 Okay, very good morning Thursday 30th of April. I hope you doing well Just having a quick look then of what I'm going to talk about a bit of an update that you can see here about drone How what happened with the Fed yesterday? We've got a couple of earnings reports to be aware of Microsoft and Facebook in particular That has caused a little bit of reaction in late hours in US trade and overnight We've got some earnings reports to look out for of course Amazon Apple now reporting bit later on this evening We've also got then data throughout the day and an ECB interest rate announcement to follow up from the Fed yesterday so plenty for us to talk about and Just having a quick look at the charts of the general sentiment for the market open and Relativity steady in the currency market. You would expect this to be the case With the ECB looming on the horizon only a couple of hours away and typically even though as I'll discuss potentially no real concrete action and a similar vein to the Fed more a bit of a Pledge and promise to do whatever it takes and therefore queuing up Potentially more things to come at the proceeding meeting meetings in June perhaps So both the currency pairs. I mean euro is trading flatter at the moment and pretty similar for cable at the moment Just sitting above its pivot level Equity markets index futures positive the DAX about 122 and it follows the Nasdaq futures It's off its best levels, but still up 61 Maybe perhaps that I've had an S&P Chart marked up anyway from some previous discussions that we've had and you know What a mighty rally that we've had in US equities You know since that bottoming out of the oil concerns when price meant negative at the beginning of the prior week We've now rallied the best part of almost 10% in the S&P 500 so a Combination of different things obviously yesterday And I'll run you through that some of that Gilead news in a bit more detail. We had a technical breach of the resistance points of what we were seeing From the prior day session on Tuesday and that came a mid around when the Gilead news was hitting market and then After market well, we've had first of all the Fed and I'll explain a little bit more about that in a second but a little bit of an initial dip on I guess if anything a bit of a lack of Clarity maybe perhaps some people looking for a little bit more commitment But I don't think he was ever going to do that at this point in time given the lack of visibility Going forward about how the virus is going to perform so subsequently the policy actions are going to be needed So we had a little bit of a move down on the first part of the event with the Fed And then we moved kind of back higher throughout the rest of session then obviously Microsoft Facebook came out and that helped bump things up Late yesterday, but also a kind of rebound in overnight Asia-Pacific session. We have some Chinese PMI data as well that generally was okay domestically at least I'm just a slight fade of that as Europe come in but still positive overall. So yeah That's the equity story in fixed income not too much going on Marginally higher about three and a half in the 10 year the bund up 14 this morning ahead of the ECB Gold a little bit higher up about 20 dollars. It sounds like a large amount, but tricky one to trade really from a fundamental perspective because gold has become a little bit disconnected in that in that typical Kind of flights of quality sense because as you're seeing again this morning We've had I think technically you can see here. I'm just looking on a 30 minute candlestick You've had a retest of what was the high point that we saw just very late going into yesterday's session And we had a test of that very early in the European morning, and we're just managing to trade above there now So if anything perhaps a little bit more technical with the move Given it's a little bit counter-intuitive to the general risk appetite from there The equity movement that we've had over the last 12 hours or so, but let's get stuck into some of the headlines and Jerome power, you know, one of the reasons why we had a bit of a two-fold event here was that yeah initially Not a lot of commitment that came from the statement But then when the Q&A got underway obviously one of the first questions that the journalists were asking is that look Jerome You've deployed a lot of tools so far What else have you got, you know under the bonnet in case we have a large significant second wave of infections and The economy deteriorates even further than the new 4c and he basically said that it's looking likely that they're gonna need to Do more at some point in the future and for anyone who's new to markets. That's pretty much what we'd call the code words The nuances of central banks speak No central bankers never pre-commit. They will never specifically identify a date future in time of which They're going to take a certain course of action because if they do that inevitably There's so much uncertainty between point a and point b that they could end up then reversing that decision and therefore the market will lose confidence in that they're going to follow through on their commitments and One of the greatest tools that a central bank has which is its verbal communication Which is a tool just like interest rates and