 Hi guys, good morning. I hope everyone is doing well first day the 31st of October otherwise known as Halloween The fake Brexit day, which of course has now been pushed down to 31st of January and The last day in office for Mario Draghi and actually John Burko as well So an emotional day across the markets, but looks to be a good one certainly on the calendar Another jam-packed day. We'll have a quick look over the charts from yesterday the headlines that brought us to where we are So we're best prepared going forward. Just having a quick look at those charts and bringing Here on the left-hand side. You've got the EUR a dollar Middle top gold bottom T-notes and S&P on the right-hand side You can see overall the markets have taken the the Fed cut as expected of a 25 basis point They've taken it as an overall dovish reaction Initially hawkish as EUR a dollar came under some pressure as did gold S&P and T-notes only to reverse into the back end of the session and the S&P printing a new all-time high late last night Hitting 30 55 will come on to the importance of that area shortly as we know That is near where the trend channel comes in so overall You can see a dovish reaction in markets today whether that's gonna be long lasting or not I think is gonna be up for debate. There's a long time to the next meeting. I think 41 days of the top of my head until December Meeting so a fair bit of data to come between now and then And for the Fed to make their decision and what product will be priced in will be priced in also yesterday I'm just gonna bring S&P into the full screen now couple of comments Around the the Chile summit and spiked the S&P lower. I'll just bring this in unfortunately Not much can be done about this the the algos taking It as the fact that Trump and Xi would not be Meeting and signing the first part of that deal negative stocks only to realize it was cancelled because of civil unrest within Chile and actually it's the the first cancellation of 31 years But of course, this is where Trump would hope to sign a deal. There's been no Clarification where else they are going to but there's no real negative fallout from this and The algos effectively got it wrong and we went back to exactly where we were Within the five minutes. Also yesterday data-wise we had all numbers out Earlier than expected Other than usual, I should say of the 230 Released as highlighting out there Let's put a little circle where it came out a bigger than expected draw 5.7 million forecast of early just over just over half and and we came under significant pressure Getting us down to the low that we had from yesterday and beyond only to find support around 5450 and push higher in in late trade mainly thanks to the weaker US dollar as well also a couple of Points to make note before we get into the Fed and the brexit update was a Rumour reported by the Financial Times on Twitter anyway that Nigel Farage would be stepping down However, if this is not true that Then definitely remains a problem But on the idea and comment that he did the pound did push higher spiking higher You can see here Let's go back to last night really starting from around sort of 650 and beyond this also was the time That the US dollar started to a week and again though So a bit exaggerated on that and there's been no Confirmation concrete confirmation that Nigel Farage in the brexit party will be stepping down which of course in theory would Help conservatives take more of a majority and less focus Elsewhere on that so just going over to the headlines and a Tweet from and this was going back to To Tuesday just on the cause of the general election So Nigel Farage tweeting at last deadlock in Parliament is broken brexit now has a chance to succeed While that may be true I think that it's only true if conservatives get a majority So we said this yesterday in the briefing that perhaps the biggest hurdle for a deal Coming to play is this man and the brexit Party so this rumor would have been met if true with Definitely pound positive on the idea that he's not going to be looking to take some Seats away from the the conservatives couple of comments overnight in the To bring this in the Daily Mail of course so ignore the the only way as Essex headlines on the right-hand side I'm sure you're not that interested in those but Nigel Farage Saying his brexit party will target labor leave seats rather than Tory ones to clear out the remainder Parliament Amid conservative fears that strategy could still deny Boris Johnson the majority on paper that would would be fine But there's certainly some analysts and research has that are Saying they're concerned on the pound at the moment some even saying they're short Just due to the fact that but Nigel Farage could be The four in this push to to gather a bigger majority, so Nigel Farage was saying this and speaking actually to the Financial Times yesterday So that rumor probably was fake and it would still be one I'd be looking out for But here are some of those seats You might not be able to see this here we go This is a zoom in the top 10 marginal seats where the brexit party could split the Tory boat and Therefore hand victory to labor or Lib Dems so this is on the flip side of perhaps Nigel Farage's plan if he Was to go down the route