FOMC LIVE - 18th September 2019

Okay, testing out the mic. Test, test, one, two. So if you can hear me and see me, then all you need to do is just put a comment in the chat. You should have a live chat on the side. We're going to wait for about 3 or 4 minutes, make sure everyone is on board, everyone can hear everything, a few technical checks. And then we will officially kick off things at half past the hour. As typed in the chat, we'll start with a fundamental preview for what we're looking out for. I'll do that myself, uh, then I'll hand you over to Sam, who you know, who can give you the technical kind of view on markets and what he's looking at. So you've got both sides of the analysis kind of covered off. But in the interim period, just having a quick look, uh, equity index futures, uh, actually a little bit of downside just as we go into the kind of final half an hour before the event.

Just looking in the index futures over here, this, uh, downside in stocks, here we go, just printing a new session low around the 2993 region. Doesn't appear to be anything crossing that explains this. Many desks have suggested that we are just now in that pre-Fed positioning sort of stage.

That voice you can hear is the squawk box that we use. We use a company called RANsquawk. Can't really do our job in terms of looking at markets precisely without having the 15 analysts that they have watching all the markets all the time. So as they were just saying, there's no new fundamental news. You sometimes get this ahead of a big event, a little bit of perhaps pre-positioning, people just lightening the load going into what can be a very volatile and uncertain situation. Better to clear the deck and then trade what you see depending on the outcome. As much as we can plan is usually the best strategy. So a bit of downside, uh, US equities, no definitive new headline though driving the price action. But as I said, we'll give it another 2 minutes and then we'll look to officially kick things off in a second. But thank you very much for those joining us so far. Again, we've got about 2 minutes and then we'll start. Okay, just before we begin, just having a good— have a quick look. Chris, hope my wife has put my dinner in the microwave. Yeah, true. I hope she has done too. But if she's put it in the microwave, that's unacceptable, Chris. She should have it fresh out the oven. I can only say that because I know she's not listening. But yeah, absolutely, it's going to be a longer day for sure. That being said, definitely, I think if you are ever going to trade this type of event, you certainly do need to manage yourself from a physical point of view as well as a mental point of view. I certainly wouldn't recommend, if you are intraday trading, to sit here from 7 in the morning and then try and tackle and trade an event at 7 PM. You're going to be too tired, essentially. So you should manage yourself appropriately. If you're an experienced prop trader, you know it's a big day for the Fed, why get involved in the morning? Better to just come in literally in the afternoon and then just trade the event should there be the opportunity. Okay, let's kick things off then. So let's get it underway. First of all, thank you very much for joining us and giving up your evening. Hopefully it's going to be productive, both that the Federal Reserve are going to potentially cut interest rates, and, and as we're going to talk through, it's a multifaceted release. So hopefully there's a lot of information, uh, and I can share with you how I'd go the best way to approach this type of news-driven event. Just to explain who is hosting this, it's myself, Anthony Cheung. So I'm the head of market analysis here at AmplifyTrading. So Sam is the trader. I'm the kind of head of analysis, if you like, in terms of our individual disciplines and roles. So it's my job to try and make sense while this event unfolds of what exactly is going on and why. And then it's his job. Uh, and Charlie is on the other side of my desk behind my screen. Uh, those guys are going to be trading the event live, so if they've got anything to add, they will also jump on the mic when the information comes out. So let's get straight into it. Kicking things off, what is the order of play? So this is what we're looking at today. Remember, for anyone new to these types of policy events, this is a two-part, uh, release. Top of the hour, 29 minutes, we get the first part, which is going to be particularly interesting because we're going to look at the Fed according to market positioning in the short end. Federal funds rate futures are indicating a fairly high probability that the Fed cut rates for the second time in this kind of classified mid-cycle adjustment. We're then going to have the statement. So this is that kind of how they articulate the reasoning behind the decisions that they've made. And so by this, they're going to describe inflationary conditions, the labor market, their reasoning about external headwinds, uh, so geopolitical events, and how do these things then influence the decision that they've made today. So that's the statement. And then importantly, we're going to get an update, as we do every calendar quarter, in regards to the Summary of Economic Projections. Otherwise shorthand known as the SEP. Now the SEP importantly provides us with information about this dot plot. What do the Fed think about interest rates in the future? And we're going to have a look at that in time. Then 7:30, uh, 7 o'clock, there's going to be a whole flurry of price action, usually highly volatile for the period of anything from 10 to 15 minutes, and then everyone tends to die down waiting for then Fed Chair Powell to take the stage, and he will have an opening address and then an audience Q&A, which can normally last between 45 and 60 minutes. So I'm going to run through a sequence of slides that will hopefully, hopefully help better prepare you for the event forthcoming. First off is this thing that traders refer to called the Fed code words. Now, this isn't unique to the Fed. This is generally a terminology that gets used in reference to all central banks. And this is how central banks use certain specific wording to determine what conditions are like, how do they describe them, and that gives us as market participants an idea about what their future course of action might be. So there's 3 key areas really that I think warrant monitoring, and I'll show you the statement as soon as it comes out. The first area is the job situation. These are the current phrases and how they've summarized that job situation is— it has been solid on average in recent months, and unemployment rate has remained low. Now we're going to have a look at some data because payrolls would be indicative that potentially the job situation wording of solid could be downgraded. Reasons for cutting last time: in light of the implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower the target range. So it's the implications of global developments. Do they add any more detail to this, given the fact we've had some escalation in trade war, we've had this Saudi situation, of course, the weekend renewed geopolitical risk in the Middle East and all these different things. And then the future policy path. Arguably, um, this is one of the most important singular sentences to look out for in the statement. They said previously, we'll continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion. It's that last part of the sentence which is quite key. They will act as appropriate to sustain the expansion. Now, acting as appropriate meaning then they're likely to add more monetary support to keep things going. Now, a few things to, to keep in mind. Now, if we go back about 6-7 weeks ago, everyone was talking and becoming ever increasingly fearful of an impending recession because of the inversion of the yield curve. The yield curve in summary inverting because of reasons like developments in a negative way of the ongoing trade talks between the US and China, more risks of a no-deal Brexit, economic data had been weakening, and so on. However, since that point, this is a graphic showing you the Citi US Economic Surprise Index. Now, for anyone who's not familiar with that, this is quite a benchmark index that people in markets look at as to ascertain basically if economic data on the balance is exceeding or missing consensus expectations. And as you can see, back in July there was absolutely reason to be very pessimistic about the future. That's because economic data was substantially missing expectations. However, since that point, as you can see, this index has been rallying sharply and importantly has broken quite comfortably back into positive territory. This meaning then that, remember in January of 2019, this is when the US indices were putting in their best rally we've seen in multiple decades. Obviously Powell changed the tone. China stepped up to the plate to add stimulus in various different ways. But data hasn't really been this positive since the beginning of the year when the equity markets were rally. So things have changed considerably, got more positive. What we've had last week, core CPI in the US showed a 2.4% increase in August year on year. That's the strongest pickup in inflation in America for 11 years. So if you're talking about cutting rates, this is the opposite as far as looking at evidence to warrant such action. We then had retail sales And importantly, for an inflation metric, average hourly earnings and ISM non-manufacturing data has all topped estimates, underlying then why the Citi Surprise Index has been moving to the upside. So these would all be reasons that have shifted then US yields off the floor back up higher. We've moved out of this inversion of yield curve situation. What it does mean though is that those that were looking for a 50 basis point cut are likely to be disappointed because no one in the market is expecting that to happen now for these reasons. Now, this is another thing that came out a few days ago. This was looking at the manufacturing— I think this was industrial production in the States. Is manufacturing stabilizing? You can see here the change in manufacturing output at 0.5% was higher than expected. If you were to X out one of the more volatile components of the last report's reading, which was motor vehicles, then underlying factory output in the US was a really strong number. Just to put that in a bit of context, it was the biggest gain since July 2018 in factory output in