more than 1200 flights in and out of Beijing have been cancelled so certainly the story of which we were talking about That did weigh on markets initially at the reopening of trade We had the gap down on Sunday night and the initial selloff and European Open on Monday that still is a Situation in development at this point but authorities, you know, one of the things about why naturally a second wave typically is smaller than the first is that the authorities are in a better position to act more quickly and Also general public awareness for the matter is now increased And so there should be an ability to react in a more appropriate way in a more timely fashion So that's not to say that this has been resolved and certainly China are taking these measures very seriously But we'll have to continue to monitor that and then in Florida Infections reached a new high Texas or hospitalization surge as well So some of those key areas still warrant watching but I'd say at the moment not enough to kind of spook the market like what we saw Last Thursday, I guess last Thursday was kind of even though those Rate trajectories were kind of getting more steep. It wasn't really a real market focus at the time Attentions were kind of scattered elsewhere, but now people are monitoring this more intently. They kind of know the daily Incremental changes that we're seeing from a pretend percentage point of view over the seven-day average And it's not enough at this point to spook the markets beyond of what we already know. So again, we monitor with great vigilance But markets seem to be able to digest this now and of course it comes in the context of a couple of different things We've had Jerome Powell speak Yesterday giving the initial kind of Senate hearing in his testimony talking about the US economies a long way to go before it reverses the substantial damage from the pandemic so Interlating towards this kind of mildly dovaged stance that we heard from the Fed last week with that dot-plot Indicative of interest rates in America staying basically at ground zero for the foreseeable future until at least through 2022 Then you've had the Trump administration the one trillion infrastructure proposal You've had the Fed started buying individual corporate bonds And then of course you had US retail sales come out yesterday and wow, what a number I mean, it was it smashed the kind of top ceiling of the most optimistic estimate and It's so crazy, you know looking at these charts the last 20 years of some of this statistical data You know, we've never really seen anything like it a Catastrophic drop and then an almighty recovery so, you know question marks of course about Whether or not that could be sustained and and and probably not up to the degree in which it printed yesterday But certainly as well that helping just generally offset Then the kind of still, you know, there are other areas India Brazil still have got infection rates on the rise at this point in time But for the moment, as I said, it's being overshadowed by the steps taken on the stimulus front by fiscal monetary And also some of the surprising strength in the US economy And if you think about the the payroll data this data and we are expecting further recoveries off The kind of bottom-worst scenario that we had in that April numbers that are materializing now in some of the main figures reflective of the economy reopening So other than that the other thing that a lot of people are talking about There are a couple of these geopolitical stories and at the moment I amplify every summer we have interns with us and they always have quite a fresh perspective on markets Because typically they're not used to seeing things on such a short-term intraday basis and and obviously quite a few questions We're about what's going on in on the Indian China border. What's going into North Korea and you know is and why Why not is the market reacting to this and so yeah a couple of things to outline here Let me go through the details of the stories first and then I'll give you my overall kind of assessment But this is one of the main headlines 20 Indian soldiers killed in a clash with Chinese troops in the Himalayas So Chinese Indian troops have been basically engaged in a standoff for and it's intensified over the last few weeks So disputed territory in the region. This is goes back to about early May But this has been a long-going historical thing, you know, if you are aware of just general I guess history within that geographic region The kind of sovereignty of the land in that specific area is quite a contentious issue India and China They did fight in fact a border war back in the was the 1960s But since then there's kind of been a soft truce if you like the the armies on both sides of the border As part of that deal were not armed But they found other ways to obviously raise conflict and then it's it's resulted in this latest episode of which we've had Which is troops being killed which would in fact be the first time in many decades of that taking place I think since 1970 so now why is this happening and why now and so on so a couple of things to be aware of this is a Map of the area in question and as you can see here the grey matter here is China and We're back in this this kind of area which is a hotbed if you like of contention and that is because this is Kashmir and Kashmir as you'll remember going back to the Indian elections a few months ago It was all right at the epicenter of that political Kind of event because about clashes at that time between India and Pakistan, of course Whereas now what we're seeing is much more to further to the east Which is the indian-administered Kashmir and where it borders then on the Aksai chin the Chinese Administered area which includes then particularly the Gowen Valley the hot springs and Pangong Lake as you can see identified by these red dots, so This is the kind of area, but you know if you zoom this out a little bit It will probably make a little bit more sense. So here is the proposed China Pakistan Economic corridor now if you remember this quite clearly Guadal is the southern port in Pakistan of which has received an immense amount of investment directly from the Chinese government and the reason for that is This is kind of the Silk Road map zoomed in on one of the most important economic belts within the long-term vision of the Chinese infrastructure planning for global trade now in order for This to happen then China