and target in these 10 taking away from Tories The votes and obviously labor or Lib Dems could could come away with a bit more of a vote And of course the the will go over a couple of pound scenarios, but anything other than a conservative majorities is It's going to be I would say Well, I guess if the Lib Dems were to Hold a massive surprise then you'd see pound positive But basically if the Conservatives don't get a majority I do think will come under a bit of Pressure for the pounds and and that's kind of what we're saying here in the Bloomberg article as well The headline says it all pound investors biggest fear on snap UK election isn't Corbyn and it's all about Nigel Farage But let's just have a quick look through some of the the worst and best case scenarios for the pound and just before we do so I'll bring in the The pound chart and I was and we what we up to now and it almost 130 and I was saying yes I think we over by the time we get to December the 12th I think we get a conservative majority and I think we come up to 135 just the resistance from the beginning of March and of course September last year big level big hurdle to get through the 130 by we feel we can continue to push up Or be a help by maybe a bit of a week a dollar as well Let's have a quick look over these scenarios the worst case Brexit party coalition So the biggest issue over the last six months for the pound when we started coming down was the idea that no deal Has a higher chance of happening. We saw us reach 120. Yes We reversed since then but that's no deal been taken off the table if Brexit party come in and with the coalition They're going to be pushing for that So to keep it simple that is going to be bad for the pound And therefore increases the chance of no deal while I still think no deal is you know your 1% 2% It has to be priced into the markets if they were to get in I still think that would be a buy the dip situation later on but that's just going to be Gonna be a nightmare if that was to happen for for the pound And obviously conservatives and Boris Johnson as well best case Johnson wins Brexit deal So and this is very much what the markets you would say it's just Expecting I wouldn't say it's fully priced in because there's of course the uncertainty of a general election But this would be the best case Johnson to win a majority and the analysts here saying our central view is we probably assume That Johnson does manage to cobble together a government and he gets the deal through Who expects the currency could rally more than 2% to 1.32 sort of sort of midway between? My target and where that would go So we'll we'll see over time how that comes through as well I guess best best case scenario and this is unlikely of course Would be no Brexit no deal not no deal no Brexit and the pound would rally quite nicely and I Would say this is more a Lib Dem win rather than than Labour and this is what they're saying as well I was surprised Labour win could see the pound fall in the short term But in coalition we would expect Labour to be more moderate than maybe feared like we saw with Sereisa in Greece So yeah, I bet the best case is no Brexit and no hard left Economic agenda, so I think if if Labour were to pick up in the polls You see you'd see pound come under a bit of pressure But it would again I think if they were to get into a you know a majority or a coalition with Lib Dems and you would see pound Push higher eventually. I do feel that would be The case so one to keep an eye out on on the whole Nigel Farage Brexit party Obviously over the coming weeks. There's gonna be plenty of poll updates and and and so on There was just one I saw earlier probably not on my Twitter anymore Let me see if I get it up and it was a poll done if there was a referendum tomorrow What would it be and leave 46 remain 54% from Survation, but of course, you know read what you want into polls at your peril, especially after the Well the last election the last Trump election and of course the referendum as well moving on to The Fed from last night Cutting a quarter point so as expected to keep it short and sweet They now believe rates and policy is about right so they pause There's they're saying they're gonna pause and they would have to see a material miss In data and everything else to start cutting again They would only hike to fend off high inflation, which they see expectations Currently on the low side. So we cut rates for the third time July September those previous We're now looking to hold rates in less data worsens And we would only hike if inflation improves a lot more than we were expecting in summary Going forward as with July and September George and Rose and Gren dissented prefer to keep the rates on the hold probably again worth over the coming weeks Just keeping an ear out for them. Are they now gonna turn ultra hawkers and actually say next year We could even get a rate cut at some point markets were pricing yesterday before the announcement another cut last Well in in the middle of next year Traders have unwound those bets certainly for a December meeting and next year as well as as the Fed saying They are they are on hold but with that big gap with 41 days until the next Meeting the data is going to play a big part You also have the economic