the US. So remember what I've been saying, if you do watch our briefings over the recent few weeks, we've been talking about consumers have remained relatively positive in the States. It's, uh, activity indices that have been weakening in economic data, manufacturing type PMI data, but they are now recovering. So again, this would warrant lesser action in regards to multiple sequence of rate cuts. However, there are a few other things that could be supportive evidence for the doves within the FOMC. One is we've had this sharp pop in crude prices. Now, um, importantly, the timing of how quickly Saudi Aramco could get their oil back online will definitely dictate on how likely, likely it is that this, this oil spike will have inflation implications, which would be more supportive of the hawks. Now, to give you an idea, analysts at JPMorgan issued a banknote earlier this week, and they said they only see crude prices hitting the consumer if we trade above $80. And obviously oil's been paring off ever since we heard from the fact from the Saudis that they've brought another 2 million back online much quicker than was anticipated. So we're well off those high levels. If you look at it on the doves case, then one thing I would say is that from a dove perspective, this is, is that geopolitical risks are rising. So although economic data is getting better domestically, certainly from an activity point of view, From the doves' perspective, well, welcome back to kind of 2016. It's not about the US economy. It's about then the surprise of Trump, but importantly, the surprise of the EU, the UK voting to leave the EU in the referendum. These were external factors or headwinds that shackled the Fed from taking action. Does this shackle the hands of, of not then taking action to cut rates? I.e., geopolitics is worsening at this point, which provides more risks to the global economy. Also, from a dovish point of view, um, I talked about the labor market earlier. Well, this is a graphic of non-farm payrolls at the top on the bars and the US unemployment rate at the bottom. The unemployment rate, I'd say, has been lesser interesting. It's been fairly consistent at 3.7%, which we know is just off record low levels. But the growth of change in non-farm payrolls has been slowly edging lower. Uh, the last print you can see here at 130, that puts the average here at 173. The last number at 130 was below estimates at 160, and the previous month was the recipient of a downgrade from the initial reading. So the labor conditions here in the number of jobs created perhaps has tailed off a little bit. But if activity is picking up, does that offset this? This is what the FOMC members will be debating. Now, there are other macro geopolitical risks. We've kind of just mentioned them. So the trade war, obviously still unresolved, um, albeit they are looking to head back into talks in the coming weeks. Tensions in the Middle East, of course, and a no-deal Brexit still on the table despite the legislation passed in Parliament, uh, just a week ago or so. What is the market expecting? So these numbers are quite substantially different if you did watch the briefing that Sam and I delivered this morning, and we've kind of almost readjusted the market in its positioning back to what is the status quo belief is that the Fed are going to cut rates today. Now the probability of that, and if you did want to further your knowledge of markets. This is basically looking at the short end of the curve, so short-term interest rate futures. So in the US you would look at federal funds rates, in Europe you'd look at Euribor, in UK short sterling. But basically it gives us an indication of how the very sensitive short end of the rate curve is pricing in for central bank changes in policy. Now, as you can see here, the, um, the kind of shaded box is the current Fed funds rate, 2 to 2.25%, and the market is priced by a 72.7% probability for a 25 basis point rate cut to take rates to 1.75 to 2%. Now, this then is very much expected at these values. If this 27 was to materialize, well, then that first reaction you're going to get is an immediate spike in the dollar, probably weight in equities, pop in yields, which would force T-notes lower because that would be against what is a majority expectation, which is they're going to cut. Now, where do interest rates remain, or what is the expectation for the end of the year? Well, at the end of the year, it's looking like at the moment the market is weighing up whether it's going to be a one more and done, so two in this mid-cycle adjustment, or potentially 3. But we're going to get more information of that in this, which is the dot plot. Now this is the one that really does hold quite a lot of credence for the event coming up, and this is an update to the June— every calendar quarter, March, June, Sep— deck. So this is the June composition of the dot plots, and what we're looking out for is, does this green line which connects the median dots change. If it changes and becomes more flat, let's say, that would be dovish. That would have implications for a weaker dollar, for lower yields, and consequently supporting things like EUR/USD cable and gold. But if it remains unaltered, which is a distinct possibility this time around, that they cut but really it's only 2019 that changes, the rest remains pretty unchanged, that would be much more neutral. Um, here is ING, the Dutch bank. So what they've done here is the gray line is the current median dot plot. The blue line would be what would happen if it was more hawkish, i.e., they've got to downgrade 2019 because they've cut already and they're cutting it potentially again. So that's got to change. But as you can see, 2020, 21, the long term remain basically unchanged. That would be hawkish. What would be dovish would be this: they're going to cut again potentially by the end of the year, and then you've got a way lower median dot plot. Remember, the gray one is the current. So if we got something like this, this would be way more dovish and again would accelerate that move. Likelihood equities would rally, bonds would rally, and that kind of monetary policy play that rates remaining lower more aggressive easing cycle rather than just a small mid-cycle adjustment. There's a few other things to have a look for which make this event a little bit more complicated. Um, the Fed may announce technical adjustments to its balance sheet. This is now referencing the repo rate spikes which we talked about in the briefing this morning that have been occurring on Monday and Tuesday as liquidity apparently has been drying up for North American lenders. So look out for anything on that regard. Potentially, they talked about repo operations. They could announce a standing overnight repo facility, which would be something to put in place more long-term. They did discuss that briefly in June. However, they did say at that time they still want to kind of dig into the details and do a bit more research, and I'd expect that to be unlikely to be introduced so soon as today. If it did, that would be, I think, more interpreted as more dovish move that they're looking to continue to add liquidity to the system. Division in the ranks. What I mean by this is it's likely that tonight's announcement, if they do cut rates, is unlikely to be unanimous. There's two people to look out for on the vote, and that most likely from the voting members is going to be Rosengren and Esther George. The likelihood is that they will vote against the pact cut, and in fact they probably would have said the best course of action would be to do nothing. So if you hear a 7-2 vote, I don't think that's going to be particularly surprising in that sense. What do the big banks think? Well, I've underlined some of the key takeaway points. Deutsche Bank, they expect the act as appropriate to sustain the expansion line to continue to be the main takeaway. So the Fed will be willing to take incoming data and continue to do as they have been, which is stay the course that they're on. ING, they actually see scope for a dovish surprise. Remember that trajectory way undercutting the June lines? That would be a thing to look out for. Also, Powell's language about the negative risks stemming from the escalation in geopolitics. The more Powell talks that up, the more dovish it becomes. And Nomura, Nomura going one step further, the Japanese bank, they say the Fed will resume the expansion of the balance sheet. So remember, they, they ended the idea of quantitative tightening earlier than expected before, and now Nomura talking about, well, let's re-expand the balance sheet. That would be dovish in terms of reaction. In terms of the Q&A, things to look out for as we go into the second part, 7:30 To what degree do they see this oil price shock impacting their decision-making? I would say very little, given the fact that prices have already come back to some degree and they need to see more sustained oil pressure to the upside to really be factored into their decision-making. How concerned are they on geopolitical developments? How does the Fed foresee the impact of the ongoing trade negotiations with China? How does Powell respond? I'm sure journalists will ask him about the criticism the fire he comes under from Donald Trump. And then how does the bank intend to address this recent spike in the repo market? I think that will be a hot topic from the journalists in the press as we go into this. So just to clarify, here's the summary before I hand you over to Sam, because I know this is a lot to take in in quite a short period of time. Part 1, this is the immediate release, highly volatile. Cut 25 basis points is the expectation. Be careful of an initial spike in movement followed by high volatility because of the way that essentially automated systems work. First in input is the rate. Markets react in these high-frequency fashion, high volatility spikes in a fairly illiquid situation. But then the devil is in the detail— the dot plot information, the dot plot formation, technical tweaks, the statement Are there dissenters? If Rosengren and George don't dissent and it's unanimous, that's a dovish signal. So these are— there's a lot to go over here before you can really make a concrete answer of how to factor this in. I'll be here to help. 7:30 will be the Q&A. We'll go into that in more details shortly. All right, that's it from me. So I'll come back on. I'm going to let Sam come on and talk a couple levels to get you guys up to speed. Okay.

