 All right, good afternoon, ladies and gentlemen. Welcome to this non-farm payrolls webinar on Friday, 5th of November 2021. Through the course of this presentation webinar, I will be covering the numbers as they break, looking at some of the key levels for the various markets, but also I think looking back at the events of the last few days, because I think more than anything what's happened since Wednesday has, I think, diluted some of the importance of today's payrolls report more broadly. That's not to say that it won't have an effect in terms of where the markets are likely to go, but I think the Fed's actions this week have to a larger degree. I think taking some of the, taking some of the urgency, if you like, out of how quickly the Federal Reserve is likely to payback its bond buying program. So I think when we look back at Wednesday's Fed meeting and compare it to the shambles, which was the Bank of England's meeting yesterday, I think it's important to look back at how not only it's affected bond markets, but also equity markets as well. Now we can see the immediate effect in terms of the UK guilt yield, but not only did yesterday's decision by the Bank of England make bonds much more bid and send yields sharply lower. It also shifted the dynamic quite starkly in terms of the timing of when we can expect the first rate rise. And I think one of the things that is particularly notable about how yields have reacted is it's not just been a UK centric thing. It's also manifested itself in the US 10 year, obviously not to the same degree. That was the two year I was just showing you this is the US 10 year, but we've seen a similar sort of move in the US front end as well. We change that to US 2 year. The Federal Reserve also pushback expectations of a possible rate rise as well. Now obviously the effects haven't been as dynamic, but nonetheless what we've seen I think is that we've seen a rate hike rethink. I think that's probably the best way to describe it. And in so doing, it's given a much more buoyant flavor to equity markets in general, but it's also shifted the calculus somewhat in favor of the US dollar. Because it coming into the beginning of this week, Sterling had a bid, the Australian dollar had a bid, Euro dollar was neither here nor there, no one really expects them to raise rates anytime soon. But it was really in terms of the timing of when the first rate rise was likely to happen. The events of the last 24 hours have sort of pushed the expectation of a UK rate rise, right out sometime in the middle of next year. But unfortunately, given the shambolic nature of the Bank of England's guidance or steering in terms of expectations. I think there's a widespread distrust now of what policymakers have to say. Andrew Bailey had perfect opportunity yesterday to reset the narrative from the Carney area, Carney era, and the unreliable boyfriend. But he failed, he failed abysmally and his, his sort of rather dismissive attitude that it's not in the Bank of England or it's not in his remit to set market expectations about interest rates was mind bogglingly naive. But it is his job. And if he doesn't think that it is his job, maybe he needs to go back and look at the job description, because it's every, every central bankers job to signal their guidance intentions when it comes to monetary policy the Federal Reserve do it very well. They're not perfect by any means. There's an awful lot of debate as to whether or not they're behind the curve, but more importantly, they set market expectations. And when you get a move like that in the yield curve, or in the yields more generally, for me that's simple, a matic or emblematic of a central bank failure. It's a failure of communication. Who controls communication central bankers do. They didn't push back on market expectations that we were going to get an imminent increase in interest rates. When they should have done, if that's what their intention was, and ultimately now you've got a central bank, a Bank of England central bank, whose credibility is shot to pieces. Which means that, you know, the signal to noise ratio has diminished quite significantly because central bankers rely on signaling their intentions to the, to the wider financial markets about their rate rise and their expectations of their monetary policy expectations. You're the Federal Reserve. Jay Powell pushed back quite gently about the notion of an imminent rise in interest rates, even though an awful lot of members on the FOMC still think we'll get one in potentially the second half of 2022. But nonetheless he guided them back quite gradually. And as a result yield started to come off on the US 10 year and the two year. So for example, with the way the UK guilt yields have come off. There's your difference right there. You know, it's pretty stark now your UK yields can come quite a bit lower, which suggests that we could well see potentially a little bit a little bit more sterling weakness over the course of the next few weeks. So what does that mean to the dollar? And what is today's payrolls report signal in terms of how the dollar is likely to react? Well, ultimately, I think if we get a decent report, then the narrative or the debate will shift. The debate