forecasts in that December meeting which we didn't have yesterday along with the rate projections Making it unclear yesterday. It does how many non-voters on the committee had also penciled in a reduction So December is going to be a key one probably one of the last real key events of Of the year along with we see here. So yeah is 41 days next day a length of December And then of course on the first day you're gonna have the general election So they're probably up right up there the 11th and 12th as a really key time for Markets in in general some comments from pal The well when he said there well in the statement before we go on to those those comments They altered their language and this was the rumor thing that they were going to do and it came to fruition That they're dropping the pledge to act as appropriate to sustain the expansion and then they added a Promise to monitor that monitor data as it assesses the appropriate path of the target range for the federal fund rates power went on to say he believes monetary policy is in a good place And then we see the current stance of policy is likely to remain Appropriate as long as an incoming information about the economy remains broadly consistent with our outlook And then so if we go back to the charts, let me just bring in We'll start off with the euro I guess it's not a bad one to have a look at here and it's gonna bring on the pivots to give us a bit of time Make it clearer so you can see and now I'm gonna put this on to the five minute at this moment We were still really pushing down and it wasn't until he started talking Unbelievably the market here is basically saying what we're not gonna cut We're not gonna raise rates now and the dollar weakened. So these comments From from from power saying we would need to see a really Significant move up in inflation. That's persistent before we could we've considered raising rates to address in Retrace inflation concerns. So this Unwind of the the hawkish cut that was perhaps expected on the idea that they're not looking to raise rates anytime soon unless Inflation markedly improves, which is not expected to do and then euro pushed higher the low coming in on that date on the futures around 111 13 and we just moved up 70 hips or so from then and we confirmed a push this morning as well on the S&P You can see pushing higher overnight Although just drifting lower a touch from that all-time high gold Saved really as well because those levels the way it was trading down at really key if we can get a close below there And then we are really looking down to the 11th and below so gold help But we are just hitting some key resistance Traded from the low the 25th so key level traded in gold and now above the 1500 handle Back to the headline. So we were basically to finish up in in that summary There it was a hawkish cut turned dovish on the high bar to raising rates because of inflation Remaining muted other comments there just to go through a couple of Bloomberg economists the October FOMC post-meeting Communique proffered the possibility of additional policy policy easing but dialed back the degree of certainty through subtle language changes This is consistent with the Bloomberg economics expectation that officials would aim to preserve Optionality around upcoming meetings, even though we expect tepid economic data to ultimately Compel the Fed to act. So if we're broadly speaking right now We're quite well balanced if the data is going to be poor over the next couple of weeks and a month I guess Then a month and beyond then the Fed will obviously have to look to start changing But on the flip side if the data was really strong inflation picks up. Well, hang on We could now be looking to raise rates at some point next year as well also Well, yeah, here we can just go before we move on to have a couple of comments This is the the CME pricing in of the next rate decision. So only 17 percent expected for Ease no change expected at 83 percent January meeting. You can see relatively Similar I guess but a slight increased chance of an ease by then comments overnight Not a massive move about the Aussie has been pushing higher as with a majority of these dollar pairs An RBA board member worrying about the Fed easing and easing and how that will just strengthen the Aussie dollar And they're speaking on behalf of the RBA saying they you know are happy with how things are going But we don't want a Higher exchange rate and obviously if the US were to keep cutting rates weakening the US dollar Well, the other currencies are going to strengthen and the Aussie just not wanting this I'll just be aware Perhaps at the back of your minds if any further comments from RBA members about monetary policy in a bid to almost go into a currency war with the US and look to Devalued theirs. Let's have a quick look over at the Aussie dollar just over maybe 24 you're going back to October looks very similar doesn't it to the euro and the S&P and those loads from the beginning of October Euro and the pound I should say From the beginning of the October here and we have just been pushing higher So it's one thing to bear in mind with these currency pairs as they do push on and we are looking You know percentage wise certainly for the Aussie anyway up near 4% the