Hi guys, hope everyone is all doing well. Good to see some familiar faces in, uh, in the chat. We'll have a quick look over some of the, the assets that obviously are going to be affected by this decision. And just seeing equities, uh, just bounce a tiny bit here at the beginning of this stream. You heard about them just dropping down to their lows of the day, and worth keeping an eye on this trend line which we did break earlier, which is going to be part of that reason why we did push lower. You can see over the last couple of days of the week, starting really from that low from Monday following the gap down after the Saudi situation, we made another low there yesterday, third test this morning, and we got the break into the afternoon, and we have since, uh, gone down to test 95. So regardless of the decision and what, what comes about, definitely keep a close watch on the retest or possible retest of that trend line coming in around 3,000 as well. Obviously to the upside above that, you're going to have the, uh, the high of yesterday, the gap fill as well from the overnight Friday close. to where we are trading at the high of the week. Obviously a key point there. If we were to be ultra dovish here as well, gotta be aware of the highs that we had from last week. Really failed to get above there at 3021 on the futures. So that's certainly a point I would have marked up on there. And before there as well, quite a lot of price action around this, this whole area here, looking around 30.14, 30.15, uh, that would be a key point to have on. To the downside, anything, uh, more hawkish than expected— so for example, if we were to hear that they're gonna keep rates on hold, you've got to imagine you could get a break of this key level support going back from, you know, since Monday evening around 29.93, uh, break through that and then looking at the low of the week pretty quickly. If we put this, uh, longer term as well, well, you can see, well, here we've still got the whole zone marked up. So I'd still be focusing certainly on the futures around 2969 on a hawkish surprise, uh, as well. And you're probably then getting another test of this potential trend. Obviously the key levels to, to the downside, uh, if it was to be ultra hawkish, and this would be a really big move, but down to 2943 3.45, that zone that we broke out from, uh, the beginning of, of this month. And of course, if we get above last week's highs, we're in touching distance away from the all-time high as well. Unbelievably. So obviously we'll be on the mic throughout, uh, keeping an eye on the S&P. But those would be the levels and areas of interest that I'd have marked up, uh, for, for the near term. Could also say, and I mean, this would be more one to have on potentially, uh, later on. Just from the, the high that we did have last week, you can see we're almost got the third test of there later today. So we're just getting squeezed from that top end as well. So that coming around the pivot for, you know, the retest of that trend as well. So some nice levels, uh, in play for the S&P. For euro, we went through it in this morning's briefing with the, the overall range that we're in just over the last few trading sessions, that multi-year low around 110 on the futures and that high that we had from the, the 29th of August, but also the 13th last Friday after ECB day. So you can see that reaction for ECB, spiked lower to come back to the upside. I've seen a couple of, uh, you know, shouts in there in the comments expecting a half similar reaction here with the Fed. So yeah, always be aware of that initial spike one direction doesn't necessarily mean it's going to continue. So just bear that in mind. Obviously wait to hear everything. There's always going to be those algo spikes, you know. Don't trade it really unless you know what's going on. Some other key levels to be aware of then on the euro. We are similar to the S&P and just sort of getting squeezed from both directions. That ECB low, you can see we broke— other than this spike we had early yesterday morning, we're nicely respected on this trend. You could argue it just starts from there as well. From those lows. So I would have that on. And also from the top end, we're just getting another test of there now. So we're looking to perhaps just break through. I wouldn't read too much into that, just a bit of unwinding of risk beforehand. Other key levels, obviously the low of the day, but around S1 today in the futures, you've got a nice area of support which it would struggle to get through unless there was a big fundamental push. And obviously you've got the, the key lows from the 11th, and then Friday and Monday as well. To the upside, obviously those highs, but I also do like the look of this area around here as a key point of resistance around 1,1160 as well. We'll just finish up with, with gold quickly just to see how we are looking. You can see opposite really to the S&P today, so it's been moving more on a bit of risk-off. We're about to see them now move in correlation with monetary policy driving those markets. Said it in the last couple of days in the briefing, I really like the look of this market if we were to get a break below 1494. You can just see how many times we've come down to test that area, and of course from before as well. So if we were to be surprisingly hawkish, a break of that would provide a good opportunity over the coming days. We are just getting squeezed well. You can see here, 1, 2, almost that third test. Definitely look to have this trend line on as well. The high of the day almost making the high of the week as well, so that remains a key level. And even going back to the previous weeks as well, some nice price action around that point. As with any push above that, I would look to have this trend line on, or potential trend line. The way gold can move, it wouldn't be too surprising to find some resistance on that third test of that as well. So a couple of these markets coming into an interesting point where, um, market— the, the price is just getting squeezed from both directions. Should be an interesting meeting. And as usual, as the briefing, any questions you guys have, please, you know, do put them in the chat and, uh, and we can go through those as and when. You've got about 4 minutes, so obviously myself and Anthony will be be on the, the chat throughout. Let's have a quick look over T-notes as well. Obviously going to likely to— all these markets going to move in correlation by the end of it, you probably would half expect. And, and, uh, if I just put this longer term, T-notes, bad week, bad week last week. Let's remove the pivots. You can see just the size of that move, over 2%. Biggest since November 2016 when the Don was appointed. Just having a look at how key that level was though, that low of the week was also the high back in 2017 September, then the beginning of June into July. We then broke through finally not too long ago as well, just before August, and we found support on there. So as the level goes any tests of last week's low will be pretty key. So have that marked up. You can also see where we are just trending higher. There's not so much in the way of a, of a great trend line, except if you maybe have this forgotten and get rid of that spike. Um, but you know, I would still have it on as well as this market just drifting higher. And then of course looking at any of the previous highs as well as areas of support above where we're trading. We're already up you know, a fair whack on the day. And this area itself, very important, previous lows back from the 7th, uh, the 11th, and also a breakdown area the day later. So key point, couple minutes until the release. I'll pass you back over to, to any questions, obviously please do get them in the chat.

