 Okay, very good morning to everyone. It is Wednesday the 26th of June, so I hope everyone is well Going to go through a couple of different things. Obviously. I've not been doing the briefing the last two days and so I think I'm gonna cover kind of twofold from my part from a fundamental perspective one is a bit of a view and what my take is at the moment on the outcome of the upcoming G20 summit and in particular conversations between Trump and G What do I think about that? What do I think about the outcome? What do I think about what the Federal Reserve are doing with some of the commentary we heard from Powell and Bullard from yesterday and then also a quick recap on Brexit What exactly is happening at the moment because this was kind of the twofold being here what I can update you on is the current state of play but ultimately dividing this into An assessment and insight of what I think about this but what more effectively is going to be in the second point The more focus for trading in terms of the session ahead So it's kind of view and then more of a practical element and then I'll hand you over to Sam for the rest of the Technical analysis looking at the charts though from an overall perspective things are I Guess don't look too dissimilar from what we had yesterday probably the biggest Jump on these charts and I'm sharing at the moment is the movement in WCI crude This came of course last night. We broke what was the the range of well the week I guess so managing to see a decent lift on the back of what was a sizeable drawdown the biggest since March of 2019 a draw of just over seven and a half million in the API crude oil infantry So decent move higher in oil overnight. We'll have a look at those numbers in a bit more detail shortly otherwise equities Equity futures Europe a little bit negative just following the kind of the downward move we saw Yesterday on Wall Street. We kind of held on to that move for me, I don't actually think that you know if I just look at the daily continuation of the The S&P 500 this is kind of encapsulating the last 18 months and I don't really think that a little bit of a pullback after that retest that we had after that really aggressive run over the last couple of weeks is Too unexpected You know without any kind of think in the way of fresh catalyst I don't think there was much need for us to really bump higher and now the Fed have showed their hand now We're kind of waiting for the Trump and G meeting Then you know kind of defining that range I think is is probably appropriate what we have been doing at the moment Which is kind of these price bands going forward until we get more clarity on those top level macro kind of events So equities. Yeah, a little bit of a pullback Continuing I'd say as we get down to that lower bound though of that range Potentially could see even more narrow consolidation the closer we get to the the significance of that meeting at the end of the week In the currency markets touch a dollar strength So the major pairs are a little bit lower. You're a dollar top left down about 13 Cable down about 23 and around the lower bound of its Range from overnight, which is also just below the low print that we had late yesterday evening in the futures market On the back of this again the comments out of the Fed will look at in more detail in a second But certainly this idea of a 50 basis point rate cut is being Almost taken off the table now by the Fed just looking to tame some of the expectations that were so Drastic in the Fed becoming ever more aggressive in this rate cut Scenario that's not to say that they're still not going to cut that still is the baseline expectation But just kind of reining it in slightly from the over extension Perhaps of how the market interpreted the information we got from the central bank last week So that's kind of overview. Let's have a look at their headlines and what we have And first of all starting off with the Brexit situation Obviously, I read at the weekend News not only about the personal life of Boris Johnson, but about the fact that he had used Steve Bannon the previous strategist of Donald Trump highly kind of an interesting character in In terms of his views and and the use of his skills and the association with him does raise a few eyebrows But that the comment I thought from yesterday from Boris Johnson was absolute Bannon work if I've ever seen it and it's this kind of Trumpism I'd call it of Johnson using the type of language There's very much been a successful marketing strategy for Donald Trump in terms of it being quite a powerful message You know, the other person who adopts this quite naturally in very well from a UK Politics perspective is of course Nigel Farage and you know, it's it's this use of language that I think is Particularly powerful when speaking to the the broader national public and Johnson yesterday said makes a do or die pledge to leave the EU on October 31st, so it's this kind of Dramaticizing the the event making it feel as though, you know, really capturing this disdain for the government's Mishandling of the inability to deliver Brexit and trying to just really fuel that up to the max to get everyone on board So obviously on the back of this what's hunt strategy? There's no point going against that hard line. You might as well adopt the complete opposite And that's pretty much how that this to two horse races being Defined at the moment kind of the hard Brexiteer against the more Kind of measured hand in in the form of Jeremy Hunt. So again, lots of different Called hustings or meetings that are happening. So lots of coverage going on how much is the pound really responding to this? Well, I guess maybe a little bit of further No deal risk does need to be priced in although that largely has happened given the fact that Johnson is such a Clear distance front-runner in this race to become Prime Minister the more he kind of ups the anti the more I think, you know in the next coming weeks Potentially that kid act is