pound We know it's done more than that and the euro from that low probably looking at about Two and a bit free. Yeah, two and a half. You know, these currencies do push on Worth keeping an ear to the ground on any central bank speak from Their own central banks to become perhaps a bit more dovish. I do believe in coming time There'll be a good opportunity to go short. You're a dollar short Aussie dollar on a bit of dollar strength coming back into the market That seems not to be the case. Just just for now Also overnight and it went under the radar Really, we had earnings out of Apple and Facebook Which if there wasn't a central bank meeting from the FOMC would have definitely been more of a market mover So went under under the radar both beat expectations And it's kind of like swept under the carpet now and a move on Apple's fourth quarter The company posted earnings of three point zero three per share When in expected of two point eight three Facebook two point one two versus the one point nine one Of course could go into more detail But the markets have really forgotten about that now and a case of just sort of moving on also overnight Bank of Japan Hinting they're willing to cut interest rates further Have tweaked its forward guidance with an explicit hint It was willing to cut rates further into negative territory as part of a new effort to achieve its 2% inflation target 8 to 1 majority Overall reaction was pretty limited. It was as expected in an immediate a role of the Bank of Japan to To meet market expectations, which was dealt with Quite well The decision to tweet forward guidance suggested that Bank of Japan did not want to disappoint expectations And the economy the Japanese economy was strong enough to get through a period of sluggish global demand without the need For directional additional easing yet Looking at the calendar for the day ahead. It's a two-pager Always good to see that on the on the sheet Let's have a quick run through as we go what we're coming up to 8 30 now a big chunk of data out at 10 o'clock You've got Italian inflationary numbers European GDP as well. You've got the flash year-on-year Numbers as well. So quite a lot coming out at 10 so European assets I would say from 9 30 just a case of cleaning up the order book and preparing for that Then going into midday. You've got personal income out of the US. You've got core PCG We know the Fed look at that. You've got GDP out of the Bank of Canada. We saw their reaction to rates yesterday as well. Chicago PMI 145 which is still everything an hour earlier than then normal And then you've got only one speaker with comments really have come through yet some earnings to be aware of as well, but none of the the real Big big companies are there done for the week. Shall we say looking at tomorrow? Of course We've got non-farm payrolls ADP yesterday I'm sorry. I wasn't looking at the Calendar there, but I said the times having a look at tomorrow. You've got obviously non-farm payrolls And we've ADP coming in a tiny bit expected Not really giving too much in the clue of a hint whether that could be much better or worse Obviously unemployment rate average early on is coming out as well got some Japanese data Australian data Chinese data overnight And then a few speakers as well and of course of the guard taking office Quick shout out to Mario Draghi on his last day to have a quick look over the key moments over the last What we're talking now eight years so cutting rates on the within first few days of ECB president anyone that's done the Sales and trading or don't know the portfolio management simulation from from amplifier will remember that well Whatever it takes speech cutting rates below zero QE launched And then ending back in 2018 before this new Package has come through the euro of course has been on a bit of a journey I remember when I first started trading 2014 Into 15 a lot of talk was about the euro against the dollar going to parity It's never quite materialized there Recovered a bit and then obviously we've seen the dollar strengthen over the last couple of years quite dramatically But are we have we seen is the worst now behind us for the euro? I suggest not but time will tell something nice to finish on a couple of facts on burko How much does the speaker speak so here going back to the 1920s? Proportional words in common spoken by mr. Burko and previous speakers It's not really a surprise to see he is at the top there And I'll put these on my Twitter as there's some words that I'm not even going to try and say But uses here's some of the words that he's used more times Then that no other speakers said in a hundred years Chuntering has been said a hundred and seventy three times But yeah, many of those I won't be able to to pronounce as well But shout out to to draggy to burko. Good luck to Lagarde starting tomorrow. There is no brexit today That's obviously being pushed down in summary the Fed a hawkish cut turned dovish initial reaction The pound I'll just be keeping an eye out for Farage and his comments are if the brexit party stand down the pound is a buy And of course over the coming days. I'm sure there'll be some polls to keep an eye on as well Hope you'll have a good good day ahead Any questions as usual? Please do Let us know