will shift to in terms of how fast the Fed reduce the amount of the monthly on buying program at the moment they're reducing. Or the schedule to start reducing it by $10 billion of US treasuries and $5 billion of mortgage back securities a month. Which should mean that the taper finally rolls off towards the third quarter of next year. However, that timeline could shift because they could increase the amount of bonds that they reduce if the labor market data is very strong. Or if US inflation expectations continue to rise. And that's why next week CPI numbers are very, very important. So there is a potential for this fall in bond yields that we're currently seeing to find a little bit of a base. And it'll be very much data driven as it should be. It should be data driven the whole point. But at the moment, I still think there's potential for a little bit more weakness in your short term. Treasury yields maybe back to around about 0.35. So it's another seven basis points from here on in. And that could come through a number of different avenues. It could be as a consequence of weaker than expected inflation numbers, which are due out next week on the 10th of November. We've got US CPI or it could be weak payrolls numbers as we head into the end of the year. Now, I'm not expecting either of those things to happen in the short to medium term, which means we could see a little bit of a tick back to 0.45% in US two year yields in the short to medium term. But yeah, markets don't move in a straight line. So it could take a while to pan out. But overall, I don't expect the dollar to dip too far, given the change of narrative that we've seen in the past few days. So we could well see a little bit of further weakness in yields, but that's also likely to mean that we're potentially likely to see further upside when it comes to equity markets in general. We've seen a record high for the DAX this week. We've also seen new record highs for the S&P. Now, if I look at this chart here, I can see that now that we've bought 16,000, that is likely to be, I think, potentially a fairly key support level between 15,800 and 16,000 on any dip lower. We've made a new record high there. Based on my premise that resistance, once it breaks, becomes support, you would expect 15,800 to basically be a fairly key support level. And if we look at this daily chart here, you've got 15,990 years of low. We can come a little bit lower, but if we look at the previous highs, this 16,000 level was a really tough nut to crack. We closed above it yesterday. We need to continue to close above it today, supposed to weekly close above 16,000. If we manage to do that, that should be risk positive. S&P 500, again, it's very much by the dip. Yes, that looks increasingly parabolic, but, you know, and for those of you who are thinking, you know, try and pick the top, try and pick the top. You could get lucky and pick the top, but I generally try to avoid standing in front of a runaway train. And at the moment, that's what this move higher in equity markets looks like. It looks like a runaway train. We are going parabolic. That doesn't mean that we can't continue to go higher. So for me, it's very much a case of by the dip until such times that you've got clear evidence that we are going to get one. And none of the markets on here are showing me that they're inclined in any way to stop going higher. We look at the FTSE 100. You know, that 7,180 level that I've identified in numerous weekly videos over the course of the past few weeks has proved to be fairly pivotal in terms of once we broke above it. We've continued to hold above it, and now we're above 7,300. Now, I want to see a move above 7,300 to be consolidated to hit my end of year target, which still remains 7,400, but which potentially we could go quite a bit above. And let's look at where we are relative to where we were at the beginning of 2020. We're still well short of it. We're the one major index that hasn't been able to recover its pre-pandemic highs, hasn't been able to do that. Now, there have been any number of reasons for that. But at the end of the day, that suggests that if the pound is likely to remain slightly on the softer side, that should be generally supportive of the FTSE 100 more broadly. And obviously it's being helped by the fact that oil prices are at sky-high levels as well, along with natural gas prices, which is helping the likes of BP and Roddatz Shell. But I digress. In terms of the last of today's payrolls report, let's have a look at the CMC dollar index. You know, we have gone up, we've rebounded off these series of lows through here, and we're on the cusp of potentially breaking up through here. Our dollar index is slightly different to the U.S. dollar index simply because it gives a much lower weighting to Euro dollar and a much higher weighting to the Chinese and NIMBY, which means that it's not going to be a carbon copy. But certainly I think in terms of what we think for the dollar index, the proxy for that for me is Euro dollar. And Euro dollar continues to look very much towards the downside when it comes to where we go to next. Now we've broken that channel. I'm going to remove that so that it's not cluttering up. But for me, the