a bit of a renewed headwind for sterling as As the prospect of a no deal becomes even more acute. However, I still think that this is like Trump Johnson is just saying this for political payoff rather than actually a material Kind of threat in that sense Now one of the things obviously that's come up here if you read some of the articles I was showing with you guys this morning This is something that Boris talks about a lot. It's something called article 24 It's called GAC 24 sometimes referred to this is the GAT stands for the general agreement on tariffs and trade And what this basically is suggesting it offers a way to avoid tariffs and border restrictions If the UK leaves the EU without a deal the provision allows WTO members engaged in trade Negotiations to discriminate in favor of each other without passing along those benefits to all members However, the provision cannot be unilaterally invoked and the EU is unlikely to agree to it because it would compromise The stability of the EU's external customs border and Furthermore any WTO member could object to such an arrangement and demand it to be modified so This is one of those You know, this is what makes Interpretation of Brexit a little complicated because of the general legal structure of how complicated a process it is to leave the Eurozone and particular with issues around the border with Northern and the Republic of Ireland, but one of the things here is that you know again, this is one of those Areas of which Boris Johnson will be pushing this because in logic, this would be a good solution to basically if you have an agreement you can go into this kind of Limbo period where all things remain the same until you can get something more concrete over the line the point being those that The EU aren't going to accept that or agree to it. They've made that evidently clear So as much as it might make sense in principle in practice It's not going to happen and this has even been ratified not just by the fact that you've rejecting this idea But the UK's own trade minister Liam Fox has also Dismissed the idea of this standstill tariff free EU commerce deal. It's been downplayed by people in industry It's been downplayed by the governor of the Bank of England But again, this is one of those things where you know kind of the Boris Johnson like Trump, he knows that this is not going to happen But it doesn't really matter when it comes to cajoling public sentiment because by by giving these options There's not many people in the mainstream Joe public who's gonna be really bothered with reading the legality around the Lisbon Treaty and Article 24 So it doesn't matter from a public Management of perception point of view, so I think you know Boris is clever guy He's playing this in a as I said in a Trump fashion So to get support on his hard Brexit line, but ultimately I still believe and you know, I again I could be very wrong that the prospect of a no deal I still put in terms of how Johnson is threatening. I put down at between five to ten percent So obviously a possibility, but I think still incredibly unlikely on an average on Wall Street What do the US big banks think of a no deal? I had I did have a look at the weekend and the spread I think was Nomura is at about 20 percent. Goldman's is at 15 percent I think there was one bank that was a bit more punchy at 30 percent So, you know averaging out at about 20 percent, I'd say Okay, that's enough on Brexit because ultimately as I said, this isn't really so much of a pound sensitive issue However, the you know, how far the envelope gets pushed on the hard Brexit line from Boris over the coming weeks Could well start to weigh to a moderate degree. I would say And again same things apply as last week should he make any type of large mistake Making a comment in appropriately and that it starts to give hunt a bit more of an advantage I'd be seeing that then as the the kind of opposite could be pound friendly However, it would need to be a kind of monumental misjudgment from Boris for that to occur. I would say Moving off that let's have a look at the other and the kind of bigger global macro issue here that's dominating sentiment day today and that is the one of China and the US and the US is set to delay more China tariffs ahead of Trump Xi meeting So if you remember the US initiated that 25 percent reset of tariffs in the previous amount They threatened to do 300 billion of Chinese imports But what's happening here is that basically the Americans have said well actually according to people familiar with these Conversations the US could be willing to suspend the next round of tariffs now one of the things here that happened before was that the Trump administration put a fixed 90-day Kind of temporary freeze on the tariffs coming in now I think that that won't happen again because Trump it will be in his Favour to prolong I think this current stalemate for as long as possible because Obviously timing is key and he doesn't want to Sam's been referring to a couple of times in recent briefings He doesn't want to shoot all of his bullets at once He wants to manage the market's response in a positive fashion in time to fit his political calendar So with that being said, I think the strategy if I was an advisor to Trump would be Okay, you can definitely Freeze this current but keep the it's kind of the stick and a carrot approach, but do not put a Definitive time stamp on this even though it might be akin to 90 days You basically want to roll this on as long as possible keep the market Effectively where it is at the moment and then in months to come Start to to get closer to an agreement being done In detail not principal and then for the market to get another secondary lift on the back of that so One of the things is and I was talking to some of the the stage two guys here yesterday Was if you look at the S&P here I think as well not only is this a pullback on some profit-taking of the exceptional rally that we've had and obviously instigated by the