QE in a sense of how it manages market expectations is going to be diminished So here that that's kind of wording for me is prepping up then come another month or so I either June meeting. I think then you're going to start to see potentially a little bit more evidence of course about the severity of the the impact that the The lockdown of this month in particular has had And so they'll be in a better position as well to look at the virus and The loosening measures that have taken place and how the global economy is faring and they can Take a decision at that point in time. So that that was Jerome Powell the other thing of course was Gilead Sciences Some commentary yesterday, of course was firing up expectations again that potentially Remember, this isn't a vaccine as such. This is more a therapy using the remdesivir treatment that What was suggested yesterday from some of the Primary endpoints of the trials is that the National Institute of Allergy and Infectious diseases otherwise known as the NIH They said that remdesivir results indicate patients who received the therapy had a 31 percent chance of a faster recovery than those with the placebo and So this is what they're trying to do. They're trying to find an existing therapy remdesivir was actually used in SARS and Ebola so it definitely has a pretty decent track record of results But obviously in a in a different Situation in terms of an actual virus, but again, these results are very positive and markets liking that because then you know Is that going to help accelerate this reopening of the economy? Not that it's going to bring forward perhaps the vaccine coming, but it helps ease then that potential Earlier identification of these trends means that they the governments can respond quicker The thinking being and so therefore have better control on this kind of contain and delay It's kind of strategy of allowing further outbreaks in future. So definitely positive The CEO of the firm came out and basically said they've got more than 50,000 courses of the cut the company's experimental therapy packed in vials and ready to ship And as soon as the drug is authorized for emergency use by US regulators now on that front Obviously, you know going through medical sciences that these drugs coming to market go through a arduous process and very lengthy in order to get Tested through various onerous measures to ensure that they're safe and so on but in this case the federal Formal approval would likely take months and require far more robust results than what the company has revealed so far But during the outbreak the FDA Have shown willingness to clear medical products for emergency use with far less data than usual because obviously needs must if there's a pandemic and real human Casualties at this point that obviously they're going to do everything they can to fast track it in that respect So definitely worth keeping an eye on we have kind of been here before a little bit with Gilead sciences Obviously, we had a bump up in markets and then that shares shot back down again After the the kind of overall results and themselves were quite partial This seems to be a little bit further development now upon that that narrative So again quite positive, but I guess something to just keep an eye on going forward The other things then that we've had going in chronological order a couple of earnings reports of of a large market cap nature last night Which have definitely helped in the the overnight session Microsoft their shares were up 2% in aftermarket trade quarterly sales and profit was up Lifted by demand for internet based software and cloud services And if you think about it here as the headline would suggest everyone's having to Work remotely from home and of course then this meaning that you know the usage of particular internet based Software so thinking about the office and that obviously is quite a subscription model So the the the company has shifted to over recent years and that's proving very successful You know Microsoft teams these types of applications as well are very widely used And so they're benefiting on the back of that So their revenue gained 15% topped analyst estimates and obviously the getting the boost from homebound consumers at the moment The other company was well was Facebook their shares were even better aftermarket than Microsoft They were up 10% in aftermarket trade and we are talking about one of the largest companies in the world here They reported an 18% increase in first quarter revenues Showing advertising demand was strong before the actual COVID-19 pandemic hit Daily users the company's app climbed 2.36 billion in March and One of the interesting things here. They said that There was an impact from the lockdown that commenced in the middle of March in America But then more globally however one of the comments that a lot of the analysts were jumping on them What they're saying underpinned the strong rise in their shares was the fact that after initial steep Decrease in advertising as marketing budgets were generally Titans given the situation at the end of March they have seen signs of stability already in April and so again this nature of Investors market participants being forward-looking. They they kind of jumped all over that and that's what caused it at the share price