key level on Euro dollar is this low down here. It's 115-20. If we can hold above that today in today's payrolls numbers, then we could potentially short squeeze all the way back. So even if we get a good payrolls number, I think it's unlikely unless we break below 115 that we'll see further losses in Euro dollar. I'm still bearish Euro dollar. I still think we're going to get a move back to 114. The big question I think is do we get it today or do we get it next week? And as with anything in Euro dollar, it's all about timing. And for me, given the fact that we're close to these lows here, I really wouldn't want to be shorting Euro dollar. At these sorts of levels, I'd be wanting to see a squeeze back to the 50-day moving average and this downtrend line here, because that's where I can manage my risk most effectively. If I sell Euro dollar here, I can run a tight stop if it breaks above the 50-day moving average there. If I sell it here, I can still be right, but I'm going to have to absorb a massive squeeze potentially all the way back here. So for me, when I'm looking at trading a particular market, it's all about levels, always has been about levels, minimizing your loss to maximize your profit. And selling here at 115, 30, 40 or wherever we are at the moment to basically take profit around at 114, it's not effective risk management because you're risking all of that all the way back to 116, 80. You're risking 150 points to make 150 points. It makes no sense to me whatsoever. The more sensible trade would be to buy with a stop loss at 114.90 for a move back here. It may not be the right trade, but at least you're mitigating your downside in anticipation of a potential bounce towards the upside. And as we're trading any market, it's about minimizing that risk on a loss basis to maximize your profit on the upside. So it's going to need to be a stupendously good number for the dollar to basically push higher and push Euro dollar below 115. Given where we are and given where we've come from this week, I'm not sure that we can do that, but you never know. You never know. But for me, the key level is 115, 10, 115, 20. You might get a bit of an over spool down to 115. But for me, I think if I'm looking to trade Euro dollar, I'll be looking for a little bit of Euro strength dollar weakness and get back in if it trends back towards this trend line resistance through here. Cable slightly different story, though again, always susceptible to a short squeezes cable, as I know only too well from my own trading days. But again, 134 cable, big, big level. If we break 134, we can go lower. And certainly if we break 134, the next target from cable is around 131.60. So again, given where we've come from, given the fact that we're coming into a weekend. And I'm I've become more reluctant to run positions over a weekend simply because of the risks of gapping. You know, central banker opening his mouth and being careless with his words. I generally tend to be more risk averse. Maybe that's an age thing as I've got older. I've got a little bit more risk averse than when I was then when I was younger. But ultimately, that's essentially, you know, my bias in terms of the way I look at the markets at my age. It's about being an old man, either I get them all the time. So 134, that's a big level. If we break below 134, it's going to potentially trigger a load of stops. But I wouldn't expect it to be sustained in the in the short to medium term, which brings me on to euro sterling. Euro sterling, above the 200 day moving average. But look at these series of peaks through here. We're very much in a range. We held above 84. If we can get above 86, I still think the air is a bit thin above 86. Should find a little bit of support around about 85 40. But overall, it's very much a range trade for euro sterling. Okay. So what are we expecting? We've got three minutes to go. So I'm going to go through the numbers with you. We had a disappointing number last month, 194,000. That was disappointing given the fact that all of the stimulus measures were starting to roll off. But I think it was a little bit too early. We've looked at weekly jobless claims. They've come down quite consistently. Continuing claims are at 2.1 million pre pandemic. They were 1.7 million. So continuing claims are only 400,000 above where they were in January and February of 2020. So certainly the US labor market is improving. It's not really been reflected in the payrolls data. So at some point as we head into November and December, when temporary hiring picks up quite a lot, you are going to. You should see a pickup in hiring. Now the expectation for this month, October rather is for 450,000. I would not be surprised to see a little bit more than that around about say 500 or 600,000. But it also wouldn't surprise me if we saw a slowdown. The ADP report that we saw earlier today was not only today earlier this week was around about 586. So you would expect payrolls to come in more or less around that sort of level. The unemployment rate is expected to fall from 4.84.7%. What's going to be particularly interesting and particularly important as far as I'm concerned is the participation rate. We want that to go up because that's around about 