Federal Reserve last week, but this idea of kind of buy the rumor sell the fact Beginning of last week was so positive with Trump tweeting talking about extended conversations with China and so on at the G20 The market bought into that and immediately reacted and we got up to retest those all-time highs I think this is very typical of human behavior that kind of over interpretation of that statement Markets rally you get the Fed coming in committing to cuts that gives it that secondary lift You hit that profit target at the all-time highs now Realization kicks in as we were saying about a week ago in the Monday's briefing a week ago You know, we don't see any type of deal of Significance getting done at the G20. It's just not going to happen. There's so much unresolved complicated issues All that we're expecting is that basically They commit to continue talking so if anything the markets already repositioning for this and I think all that we can expect is the fact that Yes, the US are gonna delay any tariff hikes I think that's to be expected and they'll probably commit to another point in time in the coming weeks months where they'll continue this negotiation The point being is then we kind of get a little bit of that positivity just fading I guess the the risk factor on the G20 is What if something happens between now and them actually sitting either side of a table That means that maybe the entire face-to-face meeting gets called off if that happens That's quite a significant step back from where we're currently priced and that could lead to then a break of those That quite you know key technical area probably around that 11th of June high the retest on the 19th and close to where we are at The moment that could open up potentially a bit of a further pullback Probably be looking then down through the 2900 handle to 94 and then and then beyond Probably then 67 and a quarter which starts to bring in some of the previous price action as well down here But again This would all be contingent on the lower probability of the fact that something happens and that the actual face-to-face meeting gets Completely called off which I'm not anticipating overall What does this mean then for the Federal Reserve? Well pal spoke yesterday and obviously what's going on with the trade war is at the forefront of Federal Reserve Members minds and the hence the reason why they've become so overtly dovish of late Now what's happened here though as the headline would suggest the Fed has pushed back on aggressive US rate cuts In particular not so much power It was more this chap which was if I scroll down sent Louis Fed president James Bullard now those have been in markets Long enough will be very familiar with James Bullard He is the outlying dove at present But he does tend to be incredibly vocal and of all the Federal Reserve members Existing at this present point in time. He's probably the one that alters his view and flipping flops from being Overtly uber dovish to just mildly so and he's kind of done that again So James Bullard on Tuesday said he does not think he does not think the US Economic situation is dire enough to warrant cutting rates by a half percentage point at the next meeting in July So don't forget This was the guy that a couple of weeks ago said that he would be open to 50 basis points now Winding it back and saying well hang about that's actually not true And if you remember when we were discussing the preview for the Fed meeting last week There were a couple of couple of big banks and bond funds out there that were anticipating Potentially the 50 basis point cup could be the next move But if the uber dove is not backing it now It's basically not going to happen because if he is the most furthest removed then the neutral and majority amount There's highly unlikely gonna. They're gonna back that policy move. So for me as much as this is bullard You know kind of flipping his view a little bit and altering his perspective. Actually, I think that this is a broader coordinated communication from the Fed in order to Rain in Market expectations, which I think are a little bit overdone on how aggressive they think the Fed will be remember The Fed that the downside strategy to doing a 50 basis point move Or be it it might get you ahead of the curve and have bigger impact in the short term But ultimately you are rain you are you're bringing down your available room for maneuver for future policy action in terms of The interest rates. So yeah, I actually think that this is Powell and the team talking to Bullard saying well look You're a good person now to to bring in some of basically this expectation This is the federal funds futures, of course. This is looking at the CME Fed watch as to Ascertain market probability of for a 25 to 50 basis point cut The one thing that is still evidently clear here as far as the markets are concerned Despite this slight alteration in Fed communication. We are still fully priced 100% for a rate cut at the end of July The question mark being then do we go 25 or 50 and the market is priced at the moment 73% for 25 and The smaller minority 27% for 50 But what I would be expecting and obviously the outcome of the G20 could be pivotal to this in the short term But beyond that up until through July into the meeting all things remaining equal Then I would expect that this 50 basis point one would decrease and this 200 to 225 federal funds range will increase Which would indicate that they're really going to go 25 cut not 50 Okay, quick look at other news headlines and I'll hand you over to Sam These were the numbers from last night if you remember I did show you the The graphic of all the charts of WCI crude which did jump overnight Breaking some of its near-term range of the week and this was because we had a drawdown of a large magnitude and in fact Considerably larger than what markets were expecting and marking the biggest drawdown in the headline figure since March Cushing a draw of one and a quarter million gasoline a draw