to Rally so aggressively looking further forward to today, you know, it's it is busy in terms of corporate earnings So just to give you a bit of a flavor of some of the bigger market cap names to look out for again in chronological order mcdonalds reports at midday You've then got the likes of Altria Comcast Conoco Phillips all reporting at midday London time. This is and then after market That's when we get the the big boys Amazon and Apple are the two that people will be looking at most closely And we'll see whether or not they can follow suit if you think about it really Nice response in an alphabet shares that we had on the back of their earnings now Microsoft now Facebook so these really big tech names which obviously Helps them that disconnect if you like between what had been this kind of the the reality of the health of these companies intrinsic value on their balance sheet comparative to What we've been seeing in the the overall kind of valuation of the stock market which has been surging higher Even though the economic reality reality is very dire What we're getting here a little bit is you know quite depressed Expectations for earnings a lot of these larger caps superseding those things like Microsoft though and Amazon if you think about it in terms of From the consumer particularly being home bound whether working or for just generally living their lives Demands on say those two company services actually probably even more so Than normal because of this unusual situation and the fact that they're so large these companies We're talking 1.2 1.3 trillion dollars worth in market cap There's such a large proportion of their respective indices like the S&P 500 if they perform well They're going to drag up the rest of the index with them So yeah, these have been been quite important to help continue this this rally that we've been seeing over the last couple of sessions For any of the guys on the distribution list, I've sent this out to you So you'll have that in your inbox for the anti guys The other thing we've had overnight is some Chinese data. You've had the Manufacturing PMI as you can see here We had this quite severe dip on the back of the readings that would have been when China main land was in full lockdown We already had in the prime month a quite Decent bounce back and generally speaking the manufacturing PMI non manufacturing PMI have held up However, this purple line is the one I just wanted to show you really which has remained in very deep Contraction and that is new export orders. So basically what this chart would suggest with these four lines There's one it's quite disconnected and much more negative and that would suggest then that basically Domestically perhaps things stabilizing a little bit. I'm not sure if you've seen there's been quite a lot of Graphics going around about the general kind of traffic congestion rates. Now. This was something we were tracking as alternate data Back when we were trying to see the impact in China Just given really the lack of visibility or transparency with their data It was quite a good way Retricity use general traffic to get an idea of activity within those regions and and that's really shot up So definitely they're slowly returning back to a degree of normality and Domestically perhaps things okay for the moment or somewhat stabilizing But the problem is is that you know, they are still quite a heavy Obviously orientation towards exporting goods and at the moment if the rest of the world is going through this severe Economic situation and that's going to have implications on the speed of which that they can recover And we're seeing that with the new export orders still remaining heavy in contraction Oil prices. We're up another dollar and a half this morning trading at 1662 Yeah, I was listening to Sam yesterday talking to some of the the new guys and I think he made a pretty good point It was he was saying, you know, if you if you listen to Finn twit Which is you know people on Twitter who talk about things related to markets, you know, a lot of pain Out there because a lot of people were kind of so sure that prices were going to go down and they've been proved Badly wrong because you know after getting down to ten bucks where we're now, you know, we're up $7 above that almost doubled the price over the course of the last a day or so so Couple of things that people are looking at here is obviously we had the weekly infantry data yesterday Some people saying that, you know, that's the show to build but the build was smaller than expected It's like decreasing what we had seen in in in previous weeks A lot of people as well looking at the fact that you know the kind of we've been monitoring the operational rigs in the US Have been declining so naturally the production rates are also Moving lower and we're seeing similar in other countries like Norway the OPEC kind of Gulf nations as well So, you know as we go into may as we were anticipating these kind of pledges to move production lower in combination with generally their response of which Energy corporations will have to make with such a low price point Inevitably we're going to start to see a little bit of a rebalancing and as we're seeing with China You know with these traffic levels across the nation picking up again the economy