Yeah, thanks, Sam. Um, couple of, couple of pointers then, as we've only got 2 minutes now until the actual numbers come out. For one, I will come off the microphone at 7 o'clock. I will turn on my speaker and we'll let the squawk box cover the news as it comes out. So I'll be silent, they will be calling out all of the information. Now If you're trading these news-driven events, I, I would firmly say there's no way you could do it without having a Squawk box. So for us, it's the cost of doing business. We need them watching all the major newswires, we need them calling out all the major headlines for us to do our thing. There are other ways you can do it as well in terms of if you're a retail trader, obviously you can access these Squawk boxes. We'll talk about this later, but you can also get Twitter where you can follow certain accounts that break news very quickly. Uh, my advice then, just going into this, is don't feel an immediate necessity to have to get caught in the market's initial volatility. The charts cross-asset will start fluctuating anytime from now up until the release. This is normal as people are withdrawing their trades and liquidity dries up. Just wait. There's a lot of information to digest here. Sam will share some of the comments in the chat room as well. Okay, you got about 45 seconds. I'll put the squawk on. Okay, so I'll be silent, they'll call out the news. Got about 40 seconds.

10 seconds. Let's cut 25 as expected. Cut 25 as expected. 17C appropriate end of 2019 Fed funds rate at 1.6%. 5C at 1.9%. 5C at 2.1%. Median Fed funds at the end of 2020 is 1.9%. That's cut from 2.1%. At end 2021, 2.1%, cut from 2.4%. End 2022, 2.4%. It sees slightly higher economic growth and jobless rate in 2019. No change in inflation in projections. Long-run forecast GDP growth 1.9% unchanged, jobless rate 4.2% in line, PCE 2% in line. Here we are, 1.8%, 1.8%, that is cut from 2.1% there. It's also saying that it's offering rate on overnight repos 1.7%, that's 5 basis points below the bottom end of the Fed funds rate. Target range. Fed says it will continue reinvesting principal payments from portfolio. Repeats, labor market remains strong. Activity has been rising at a moderate rate. Household spending rising at a strong pace. Business fixed investment and exports have weakened. Inflation still running below 2%. Repeats, it will continue to monitor incoming information and act as appropriate to sustain the expansion. So that does leave the door open to further rate cuts. And just an immediate reaction, there was two-way flows in the S&P, although we are pretty much unchanged from pre-release levels here. The Fed cuts rates there by 25 basis points. That's in line with expectations. The IOER cut, and that's been cut to 1.8% from 2.1% prior. In terms of the forecast, the dots end '20 seeing that 1.9% cut from 2.1%. 2021 at 2.1%, cut from 2.4%, and the end 2022 seen at 2.4%. That long-run dot, 2.5%, is unchanged there. It looked— looks like, um, Bullard wanted a 50 basis point rate cut there. He did hint at that in the run-up to the meeting. And George and Rosagrand wanted no change to two hawkish dissents, and Bullard wanted a larger cut than was delivered.

Okay, so Squawk just—

here looks for no further cuts in 2019, but 7 of 17 policymakers saw we one more cut as appropriate. Just seeing some downside now in ES as this becomes a bit more apparent. Also, T-note futures are seeing some downside as well.

Yeah, I mean, very, very choppy, obviously, at the initial release here. On the surface, they cut 25. We were expecting that. They have altered a little bit some of the near-term dot plots. There was dissenters, George and Rosengren, voting for no change. We knew that would be the the case. Um, I don't think that in itself should make the dollar spike or explain that. I don't think it's that unusual. There were 3 dissenters, or not all 3 were going in the same direction. Bullard wanted 50, the others wanted nothing. And so yeah, you've had a little flurry lower there last minute in the equity space, but I'd say fundamentally it's very hard to commit that that's the right course of action to just be blindly short there's not a lot there for me to support that this is really hawkish and therefore you want to hit equities in that sense. But in a correlation point of view, the dollar is firmer, equities a little pressure, gold a little lower, and T-notes have come down. So definitely there is a little bit of a perception here that perhaps, uh, the initial dovish positioning of markets, obviously looking for multiple rate cuts. I mean, perhaps that is why you're getting this net hawkish type reaction. But language-wise, I don't see too much different. Here is a look at the statement changes. I know this is a bit small, so let me see if I can blow it up a little bit. Here we go. So they've said here— so the line indicates where they've scratched previous comments from the July meeting. And the yellow indicates what they've added. So, although growth of household spending, they said before, they've changed to, although household spending has been rising at a strong pace, fixed investments and exports have weakened. So instead of saying have been soft, they're saying have weakened. Further down in the other statement, it's this middle paragraph that's quite interesting for me because nothing there has really changed. And that's the quite key paragraph. If I just go back to here and bring up the actual statement, so make it a little bit clearer for you guys to see, this is the statement when they say, in light of implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower the target range. So that language is identical to before. They then said, this action supports the committee's view that sustained expansion of economic activity strong labor market conditions and inflation near the symmetric 2% objective is the most likely outcome. For me, that's unchanged. Remember, Nomura were looking for potential— this, this going back to the expansion of the balance sheet. You had ING looking for really radical, quite dovish changes to the dot plot to the downside. There were some calls that maybe the labor market activity would have been tweaked, but remember, they put here at the top jobs have been solid, unchanged. So if anything, I think any of this hawkish reaction that you've seen initially is because the Fed really haven't done a lot. And so it's more about a disappointment for those positioned for something a little bit more dovish, which my initial interpretation here is not a lot has changed. Now that is it. I mean, that statement really goes to show, look, nothing's changed. And so that's why you've had really a lack of committed development to what's happened so far. When you get this sort of, uh, release, what's going to be really important now is when Jerome Powell speaks, because when he speaks at half past 7 now, it's like now this first part's been a bit of a non-event. It becomes more important now. What does he say about the future? Um, Sam, you want to jump on? Anything you want to add from the levels point of view? See what Sam's got to add.