61.7% as opposed to 63.7% in February 2020. We want to see people return to the workforce. An awful lot of people have retired or not returned to the workforce yet simply because I think they're still living off their stimulus benefits and what have you. But overall you would expect with the dropping of the stimulus beginning of September for October to see an awful lot of people return to the workforce. Manufacturing jobs in the ISMs came in better than expected. The employment component for that was fairly positive. Services was slightly weaker. And I think it was important when we looked at last month's payrolls, the September ones, was that services jobs didn't really see the rebound that we were expecting to see simply because of I think concerns about COVID, the prevalence of the Delta variant and what have you. So as I say, the headline number, yes, that is going to be important. But for me, it's about wages, because if more people return to the workforce, wage growth should come down a little bit, but also the participation rate should go up. So I think the best thing to watch the market reaction on payrolls is to look at dollar yen. And at the moment, we're getting a little bit of a bid heading into the dollar. So let's just do that now. So we've got dollar yen. So expectations are for 450. Numbers are due out right now. And that's the Canadian numbers that we're seeing. I don't want to see that 4.6 unemployment rates falling back. Average earnings 4.9, 531 fairly decent number, but as a big upward revision to the December, sorry, December, the September numbers, a big upward revision, which in my morning, no, I suggested might happen. So that's a fairly decent number, but it's pretty much in line with market expectations. So non-farm payrolls, 531, better than expected at 450. You're going to get a brief move higher in the US dollar. What I don't expect it to do, though, however, is to push us significantly below the lows that we've seen in euro dollar and cable. Having said that, I could be wrong, but dollar yen certainly showing a decent bid to it. If we then zoom that back out, we can sort of look to try and find out how much higher that can go. As we can look at dollar yen here, you can see that I've drawn a peak all the way through 114.75. And you can see why when I do my morning note and my daily analysis why I've used 114.75 as my resistance level going forward. If we look at dollar yen over the course of the past few days, if we look at the highs from yesterday and the day before, it's generally topped out between 114.20 and 114.30. I don't expect that to be any different. So looking at dollar yen, looking at euro dollar, I would expect the lows for euro dollar to remain intact. I would expect the lows in cable to remain intact for this week and for us potentially squeeze a little bit higher. Now, I got asked about Aussie dollar. I would expect to see further weakness in Aussie dollar. But for the time being, we're finding a little bit of, we should find a little bit of support in an around 73.30, 73.20. Let's have a look. It's interesting that we broke, we failed at the 200 day moving average, but we also failed at this Fibonacci resistance level here on my daily chart that I drew a few weeks ago. If I go and draw some Fibonacci retracements in there now, I can work out what the resistance levels are or support levels are now for the Australian dollar. And we can see 73.30 is a 50% retracement of the entire up move from the August lows. So I'd expect a pullback in the Aussie dollar to around about 75, 73.50. If we break below that, then obviously you then got 72.80. But overall, I think the bias has changed. We could well see a little bit more Aussie weakness going forward. And if we get a squeeze back to around about 73.80.74, then I would expect to see a few sellers come in and for us to drift back down to the 73.30 level going forward. So hopefully that answers your question about the Aussie dollar. So the Aussie dollar should weaken a little bit further over the course of the next few days as the dollar gets stronger. Let me just get rid of that. Canadian dollar you also asked me about because obviously it's the Canadian jobs report as well. Again, we're running into a little bit of resistance on the 200 day moving average on the Canadian dollar. We have started to find a little bit of a base. I think we'll struggle to get much above 124.80 today. And also we've got the 50 day moving average just above that. But overall, I would still expect the Canadian dollar to weaken a little bit over the course of the next week or so. Assuming assuming that Brent crude has hit its short term highs now. That's a big assumption to make, but a weaker oil price is generally not great for the Canadian dollar, given the amount of money Canadian companies make from the black stuff. And the reason why I'm a little bit bearish on oil prices, even though no one else is, is purely technical analysis charting based. And I know some of you will probably roll your eyes, but let's look at Brent crude. $87 had that level for quite some time. Why go back to the peaks that we saw back in 2018? $87 was the peak back in 2018. We came back from there. We haven't thus far managed to break above