in the PMIs not getting too ahead of our Self but somewhat stabilizing, you know demand and supply are coming slightly more back into the realm of Equilibrium or be it's still a little bit way to go just yet But that's what's helping underpin the oil price and its continued recovery from from very depressed levels at the moment On the coronavirus side a couple of different things not going to spend too much time on this Basically UK sizes up lockdown options and underscores second wave risk Dominic Rab, you know, I got from a political point of view and You know, don't don't don't take this as a as what I think from the market because this is totally disassociated But I do think that Boris Johnson is going down quite a Donald Trump route in a sense that for me Donald Trump if you remember he named Mike Pence the vice president as the coronavirus Sa and for me perfect strategy from Trump That means then that not only now he's issued state governors the responsibility of the reopening plans and the implementation of that The overall coronavirus dealings are Mike Pence's problem not his So as much as we know that a lot of the pressure comes from the top at the end of the day Other people will take the fall if it goes wrong and I think Dominic Cummings Obviously the the real brains behind the operation at number 10. He'll know this and I think he's adopting a similar strategy I'm unfortunately for mr. Mr. Rab I think he's going to be thrown under the bus when Potentially then if this goes wrong and that that then just sees Boris through and now see Boris having another child I think it was yesterday that was he gives another reason as well to kind of step back give rab more of the rope For keeping Boris out of the the kind of firing line But we'll see the point is here from a more markets Sensitive perspective Britain will next formally review its lockdown strategy Basically this time next week the 7th of May and that's where we're gonna be looking for more details really fantastic article in the FT today And I'm gonna tweak some graphics. So my handles here keep an eye on that but Italy Spain Germany, they've all outlined specific dates and specific measures that they want to do in order for this phased Reopening of their economy Britain hasn't done that yet Which makes sense Britain was slower locking down. They're slower coming out and given the rate of infection still relatively high in some senses Then we're gonna have to wait till May 7th But it's quite good to see then how this is going to work in practical practical terms The UK's deputy chief medical officer Vantam suggested the virus could persist for some time potentially until a vaccine is available So the idea of course as we know now is that this kind of ability to conduct then face to face It's going to have to be limited. There's going to be social distancing probably for several more months on going It's going to be a very graduated Period over the next probably 10 to 12 months until that a vaccine becomes more widely available The other countries of course Germany They're actually new coronavirus cases increased the most in four days Yesterday Merkle is due to consult with state premiers today or whether to lift more of the curbs imposed to stop the disease spreading So those conversations you might get some comments out of Merkel later on today and then from Trump As we were just discussing really If it's not Mike Pence's fault, if it's not the state governor's fault, well, of course, it's China's fault It's the Chinese virus The and he said yesterday the Chinese are determined to stop him winning another term He said that the trade deal has been upset by the pandemic however Other trade advisors it within the administration yesterday said they're still committed to getting the Previous agreement done in phase one of the trade deal. So again a lot of political posturing going on, you know I know it's hard to remember, but we do have a Presidential election happening in only a few months time So he's got he's got a marketing campaign and machine to roll out at this point So nothing particularly new they're all fitting within the narrative and again, you know, Trump is a master of this I was showing this to some of the the guys yesterday and I think it's such a good graphic to really summarise the tactical approach from Donald Trump Whether it be preemptive framing and and what we're seeing a lot of at the moment is diversion and deflection You know, if you remember when he was being or attempted to be impeached At the time that was when his his frequency of tweets Was unbelievable. I think he did over a thousand in one month And this is this is all completely going down this route And I think that's why at least all things remain equal at this point despite America and the globe going to go through Some of the the most difficult hardship in its history I still believe he's going to survive this at this point in time and he'll he will beat Joe Biden But we shall see there's obviously many more months to go The final thing I want to talk about here is the ECB Gonna cover this live obviously later But the ECB is to judge them if a trillion euro stimulus is enough So here's a here's a great crib sheet. I'm gonna tweet this as well when I finish the briefing. I always think that What the guys