needs to form very close alliances with certain countries Now one of these has been Pakistan But as we know there is a long-standing tension in certain parts between India and Pakistan And so here then lies the kind of root of some of the recent Hostilities is because what's happening here is the investment has gone on to these south kind of ports and Arabian Sea and Guadalum Pakistan and They're helping build the infrastructure China that is from a financing perspective in Pakistan and that leads then all the way through kind of the right along the border of some of the the areas of Kashmir that of course are often a hotbed of activity for political unrest so Here then from a political connections point of view India is obviously more aligned with the USA in terms of the general political order and That in itself then has this kind of proxy element to the ongoing trade war of what's happening between China and the US now China in the US and what's been going on with say the Hong Kong security law or the escalation in trade tariffs and soy beans I mean that seems a world away from the Himalayan border But it's not really because actually the political connotations are still there. So at the moment USA a kind of they've said they're monitoring the situation It was kind of similar if you remember when there was Confrontation at the time with deaths between India and Pakistan in the in the Kashmir a few months ago And the USA were highly reluctant Really to get too involved because they know if they do then it's going to be met with resistance from China And then that in itself could jeopardize the overall trade war. It's just another element To make those talks more problematic. So, yeah, that mean there already is a There's a there's at the core of it There's a problem about sovereignty first and foremost between who owns these specific areas between China and India and then there's this more top-level bigger picture story The under lies it which is that between the US and China and their alliances strategically in that area So I hope that makes a bit more sense from a geopolitical point of view The other thing of course then is South Korea now North Korea blew up an inter-Korean liaison office near the country's border with the South And that was what two days ago or so now Pyongyang has rejected a South Korean offer to Send a special envoy for urgent talks and reiterated plans for its military to re-enter the border areas. So North Korea Here has definitely ramped up its kind of aggression on the peninsula interestingly as I've said many times before whenever you start to see Somewhat of a material breakdown in the communication relationship between the US and China It's almost the similar to what we've just described with what's happening with India and in the Kashmir There is actually a problem there between the sovereignty as we said between China India There is a problem here between the border and between the North and its Alliances of which they have with North Korea typically with China and South Korea typically with America So here then lies the same problem You have this kind of suspiciously accurate Correlation between hostilities in the peninsula to the the current Kind of context of the ongoing trade negotiation between the US and China Normally the worst it gets the more hostilities you start hearing coming out of North Korea now I'm not trying to be a conspiracy theorist here Suggesting that China are at the heart of trying to order Kim Jong-un to do whatever he sees fit but what I'm saying is that China definitely have the ability to better control and Maintain peace and order within that region and so if they like and they see fit They can back off a little bit that allows Kim Jong-un to be a bit more assertive and aggressive against other parties Namely here the South and that's problematic because that in itself is almost a test on America because of America's alliance with South Korea Again, I know this is all probably Going perhaps a little bit over your head for some of you But but certainly no geopolitics is is a fascinating subject. There's a book. I highly recommend to everyone to read It's called the prisoners of geography. I'll put a link into the video So you guys can check that out, but it explains all of this, you know, none of this is new You know tensions in these regions have been ongoing for decades If not hundreds in some case thousands of years, you know, it's just history repeating itself in a modern context in this respect Bringing it back though to trading. What does it mean for markets today? I? think very little and The main reason for that is because really two things for one as I've just said with that last point. These are not new Particularly new episodes. Yes, they are escalation from where we have been Particularly in the case of India. It's been, you know, I guess the best part of 50 odd years since we've had deaths related to the sovereignty on that border in the Himalayas, but That doesn't know markets at the moment are focused on other things if there was no virus if we were not in a pandemic if The stock market was not so disconnected at the moment to Main Street You know, if there wasn't these other things happening then you're sure geopolitical events such as this nature could have the propensity to move markets at the moment the way I see it is that they're just Not important enough to overshadow the bigger Subject matter at play at the moment, which is how is the economy going to perform under the guise of the pandemic? And then that is related to then what is the performance of the virus and what is the reaction from authorities? I central banks and governments to counter at this that at the moment is still a way bigger focal point for markets not unless something extra ordinary happens with the situation But as we've seen many times before Even with North Korea, you know for some of you blowing up a liaison office might look when you watch the pictures or videos a little bit punchy It's not actually that Unusual to see that kind of aggressive Event unfold in that region. So yeah, we track these things. We have it in the back of our minds. It's not Something that we completely disregard but at the moment I would not see that as a factor That's just going to turn the tide of risk sentiment And if that were going to be the case, it would have already happened and it hasn't which kind of supports that view Anyway, so yeah, hopefully that makes a