it. What we need to see happen now is for Brent crude to break back below $80 a barrel. Now, at the moment, that doesn't look like happening. But if we look at the weekly chart, we're on course for the second successive weekly decline in Brent. So, you know, it really is a question of US inventories have been rising week on week. Rick counts have been rising week on week. We hear an awful lot about the US administration talking about having a go at OPEC. You know, you've got to increase production. You've got to do it faster, blah, blah, blah. I'm completely ignoring the fact that the US shale industry is probably one of the biggest industries for crude oil production in the world. But it doesn't suit the political narrative of the Biden administration to encourage renewed investment in shale. That being said, the Rick counts in the US have been going up week on week. They're at 544 last week, the highest level since April 2020. And as long as they continue to go up, then I would expect the US prices could well start to roll back down. Certainly, I think in terms of where we are at the moment, people are expecting a much higher demand level. The biggest concern at the moment is the Chinese economy. And at the moment, there's no clear idea of what's going to happen there with respect to Chinese demand and demand more broadly. But if we look at this chart, for me, it's difficult for me to make the case for $100 oil while we're below the previous resistance levels. I'm not going to front run a break on a chart like this. It just basically goes against everything that I think technical analysis should be about and always should be about. Now, if we look at US crude prices, we've seen a similar sort of tail off. Now, if we look at this trend line through here, this might give us a little bit of a clue to that particular uptrend has come to an end. And it's interesting that we have broken below $80 a barrel. And this candle here is particularly interesting. Why? Because we made a new high yesterday from the previous day, but we closed lower. So that for me is a classic signal that the market is a little bit long in terms of oil futures. Now, that doesn't necessarily mean that we can't continue to go higher, but it's a warning sign that positioning is stretched in terms of WTI. And therefore there is a risk that we could actually head back towards $75 or $76 a barrel. So if we do, if that does happen, then obviously that's going to weigh on the commodity currencies more broadly. And as such, currencies like the Canadian dollar. So you could well see further US dollar gains, Canadian dollar weakness. So hopefully that makes some sort of sense. Particularly if you, if you frame it in that sort of context. But overall, I think in terms of today's payrolls numbers, they're generally fairly positive. Let me just get rid of that. It's a bit after the Lord Mayor show that alert, never mind Bloomberg. In terms of what we've seen today, payrolls numbers fairly positive. Pretty much in line with the more positive numbers and more encouragingly we saw a significant upward revision to the September numbers from 194 to 312. So what happened with the participation rate because I think that more than anything was one thing that I was particularly interested in. And the participation rate is pretty much stayed where it is. So 61.6 no move there at all. Average hourly earnings 4.9% jumped from 4.6%. So again, that's broadly broadly dollar positive. So I'm hoping that I've covered everything that you've asked me to cover. But is there anything else that you ladies and gents would like to ask me about where I think markets are potentially likely to go over the course of the next few weeks. I would say that next week we've got US CPI for October. That's on the 10th. And that's expected to rise to 5.8%. From the 5.4% that we've sort of seen over the course of the past three or four months. And if we do go to 5.8%, that will be the highest numbers since 1990 highest level of US inflation since 1995 5.8%. Core prices are also expected to rise from 4% to 4.3%. Again, highest numbers since 1990. Okay, dollar max. Oh yes, Steven, that old favorite. Please tell me that you're not still in there. Am I right in thinking it's still going your way? Good to know. That's good news. That is good news. So again, you've got to follow the trend with dollar max. Stronger dollar should mean that we'll continue to see gains there. I'm guessing that you didn't get out when it popped up to 21 then. And that you're still, that you've still got it. But yeah, I mean, I see no reason to be particularly bearish about dollar max. We're still in the uptrend. We could start to run it. I think one thing I would say is that that 21 level is going to be a tough enough to crack. Why do I say that? Well, look at this here and here and here. It's really struggled to push above that. And as a result, you know, it's going to be very difficult for me to envisage a scenario that's likely to see it go much above it, particularly if we zoom all the way out there. That's not to say that it won't, but it's had three, it's had three goes at it, or two goes at it since it was last up there in March this year. All I would say, Stephen, is you've got