at ING do with is preparing these kind of infographics Which act as a bit of a matrix then to really break down What is a fairly complex event into a much more actionable parts? what I mean by this is basically they have The current stance which is in in orange and they focus on the four key Areas of policy of which market traders are going to be looking at so inflation outlook and growth outlook the interest rate and QE decisions and this pandemic emergency purchase program the PE P And it's on those four points then that we can determine how basically hawkish or dovish the ECB a being And therefore if you're training things like the euro dollar pair for example, this is what I'd be looking at The thing I always say to people isn't monetary policy Particularly now it's so incredibly complicated. I mean if you think about the Federal Reserve, you know We talk about the PE P P I mean there's about 15 others of those of which I can't even remember half of them that are in play at At this point in time and that that does increase the complexity in trying to understand the language when the central banks are talking My advice though to any trader even if you're an experienced trader as well as a new trader is Try to cut through all of that Specifically pick out the single things that you're looking for So that when you hear all the noise on the squawk or you see all the headlines or you listen to a press conference You know your ability then is you already know what what's going to cause potentially the word the phrase the sentence It's going to move markets so that you can just eliminate and be very Reactive in a in a prepared sense to be able to take action if necessary So here the reason why I like this is because you have this kind of you know more dovish scenario Going down more hawkish scenarios here RNG putting out some kind of euro dollar targets depending on the outcome Or the mix if you like that we get over these four different Key areas of policy the baseline. I agree with them Recent data suggests CPI pickup will take longer Yes, recent data suggests significant slowdown activity. Yes, we know that's likely to be the case on Interest rates and QE no change forward guidance for lower rates for longer. I Agree and the key thing here is that PEPP program Hints at an increase and scope in the June meeting. So as we were saying about drone pound fed I expect pretty much the same thing from Christine Lagarde the thing that I'm looking for here really In summary is this idea that Christine Lagarde needs to come out and basically Reiterate her pledge that she will do whatever is necessary to get the job done I think by taking the actions that they've done so far as with other central banks. There has been Quite a lot of confidence in markets restored by the scope of actions and the timeliness of what they've done But more as pal said yesterday is probably going to be needed And so we're looking for hints of that the more she hints if she was to explicit and let's say Goldman Sachs For example, they think that the ECB will go for a 500 top-up to QE this meeting They are in the minority here, but that is a possibility if they just go ahead and They they take an immediate move then to increase the QE program. Obviously that's going to have a meaningful impact on prices So, yeah, let's see how it plays out I'll be covering that as and when it has as and when it is happening Calendar-wise for today just to wrap up Through the morning a couple of different things Obviously, we've had the GDP numbers out of France already this morning Yeah, not pleasant reading GDP was down 5.8% in Q1 and Expectations were I think for minus 3.5% so worse than expected this comes of course after the GDP contraction in America Of 4.8% that's the worst decline since the financial crisis in 2008 How much is this impact in markets? Very little of course because a lot of this is already priced in and remember We're talking Q1 and people are more kind of obsessed at the moment on making those forward-looking decisions on Q2 All right, that is it for me for the moment. I can hear my My little one screaming in the background. So I'm not going to talk any longer Quickly then you've got the flash Eurozone CPI and GDP at 10 o'clock this morning. So do you keep an eye on that? It's probably One thing for any euro related assets that could create a little bit of short-term movement But be mindful any trades on the back of that would likely be short-lived People want to clear the deck ahead of the ECB, you know always despite probably the lack of Tangible outcome for many policy changes No one really wants to carry and hold risk into that event There is a possibility that they go as far as announcing as soon as today a top-up to that that purchase program In the afternoon you've got from the US then Personal income core PCE price index the weekly jobless claims of course Probably lesser impactful now than they have been in the past people very much aware now of that situation of the Unemployment and what it's going to look like for the America going forward and they've got Chicago PMI Canadian GDP as well coming out later And that's it. That's a wrap. So Any questions let me know Otherwise, I'm gonna let you guys get on and I wish you a good day ahead. All right. Thanks very much guys