Yeah, hi guys. You can see obviously in the initial spikes there, we've got your dojis in, uh, in US equities. And worth keeping, uh, a watch on. You can see that, that trend line that we, we had on from that top really getting that third test of it, and along with some decent resistance that we had previous in the day. So I do quite like the look of if we can get say a 5-minute close above this trend, I like the idea of getting a long towards that sort of area, uh, marked up the, the gap fill from the week. So we're keeping a watch on that to see how, how we, uh, we come in. Uh, there you go, literally right back where we started 7 minutes ago. And that just confirms Anthony's point really about just holding off on these situations, just waiting for, um, you know, the market to settle down. So keep a watch on, on equities here. If they can get above this trend, I wouldn't mind that as a long. And then in turn, you also seen gold obviously reverse. The Dow just coming up here, the Dow just coming up to a similar level, uh, obviously with, with that trend. In fact, you just see there, it's, uh, just couldn't get quite above all that resistance. So Yeah, I like the idea of equities long if we can get a 5-minute close above those levels. Gold, um, it's slightly more tricky, I would say, and really trying to predict which way this is going to go. We obviously spiked, spiked down, and we couldn't get below 1505, and was a bit of support from the previous day. We're kind of— if we drop this to 5 minutes, you can just see how wild that's been. Um, I saw someone in the chat put the old false breakout strategy in there. It's not a bad way to look at it. You can see here as well, dropping it to 5 minutes, what was a previous level support acting as resistance. So that's quite a key level just to consider, you know, as a bit of a line in the sand. As long as we stay below here, you can feel, you know, confident of maybe looking for the short. But back above 1512.7 on the futures, then there's no reason why an opportunity to get long up towards at least the R1 is, is not out of the question, and I wouldn't mind that either. Euro, limited reaction, limited reaction. You can see we got that spike, didn't we, just before the announcement, up towards, uh, that trend line. So again, like the S&P, if we can get above their 5-minute close, I don't mind the whole dovish push, weaker dollar, up to there as well. I think that's what I'm favoring really at the moment. But euro relatively unmoved, and on the day as well it's only down 17 ticks. So, so quite a calm reaction. But if stocks don't get above that trend, then I'm not interested in a long. And as long as gold stays below 1512.7, I think that's going to be the case. So just keeping an eye on gold here and how it moves. See, the pound, and as you'd expect, is It's hardly done anything. We all know there's a lot more going on that's affecting the pound. You see actually that spike there, well, that candle, 29 down to— yeah, 28 ticks on the pound, which is nothing. Obviously Bank of England tomorrow, but more importantly Brexit really driving that market. Have a look here, gold's down below. See if you guys got any questions. All good. Yeah, you can see now stocks, uh, well, you just could not get back above that trend. And just the importance here, I know we've said this before during the, um, during the FOMC, just the importance of those 5-minute closes can be so helpful in just saving you from that false break. So we get back, uh, you know, up to those levels and, you know, you don't want to commit. Just think of them as lines in the sand, and that 5-minute close is confirming that there could well be, you know, push higher or lower. Failure to do that, you know, people obviously going to take profit around there. The fact that we failed to go higher is a good reversal signal, and stocks have, you know, come under pressure now. The Dow Jones, you know, complete reversal, and we're now back down to towards that S1. One thing that I would absolutely be aware of, as we just seen the Fed rate cut odds dropped to 42% for October is of course Donald Trump. Uh, wouldn't be too surprised to see a tweet from the man himself shortly. Um, I've seen a tweet here as well: how long till Trump replaces Powell with Bullard? We'll soon, soon see what Trump's got to say about it. Can't imagine it's gonna be too nice. T-notes as well, limited reaction, but I still would have this trend line on and that whole area You can see again, key level, just not getting above here. So that dovish reaction, which of course we could still see in 20 minutes once Powell's really, really starting to talk, we can get a close above there, you know, the long I do like the look of as well. But at the moment, things are pretty, pretty— well, I guess we're— euro just trying to get now confirmed break of those lows. Have that marked up again. 5-minute close below there, you know, the, the short down towards the, the S1. It's not bad.

Okay, a couple of things here to address. while we await the press conference. We've obviously got about 15, 20 minutes or so. I just saw a good tweet come out. Let me just get it because it's got an image that we can talk about. Sam, there was a dot plot tweet there on your left column. What was that guy who's tweeted it? If you scroll it down. Jérôme.

J-E-R-O-M-E.