of three point one seven million and distillates a build of 160,000 so that kind of sets the stall of course for The DOE all infantry's which we'll get later on this afternoon at 330 and the other thing to mention was we did have the Reserve Bank of New Zealand the RBNZ They kept interest rates on hold They said lowered the OCR may be needed over time and noted downside risk to employment as well as inflation But also sees inflation rising to 2% And if anything actually you've had a bit of an appreciation of the currency This comes after actually the rate hold was as anticipated, but they did cut rates Remember not so long ago markets are still priced for a cut But maybe some of the language around that accompanied this decision not quite so much to commit to Or unwinding of any immediate move as far as today's meeting was concerned So Sam will look at the Kiwi, but the Aussie obviously tends to move in sympathy with this And if you were looking at the Aussie future this morning It's been grinding up and it's had a bit of a retest of the high print that we saw from yesterday's session That coincides with the R1 and the 70 mark In the Aussie dollar future So maybe worth keeping on and don't forget as well we've had that news in regards to the US Says who are believed to be set to delay the Chinese tariffs And that also to some degree removes some of the tail risk about the imminency of Of the escalation of a trade war and that is a net positive for Aussie as well As a proxy for China's Chinese economic health All right calendar wise quick look Just to wrap up my part and for this morning it is particularly quiet There is not a great deal going on. So With that in mind, I definitely would be Taking that into consideration with any strategies and potential trade opportunities for this morning in terms of your Your profit targets and your general aggressiveness of trade But getting into the US session as nearly always the case. That's really where You'd be looking for the best kind of Market movement I would suggest Given the fact of the current macro kind of stories in play being so kind of trump trade focused I'd say the the conservative leadership races are very much a political event at this point Not so much as an impactful pound situation for the here and now So for the US afternoon, you've got durable goods is your main 130 advanced good trade balance as well And the oil infantry numbers of course at 330 speakers An interesting one But just to clarify for any of the newer guys You've got bank of england's mark Carney and mpc members cunlifton raro and saunders all speaking at 1015 this morning Now just to be clear. This is part of a tsc Tsc sat stands for the treasury select committee So this is where the bank of england senior members of the mpc have a periodic meeting with members of the treasury Who basically are asking the bank of england? Why is it that they're doing certain things and how are they looking to manage certain situations? Very rare for the tsc hearing to Provide anything in the way of groundbreaking new commentary. It's not typically used as a platform for that type of policy communication or a kind of new insight into economic Kind of interpretation. So I would be aware of this But I wouldn't be looking at it as a as a kind of an absolute tradable event to that respect All right, we're going to leave it at that and let's get let's get sam on the mic And he can look at the charts in more detail for the day ahead. All right guys. Thanks very much I'll be in the chat room and available throughout the the rest of the day Hi guys. Good morning. I hope everyone's had a good week so far Let's have a quick look over the charts. I think gold come up with that Double bottom trend line that's been on here. You can see just spending a bit of support In this market, I guess you've got to ask the question I'm just going to remove the some of the lines here is have we just hit a top Or not as this a short term recovery bit of profit taking As well to be seen to the upside I guess if you if you do believe there's a long Still in this you can see the s1 Previous low of the day yesterday's lowest is quite a key level Key point to be monitoring Above that then sure we can push back higher and you've got to Imagine we'll we'll be having a a quicker move above there So 14 14.1 quite a key level for gold almost a line in the sand if you're unsure of a bias for this market Well, that's your that's your key. That's your cue to see whether where price is going So keeping a close monitor on that level there In what has been this an extraordinary run to the downside if we were to see a break of these lows You can see just below that We have the the lows that we have back on the beginning of the week So actually, you know not far away from being pretty much flat For the week after such an extraordinary run not many people would have would have fought that but uh, yeah 14 point 14 14.1 the level to keep an eye on To the downside if we were to the upside if we were to break through that you can see there's other key Resistance points and actually the market has been pretty technical As of late even last night when we had the breakdown you can see the trend line Put that on there decent break decent opportunity The r1s and r2s acting quite well yesterday as well So quite a technical market having a look at the the euro dollar From a purely technical point of view s1 does look pretty Importance putting this on the the 60 minute you can see around that area Well, just above it. You've also got the the high the low from yesterday the high from The morning that we had or the early after afternoon on the 21st as well So pretty pretty key zone The pivot is actually pretty important as well was the low that we had back on The monday and then tuesday around midday as well So pretty key level and then to the upside some of it a quick look here on the 15 minute especially when You're looking for a continuation either way this case to the upside Will be worth