bit more sense in how I interpret this type of information This is then something else coming off completely different subject I'm going to talk Brexit just for one moment and another good kind of lesson I guess I can I can give you because again, this isn't important so much for the pound today from a training perspective But hopefully I can explain a little bit how how I construct these views about over the medium term An asset might perform and this is a very useful timeline going from left to current day to right Which would be basically the end of the year and then to the end of 2022 but the end of the year being here and it gives you every fixed Predetermined milestone for Brexit negotiations that we know of at this point in time So for me, that's a very important factor because it helps me identify then how I can perceive The future news cycle to look like and the reason why that is important is as we've been discussing with these other subjects Like the geopolitics in the context of the pandemic, you know, there's all these ongoing things happening at any one point in time So if I know then when there is a big milestone event happening Well, then I can probably foresee then that in terms of this hierarchy if you like of the major macro themes One is about to potentially supersede another if there is a deadline approaching because it's kind of like a do or die Moment if you like for that subject. So for here, then it's very useful to know You know, what this kind of looks like, you know, where the potential increases in volume Volatility market positioning could occur going into generally these deadlines as the news starts to intensify as well And generally focus shifts to a new narrative So here with danska, I'm not saying that their their view is Is my view or the view but definitely I think reading A lot of different banks views about what they foresee for brexit is quite an important Way to to basically formulate your own opinion And so let me give you danska's take they're basically saying their base case, which they're assigning a 65 probability Remains a simple free trade agreement on goods Not services in the autumn. So they're looking at around this type of time And remember that's what we were talking about the briefing yesterday Some of that press in the uk was suggesting as well at the weekend that actually It's looking like they're not going to request a formal extension. I think from the The line that the uk government are following at the moment It's looking like that's not going to happen So then it's a when can they do a deal and as far as a lot of people are expecting as a baseline assumption for most banks Is that we can in fact get a deal done by the end of the year But don't think that that's just the end and that's brexit done You know, this is just the beginning It's going to be a pretty simple deal and i'm one on agreement of goods and not services So plenty more work to do but enough for the politicians to claim a victory that they've progressed Danska say they do not expect any breakthrough this summer again It's the autumn they're looking at And they say they still assign a 35 probability of a no deal brexit by year end So don't forget once we go through june the important matter here is You've now got to get a deal done by autumn end of the year latest And so here you can see the end of the year, you know last chance saloon would be The mid december EU summit, but it's the october one So potentially the new soft deadline the sixth round of negotiation Could happen here more formally and then that could lead to then an agreement in october Is what these guys are thinking but it is echoed by several other banks that i've read of late We have had some uk data this morning. So just to get you up to speed CPI came in at 0.5 percent in line with expectations the lowest since june 2016 So again the figure in itself substantial from a statistical statistical point of view the lowest since june 2016 But the markets do not care remember It's as in line with expectations a decrease In this case given the situation is to be expected So none of these numbers coming out of line and thus no reaction cable cables flagged this morning as well as it trades on the pandemic front The uk health minister hancock has come out this morning. He said they are so that number of which Needs to stay below zero to stop then this exponential growth of the virus spreading He has reported this morning and it's below one in all regions in the uk at the moment This is what you've probably read in the papers about pressure on bryce johnson now committing to reducing that social distancing From the coming two meter rule In the oil markets the final thing then to cover we did have the oil infertories Of course this comes ahead of the doe numbers later And we had an api build a 3.8 57 million. That was a surprise actually, you know if you think about it A lot of people, you know here there were expectations of storm related drop in infertories Remember we had christabelle go through the gulf of mexico Only a couple of days ago and some were expecting then that that would lead to a bit of a drawdown, but Far from the case. We actually had a build Now cushing was a draw of 3.289 million gasoline a pretty large build of 4.267 million so All in all oil did track a little lower After these numbers came out, but you know if you actually look at the oil chart here We're just in this new kind of area of consolidation for the time being and so Any kind of bearishness from those numbers counteracted by some of them the more positive Kind of economic situations unfolding like yesterday's retail sales The kind of pledges from the fed and the and the trump administration and so on So yeah, all in all markets fairly flat this morning Despite some of the geopolitical news that hopefully I've managed to bring you up to speed on I don't really see that as as particularly important for markets at least at this point in time So for now, it's kind of quite happy to sit on the hands Wait for the next kind of catalyst otherwise looking to play the market from a more technical perspective In a more range bound consolidation type pattern Unless something unscheduled were to develop All right, that is it as per usual any questions that you have Please feel free to to leave a comment love to to engage with you guys So so happy to do so as well every day going forward But otherwise have a good day and see you tomorrow morning