Can you just bring it up for me? So yeah, while Sam brings that up, there's a few points just to mention. There was an M. Brown in the chat talking about, is this decision enough to move oil? I would say no. I would say that's pretty evident from the way that oil has been disinterested in this event. I would say trading oil on the back of the FOMC is probably not the type of instrument that you would typically focus on because you would be trading basically subsequent knock-on effects that happen. And so yeah, I, I would prefer to focus on yield movement, so rates, gold, FX, dollar-led moves, rather than something like actually oil because it would be A lot would need to happen for it then to drag oil down, for example. Also as well, what makes oil quite unique at the moment, there's obviously a massive underlying story that's in play at the moment, and that is of course the situation in Saudi Arabia and in the Persian Gulf. And so I don't see any much reason for oil traders to really get stuck in. And ultimately the Fed language hasn't changed. And so at that point, no need to really influence oil. Yeah, this was the dot plot. Let me just transition my screen. This was the image that I was just referring to. So here, I know it's a little bit blurred, it's not exactly the best graphic, but working on my feet here. So here you can see the line of the new trajectory of the dot plots, and as you can see, this basically mimics that more slightly hawkish one that ING were predicting, and that is the fact that obviously 2019 has been bumped lower, which is understandable. They've cut again, it's the second cut, and so rate's got to be low at the end of this year for sure from what they predicted in June. But then a graduated pickup. So remember before, it did look like a bit of anomaly. You had a dip and then rates going up. This is a very uncommon rate cycle. Normally it's consistent. This is more akin to what is quite more now common pattern. So Perhaps now equity selling off. The idea then that really the language hasn't changed, the dot plot really hasn't changed, and maybe this disappoints people who are looking for something more dovish. Remember, there was also no mention at all of a permanent standing repo facility. So they haven't really addressed with a, with an actual practical solution that of the repo issue. This would all translate to be quite hawkish, disappointing the doves as a net result. Now equities are coming under some pressure here. I think once people are digesting this, um, are coming to that same conclusion. So, uh, further dollar strength, both currency pairs now a little bit of pressure, uh, and equities on the back foot just testing the, uh, S2 on the daily pivots now in the Dow and the NASDAQ, as you can see in my center charts. Now we await Powell, obviously coming up. So what's interesting for me from Powell, given my description of what I've just said there, being all slightly more, slightly on the hawkish side, then for me Powell's now got to come out and he's got to justify this. And so I think he is definitely going to be asked about this funding squeeze in the repo market. The more he says that they potentially are going to do something, the more you might get a bit of a reverse from what we've seen, because it shows that he is open to taking action on it. Does he use the geopolitical situation to say, we are monitoring these things, and if, if they develop further in a negative way, we will take action to sustain the economic expansion of the economy. That type of language, I think, could be a cue for a little bit of a reversal, because then it's almost like hawkish initial interpretation, then he becomes dovish to manage the situation. If he doesn't, if he literally doesn't address those issues, I potentially— we could be in for a continuation of this initial move. Obviously, the S2 in the Dow and NASDAQ are providing a bit of technical support for the moment. If they get breached or broken, and obviously now it'll be prudent at this time to start marking up levels to the downside as potential targets. Uh, same for gold, uh, in that respect. So got about 12 minutes or so now to the press conference. Any questions at all, put them in the chat. Happy to, um, have a look. Tim Good to have you with us live. Hope you are well. Yeah, oil, a little bit of a push down, uh, obviously with this kind of mix of asset class movement at the moment. Obviously equities, bit of pressure, um, perhaps then a lack of real measures in immediate sense from the Fed, uh, meaning that then there's a bit of further risk that we could continue an economic downturn at this point without monetary support that was expected by markets. Dollar strength, of course, as well. A couple of things that it might pressure it. But as I said, a little bit more difficult because of the other implications ongoing in oil with the Saudi stuff at the moment on geopolitics. Anything else? Any other questions? Sam's there, obviously he can answer your questions as well in the chat. I'm just gonna have a quick scan through myself. Couple of people talking about the resolution of our feed. Uh, yeah, obviously could always be sharper. The reason why it's not crystal clear is because we actually broadcast a stream live all day long, and so in order to have that buffering in as a shortest time frame as possible, um, it's to the disbenefit of some quality, but hopefully it's visible. After our session is complete, this video will be— is being recorded, will be uploaded to our YouTube channel. And so absolutely, it will be then in full HD, and you can watch it back if you need to go over everything or anything that we were talking about. But yeah, we'll try and— for the next YouTube session, we'll try and, uh, we'll try and fix that to make it better for you guys. Stephen, would or could markets continue to be more volatile after the press conference? Absolutely could, always. That's why, you know, it's always prudent to stick around and listen to the press conference for sure. But yeah, we'll be watching that straight away. Okay, so just while we're waiting for the press conference to start in about 8 minutes' time, I'm sure you're already aware, but me and Sam, we do tweet quite frequently. Just a reminder, it is now under 10 minutes until Well, let's listen to the Squawk first. We will be posting a link up on the board in just about a minute's time now. Okay, so they're just saying it's a 10-minute or 8-minute warning. But yeah, I was just going to say, if you are— even if you're not trading intraday, can be quite useful. I generally tweet things that I— my kinds of opinion, my insights, interesting graphics that I see, thoughts on on the market generally. So for instance, on the weekend I put together an economic calendar, but this isn't like other economic calendars you get on normal websites, because what I do is I, I go through dozens of different websites and I compile what I feel is the most effective calendar possible for our traders. This covers not only economic data but important corporate earnings, uh, things like quadruple witching, which is of course the end of the week. I'll cover things like political Brexit updates of when there's key legislation passing, all these different types of things. So I do that every Sunday, but obviously I tweet during the day as well. I put, put out my opinions about different things, um, just generally on markets. So for example, here is a good graphic, um, that shows the infrastructure in Saudi Arabia where all the key pipeline, the networks of oil and gas pipelines are. Absolutely pivotal if you're going to start reacting to news as it develops, if you're monitoring things in the Gulf, for example. So feel free to follow me on Twitter if you don't already do so. Just search my name, or my handle is here, @awmchung. Sam, he is also on Twitter as well, so feel free to follow him. I'll just bring his account up now. Sam North, here he is. So Sam, direction north, and his handle @snorth19. And then if you are interested, one of the things obviously that I specialize in is kind of global macro fundamentals from a kind of top-level perspective. So every morning on my way into work, I will reshare some of the most important articles from Bloomberg. So we're obviously situated in London, so when we come in in the morning, I will reshare articles that are relevant for that day. So for example, this morning I shared a really good Reuters explainer article about what is the repo rate, why is it spiking, what does it mean, why is it happening. All these types of things. So yeah, we probably tweet about 5 or 6 stories every morning. That could be a nice shortcut for you guys to stay on top of the news cycle. So yeah, a couple things there just to be aware of. Otherwise, just going back to the charts, yeah, this is quite normal now at this sort of time. If anyone was in those Shorts, you can see in the equities push on the downside, a lot of people closing those out ahead of the press conference. And so therefore, um, people would now be more prudent approach to just stay out. Let's hear what he's got to say. He'll, he'll start with an opening address and then he'll have a Q&A. Just to remind you, with the Q&A, let's go back to that PowerPoint presentation that I went through. Because there was one slide that was relevant, which is this. So this is what we're looking for. Aside from what's just happened and what I've explained, anything about the rising geopolitical tensions, anything about the trade war, anything about the Trump criticism, and importantly, anything about the repo market and liquidity squeeze— they're all the key things I would, I would be looking for, for him to say. Again, the more he talks up these issues as relevant for their thinking and policy decision-making, more directly, then the more dovish that would be. If he doesn't really pay heed to much of these or give much color or content, though, that is going to be more hawkish in protection. Potentially we get a second phase to the already more hawkish type move that we've seen. That's how I would go about navigating the press conference. I'm sure Sam will share a feed if you want to watch it. I'll actually play a feed on the mic so we can listen to Powell. So let me just see if I can pull one up, and then you guys can listen in to Powell over my mic while he's doing it. If you wanted to watch Jerome Powell speak live, then all you've got to do is just basically go on the Fed website. Okay, Trump's tweeting, so I would imagine he is absolutely tearing into Jerome Powell for not doing enough. Let's see what Trump is saying. Okay, Trump has just tweeted, J Powell and the Federal Reserve fail again. No guts, no sense, no vision. A terrible communicator. And Trump has tweeted this, may I remind you, 2 minutes before Powell takes the stage. Gotta love Donald Trump. Is this going to move the market? Absolutely no. Was he always going to be critical of Powell and was he always going to fail in Trump's eyes? Absolutely. Trump just wants way much more than Powell's ever going to deliver. Interestingly, though, if you were Jerome Powell and if my advice— if my little assistant whispered in my ear, Trump just tweeted about you, I'd say, go away, go away. I don't want to know. Let me do my thing. And I'll worry about the president later. I can't begin to imagine how frustrating it must be to be Jerome Powell. But hey, comes with the territory, I'm afraid. All right. He's going to start soon. I will play the audio over the score. So we've got about 90 seconds till he starts. Yeah, just to— Kevin, just to address your, your question, so it's not going to be constant noise. What I'm waiting for now is the press conference to begin. I'm watching the live link at the moment. As soon as it goes live, I'll let you know, and then Jerome Powell will start. Okay, so they're showing the live visual now. Uh, Powell hasn't yet taken the stage, so let me just switch this over so you can watch while you're listening. A good resource to use for this type of thing actually is YouTube. All the central banks are active on YouTube. Just type in the Federal Reserve. You can do this on the Federal Reserve website as well, but the Federal Reserve have a webpage, YouTube channel. So here's the live link. There's the live shot so you can see what's going on. So we'll let that roll. So as you can see, he hasn't taken the stage. Here he comes. Okay, about to begin.

He's just taking his place at the lectern.

Good afternoon everyone.

So I'll leave it over to Jerome now.