the patience of a saint when it comes to that. Why is there a discrepancy between the trend of soybean and soybean meal? I've absolutely no idea on that question, simply because I don't really follow commodity markets, you know, or agricultural commodity markets more to the point. So I'm sorry, I can't answer that question, I'm afraid. Gold, I can certainly answer that question. If we just do that down. Gold, here we go. The problem with gold is that it's very much a yield play. And if we look at what it's done over the course of the past few months, it's traded in a range. It's been consolidating. Now, in an ideal world without Bitcoin or Ethereum, I think you've seen much more. I think you'd have seen much higher flows into gold prices. But unfortunately, you're not seeing that. And in comparison to Bitcoin and Ethereum, it's a bit boring. No one really wants to trade it. And you can sort of see that in this chart here. For me, gold is very much a range play between 1810, 1820 on the upside. And buying it in the low 1700s, I really can't get enthusiastic about it. If I'm honest with you. Now, being asked about the Kiwi, the Kiwi, well, I mean, the rate hike's out of the way now for the RBNZ, which means that obviously people are now asking the question, you know, how much higher can it go? But I suppose it really depends on when you think the next rate hike is coming from the RBNZ. And I think this week's events are potentially set the case for that back. We've got a big resistance level as well around about 72 cents on the Kiwi. So for me, I think we could we'll see further weakness in that. If we look at this trend line here, then there's certainly potential for us to fall all the way back. I mean, you could conceivably argue that this is a double top on the Kiwi, which means that we could well trickle down quite a bit more than we already have. I had two goes at that 7210 area. So let's do a little bit of now if you work on the basis that's potentially a double top through there, then we could well see a move back to measuring that from there. So those highs are 7217. If we take that level there, 71, you could potentially see a move back to 70 without undermining the bullish case for Kiwi. And you've also got to contend with the fact that the dollar is probably likely to remain fairly strong as well. So 7220 is a big, big level. We haven't been able to crack above that. More importantly, we've broken below 7130. So to reinstate the bullish case for Kiwi, I would have to argue that we need to move back above 7130 to retest the highs at 7210. If that makes sense. Anyway, so that's my view on the Kiwi. The bullish case appears to have broken down in the short term, and you might need a little bit more of a correction down to 70 cents before we return for a move towards the upside. Okay, so that's, let me see if I've missed anything. I don't appear to. Okay, so I think that's pretty much it for this week. I also recorded a week ahead video, which should basically go on the website around about 4pm, 4, 5pm later today. You can find that, or you can find all my musings and what have you, under Learn News and Analysis. And that's all here. So that was one morning note from 5.30 this morning. Obviously, there's quite a bit of stuff going on yesterday. But the week ahead normally goes in down here. So that will appear down there later today. Obviously, that was for this week. Obviously, we'll also be writing an end of day report on this particular page as well. So when I drew the Fibonacci Retracement, can you please, which chart are we talking about, Mustafa? Was that on the Aussie? Aussie, that's what I thought. The reason I drew it there was because it was the lowest point of the previous cycle. So the previous cycle low is that low there. So that's why I drew it there because that's where the rally from, that's where the rally started from, from there to there. I mean, I could conceivably draw it from there. It wouldn't be the wrong thing to do. But for me, whenever I draw a Fibonacci Retracement, I try and use them sparingly because they don't always work. So I use the cycle high to the cycle low. So the cycle low was at 7106, not these twin lows here at 7174. So that's essentially why I drew it there. For no other reason than it was the cycle low. Okay. So let me just close that down. I didn't mean to do that. Never mind. Just pull them back. There we go. All right. So if that's all, ladies and gentlemen, I'd like to thank you for your company today. I hope it was informative. The webinar was informative. And I'll be sending you a follow up email with feedback and what have you. I'd be grateful if you could leave me some feedback. You know what, you know, how you like the content, whether or not I should have covered other areas that you would have liked me to cover. But essentially that's why I tend to use the Q&A to try and basically address any issues that you might have. But overall, that's it for this week. Thanks very much for listening. Have a great weekend. Enjoy the fireworks if you're going out to watch a fireworks display. Otherwise, I'll speak to you in a month from now when we cover the November play roles report. Thanks very much for listening and have a great day.