having that trend line on from those highs a really key resistance area for today Is pretty much now the pivot the trend line the previous levels of what have been support and then turn resistance last night as well So pretty key zone from the pivot to the s1 And that's somewhere i'll be focusing on For the early part of the morning, but as i mentioned it's going to be relatively quiet So no need to go too aggressive on the market Being squeezed from the high here the pound you can see Quite well respected if we have this trend line on from yesterday evening's higher point Which was also the previous low of the day another market. That's been quite well respected You can see just getting squeezed through here On the pound when you put that on a higher time frame you can see maybe not looked by as many people However, if we put this trend line on from those lows, you can see we've found quite good support Around here this morning. So looking here starting back on The the higher point of the 17th we broke through a couple of days later And it's been well respected on that first test back today So keeping a certainly on the futures around just above 127 on this trend line if that was to go quicker move down to 127 and the s1 Somewhere i would have marked up s1 not far off that low that we had on the 21st as well to the upside And if you want to maybe get a faster money move This trend line breaking that we mentioned could be worth A shorter term trade But for now price just getting squeezed in a touch Aussie dollar being dragged higher by the Kiwi which is actually Will come on to a moment but is on a key level itself The Aussie here to the upside and mention obviously r1 Quite an important point and you can see we just dragged these trend lines on just a bit above here You've also got the round number the 70 How do I be keeping a very close watch on on what happens at this point here really key resistance? The move could also obviously push on if we were to to go above that But for now just coming look looking like it's gonna gonna test that level to the downside Areas of support obviously previous highs of the day before that breakthrough 69 87 s1 was a level we talked about in the briefing if I just go back to that with The the low from yesterday afternoon and the previous high That obviously came down late last night to get filled whether you would be trading around there Obviously trump was talking power was talking I would have had to almost have your orders waiting and and have been a bit lucky as well that Kiwi Is pushing and you can see here that similar Price action from those previous highs with that trend line if we just draw that up You can see that is literally just been hit now. So it'd be interesting to see how this holds do we come back down? Do we hold as a third test on this trend line? And therefore perhaps later on we could be looking for that level to break higher and that could be the opportunity to get in there having a look at the s&p and I'm going to start firstly on the The the longer time frame here pretty important where we closed yesterday. So I'm certainly a longer term equity bull and we'll you know Still believe we may and and get to 3000 certainly in the s&p But the fact we closed below the the highs that we had on the 18th and 19th of june 2936 Pretty key pretty key. So I would say, you know, that's your your line in the sand for any Any further push higher would have to to go above that level to the downside 2915 is important I like the look of a medium term long from 2905 and 2900 just because I'm going to move the 2915 You can see just the importance of This area haven't come back to really retest it yet Whether we can get down there or not in the coming days remains to be seen having a look at the This more medium term you can see just the importance of closing below the level I mentioned at 2936 really nice support on those first tests. We then broke through yes a bit choppy, but now we're below there Our favor looking to get short a bit of a line in the sand. Maybe Could be the the previous load yesterday at 2926 and a half You can see was the previous load yesterday. We broke through and price just quite choppy around here You don't necessarily want to get too involved just below today's low You have the low that we had back on The the 19th which is obviously quite a key point. So here would be the key levels 2915 2905 2926 and 36 just above the pivot point. I'm going to a quick look at oil to to wrap things up Uh, just coming down a bit here Um, the pivot previous hire I do like the look of whether we could make our way down there I'm not too sure. Obviously got the DOE's later But you can see was the hire that we had back on the 24 good price action around there Around the 25th. So there'd be a targeted area 5820 I quite like the look of as a place to get long also having a look at the lows from Yesterday and the date the previous session before that quite well respected from a trend line point of view Which as it would stand marks up quite nicely around there Whether we can get to that point in at the same time remains to to be seen At the moment, it's just breaking a touch lower Obviously not near the lower the day as of yet still about 26 or so to go and still up a dollar actually from where we open I believe so api obviously a decent push hire be an interesting DOE because of that And going back to that calendar could well be certainly, you know With a quieter morning the focus is on the afternoon and durable goods and advanced goods trade balance aren't ones that are going to rock the boat as such So maybe the the DOE at half free is the main event Other than you know your cup of bank of england fed and ECB speakers throughout the day Any questions as usual? Please do let us know Relatively subdued open on the on the DAX doji Of the 30 minutes and and more for now But yeah, any questions, please do let us know I'll be on the chat obviously throughout the day But I hope we have a good trading session