My colleagues at the Federal Reserve and I are dedicated to serving the American people. We do this by steadfastly pursuing the goals Congress has given us: maximum employment and stable prices. We are committed to making the best decisions we can based on facts and objective analysis. Today, we decided to lower interest rates. As I will explain shortly, we took this step to help keep the U.S. economy strong in the face of some notable developments and to provide insurance against ongoing risks. The U.S. economy has continued to perform well. We are into the 11th year of this economic expansion, and the baseline outlook remains favorable. The economy grew at a 2.5% pace in the first half— half of the year. Household spending, supported by a strong job market, rising incomes, and solid consumer confidence, has been the key driver of growth. In contrast, business investment and exports have weakened amid falling manufacturing output. The main reasons appear to be slower growth abroad and trade policy developments, two sources of uncertainty that we've been monitoring all year. Since the middle of last year, global growth— the global growth outlook has weakened, notably in Europe and China. Additionally, a number of geopolitical risks, geopolitical risks, including Brexit, remain unresolved. Trade policy tensions have waxed and waned, and elevated uncertainty is weighing on U.S. investment and exports. Our business contacts around the country have been telling us that uncertainty about trade policy has discouraged them from investing in their businesses. Business fixed investment posted a modest decline in the second quarter, and recent indicators point to continued softness. Even so, with household spending spending remaining on a solid footing and with supportive financial conditions, we expect the economy to continue to expand at a moderate rate. As seen from FOMC participants' most recent projections, the median expectation for real GDP growth remains near 2% this year and next before edging down toward its estimated longer-run value. The job market remains strong. The unemployment rate has been near half near-century lows for a year and a half, and job gains have remained solid in recent months. The pace of job gains has eased this year, but we had expected some slowing after last year's strong pace. Participation in the labor force by people in their prime working years has been increasing, and wages have been rising, particularly for lower-paying jobs. People who live and work in in low- and middle-income communities tell us that many who have struggled to find work are now getting opportunities to add new and better chapters to their lives. This underscores for us the importance of sustaining the expansion so that the strong job market reaches more of those left behind. We expect the job market to remain strong. The median of participants' projections for the unemployment rate remains below 4% over the inflation continues to run below our symmetric 2% objective. Over the 12 months through July, total PCE inflation was 1.4%, and core inflation, which excludes volatile food and energy prices, was 1.6%. We still expect inflation to rise to 2%. The median projection is 1.9% this year and 2% in 2014. in 2021. However, inflation pressures clearly remain muted, and indicators of longer-term inflation expectations are at the lower end of their historical ranges. We're mindful that continued below-target inflation could lead to an unwelcome downward slide in longer-term inflation expectations. Overall, as we say in our postmeeting statement, we continue to see sustained expansion of economic activity strong labor market conditions, and inflation near our symmetric 2% objective as most likely. While this has been our outlook for quite some time, our views about the path of interest rates that will best achieve these outcomes have changed significantly over the past year. As I mentioned, weakness in global growth and trade policy uncertainty have weighed on the economy and pose ongoing risks. These factors, in conjunction with muted and inflation pressures have led us to shift our views about appropriate monetary policy over time toward a lower path for the federal funds rate, and this shift has supported the outlook. Of course, this is the role of monetary policy—to adjust interest rates to maintain a strong labor market and keep inflation near our 2% objective. Today's decision to lower the federal funds rate target by a quarter percent to 1.75% to 2% is appropriate in light of the global developments I mentioned, as well as muted inflation pressures. Since our last meeting, we've seen additional signs of weakness abroad and a resurgence of trade policy tensions, including the imposition of additional tariffs. The Fed has no role in the formulation of trade policy, but we do take into account anything that could materially affect the economy, relative to our employment and inflation goals. The future course of monetary policy will depend on how the economy evolves and what developments imply for the economic outlook and risks to the outlook. We've often said that policy is not on a preset course, and that is certainly the case today. As I've noted, the baseline economic outlook remains positive. The projections of appropriate policy show that participants generally anticipate only modest changes in the federal funds rate over the next couple of years. Of course, those views are merely forecasts and, as always, will evolve with the arrival of new information. Let me say a few words about our— about our monetary policy operations. Funding pressures in money markets were elevated this week, and the effective federal funds rate rose above the top of its target range. Yesterday. While these issues are important for market functioning and market participants, they have no implications for the economy or the stance of monetary policy. This upward pressure emerged as funds flowed from the private sector to the Treasury to meet corporate tax payments and settle purchases of Treasury securities. To counter these pressures, we conducted overnight repurchase operations yesterday and again today. These temporary operations were effective in relieving funding pressures, and we expect the federal funds rate to move back into the target range. In addition, as we've done in the past, we made a technical adjustment to the interest rate paid on required and excess reserve balances, setting it 20 basis points below the top of the target range for the federal funds rate. In a related action, we also adjusted the rate on overnight— on the overnight repurchase facility to 5 basis points points below the bottom of the target range. We will continue to monitor market developments and will conduct operations as necessary to foster trading in the federal funds market at rates within the target range. Consistent with our decision earlier this year to continue to implement monetary policy in an ample-reserves regime, we will, over time, provide a sufficient supply of reserves so that frequent operations are not required. To summarize, we are fully committed to pursuing our goals of maximum employment and stable prices. As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective. Thanks. I'll be happy to take your questions.

Okay, so he's into the Q&A now. One interesting one to end there was he did talk about the repo rate, obviously, which has spiked this week, and he didn't really say too much. He didn't really say it would have much actual knock-on implications onto the economy. So perhaps perceived then as a fact that that could be a little bit disappointing for those looking for a little bit more commitment than how he would, he would address that. But not too much reaction thus far, but But yeah, that last one was quite interesting. Not committing to more definitive course of action to address the liquidity squeeze would be more hawkish. So should put downside pressure, if anything, more support for the dollar and downside pressure equities. But let's see. Q&A. First question just came.

At the last press conference, I pointed to two episodes in, I guess, 1995 and 1998 as examples of such an approach. Approach, which was successful in both of those instances. As our statement also highlights, though, there are risks to this positive outlook due particularly to weak global growth and trade developments. And if the economy does turn down, then a more extensive sequence of rate cuts could be appropriate. We don't see that. It's not what we expect. But we would certainly follow that path if it became appropriate. In other words, as we sing.

Yeah, just keeping an eye on the likes of gold, just having a secondary test down at that previous spike low that we had on the first, um, comment. Well, there you go, gold, just a little extension there, break through the S2, nice pop of a dollar there on that break technically. So let's just have a look at gold psychologically. We're at the $1,500 handle now, and you can see that little accelerated pop in gold just on the breakthrough, not only of that previous S1, also that previous low point that we had going back to the prior day's session early in the European morning. So keep an eye on gold, just busted through 1,500 now. Downside targets, you've got that area here, this kind of zone— sorry, let me transition my charts. So this was the break here, that was the Monday low in the European morning, and just see a little extension of stops being run there. And so yeah, I definitely think that was that, that, that lack of commentary on the repo, maybe a little bit of dollar, a little kick there helping the gold just break through that level momentarily. So just keep an eye there. Bounced off that, so a false break for the moment, but worth keeping an eye on. Equities, the Dow's had a little look at that initial low, but again, so far uncommitted to take a further sustained move to to the downside. And then just looking at the US 10-year, that trend line that Sam had marked up, again finding some support technically at those previous highs. Definitely worth keeping an eye there. What we would be looking for really is you need a simultaneous break. If the 10-year can get below there, if the Dow can retest and push on through the S2, perhaps then you get a bit more of a momentum behind the move down in gold. But that's when that cross-asset asset class mix is quite important to monitor. Okay, back to Powell.

You should be inclined to— if you want those financial conditions and that favorable outlook to come about, you should be inclined to cut. Well, what we do going forward is going to— is very much going to depend, Rich, on the flow of data and information. We've seen, you know, if you look at the things we're monitoring, particularly global growth and trade developments. Global growth has continued to weaken. I think it's weakened since— since our last meeting. Trade developments have been up and down and then up, I guess, or back up perhaps over the course of this intermeeting period. In any case, they've been quite volatile. So we do see those risks as actually more heightened now. We're going to be watching that carefully. We're also going to be watching the U.S. data quite carefully, and we'll have to make assessment as we go.

Thank you, Mr. Chairman. Nick Timoros, The Wall Street Journal. I know you're trying to speak for the committee when you do these press conferences, but the committee is clearly divided right now, at least about the outlook and the appropriate policy path. Some people think you need to wait and to see the labor market and the consumer crack or weaken further before acting more aggressively. And some people think that by the time that happens, you'll need to do even more aggressive action to arrest a downturn. Where do you stand on this?

Well, let me just say on the general point of diverse perspectives, you're right. Sometimes the— And there have been many of those times in my now.

Yeah, just, just while we continue to monitor Powell, quite an interesting comment from Sam there. Yeah, just getting a shout from Charlie. Gold, little extension now in gold. I'll come back to Sam. So gold now down to $1,497. So you can see that building a little bit of pressure. Now you get that, that little push down to that, that kind of zone area where Sam was looking. Down toward the S2. So not a bad place here to book if you're in that fast money move on that spike around this kind of level, at least to scale out some of the short if you're in it. If not, close it. Got a nice little run there, about $3.50, $4 on that eventual break now of that move in gold. That came— remember that what I was just saying about the correlations. Now equities haven't really played ball, they've bounced a little bit off the lows, but you see the 10-year break straight as gold's gone through there. So there you go, gold under pressure, but look, the 10-year has now consolidated the break on that level. So you're getting— that's when you need these coordinated moves. Sorry, just transitioning my charts back. So this is gold top right, T-notes bottom right. See, then that, that ellipse, that That was the level. A break there almost acting as the cue for the continuation of the short in gold. Gold just going again. Charlie's getting excited, so I'm sure he's in the short here. But yeah, not a bad place to book some, Charlie, if you're in that trade. You're out now? Good. Yeah, that's a decent downside level there. You can see in gold you've got the previous lows in September, almost a double bottom there. And so that's what those— the short-term speculators are chasing. They're just looking to hit market and bail on the first technical relevant possible level. Uh, beyond that point, you know, where next? You've got that real big massive move that we had going back on the 13th of August, that low coming in around here, and then the high, the we had on the 6th there. But I'd be inclined, like Charlie, who I know from earlier had a good euro trade— if he's now had that in gold, Charlie, I'd go home or go to the pub. Straight to the pub. But yeah, the point being, you can see how you've got to, you've got to monitor cross-assets. It's not just looking at your one instrument. Sometimes the timing, if you're going to be aggressive in the market comes through the break of other assets breaking key levels. When they do, that can be the trigger point for the secondary push in the asset that you may be looking at in more focus. Now, if equities do come down and we get a pivot break down to S1 in the 10-year, perhaps then gold does stretch its legs out and starts pushing down another $3 or $4. But all of these things would need to happen at the same time. The benefit of looking at multiple asset classes at once. Oh yeah, the point that Sam said in the chat that I was gonna say before the gold move— Sam said, Trump to raise tariffs on China by the end of the week, anyone? And I think what Sam's getting at here is that There's one way Trump has— as much as he has shouted at Powell to get him to do stuff, one way to get Powell to do something is raise tariffs on China. That causes economies' perception to collapse, equity sell-off, and then you force Powell's hand that he has to cut. Powell has already said that basically he'll respond to incoming variables, and if it gets worse, he's willing to act. So if you're Trump, okay, I'm going to make this an absolute shit show, and then you've got to act at that point. Excuse the language, but yeah, interesting. Now the 10-year having a push on pivot with equities now at lows. So this is what I mean, keep an eye now, you might get a little bit of a further extension on some of these moves. Cable, you've got a nice level cut coming up to the downside, uh, the early morning low point that we had tested at the European Open and midday today. So further dollar strength. Now you're getting the equity squeeze. So with the yields moving higher and gold under a bit of pressure, equities now starting to play ball with that same correlated mix. Okay, I'll let Sam come on and add a bit more of a spin.

Yeah, you can see the, the dollar up nicely, and well, gold and S&P on some big levels now. So S&P just putting a move in here to get below that low that we had from Monday. So low of the week in the S&P, 76, the next target down below. And just before the announcement, we were talking just how key this whole level is here in in gold. Close below here and I can see a big drift lower over the coming days. But, you know, failure to do so, big reversal signal. And you can see the importance of just this area here. You've— I mean, from the lows, we're already up $5 from there, so 50 ticks. So decent, decent area of support there. You obviously have have that marked up. And the euro coming into our zone from that S1, reason being not just the S1 as well, but was those previous highs from yesterday morning, just good price action around there. So again, S&P, can we get close below? Gold, can we close below? Euro as well. And if we go back to that gold, remember we had it on the 5-minute, you can see there, just didn't want to— did not want to close above. And since then it's just down. Opportunity-wise, I guess you could say we closed below that trend line, the pivot retest of what was the low of the day. All half-decent opportunities, decent enough bounce from here, the gap fill as well. Uh, but certainly keep an eye— can we get close below that key area of support that's been in play for, for weeks? You can see the pound here, pound isn't interested. Pound doesn't really care too much here, but keep an eye on that, the low of the day for the pound as well. And also you've got those previous highs from yesterday morning, but obviously bigger things to come for that market. T-notes, we'll see, down below that trend line and the high from yesterday, decent spike lower, made the low of the day. And like the other markets, just having a little breather. Profit basically been taken. So, you know, we've got 10 minutes to the close of the hour, so that as well will be quite key, especially if those markets want to close below. Aussie dollar on the lows as well, as you'd expect with that dollar strength coming in. But, uh, yeah, some good trades. Obviously Charlie's won for that gold short. Now, really good, good opportunity there.

Okay, what I'm going to do now is obviously the Q&A is going to keep going, so So if you are continuing to trade this event, um, go ahead. But I think for our guys, certainly from a few of them that have traded, it's almost a job done for the minute. And so I'm going to wrap things up. A couple things I'd like to say upon just concluding the session. For one, I hope you found the last hour 20 minutes useful. I hope it gives you a bit of an insight how to prepare for news-driven events. If anyone would like to see the slides that I used, I did tweet them earlier from my Twitter account. I took a picture of them and added it to one of the tweets I did, which is here, so you can see everything. And that will give you an idea about how we kind of prepare our, our traders here at Amplify for these types of events so that they understand what they're looking for. A couple things then to run through quickly. Amplify Trading, what do we do? Well, we do— we have a few different things actually that we do. So this is my— I'll keep it to a minimum. My pitch about us as a company and what we do. So Amplify Trading has been going for about 10 years. We started originally as by two former prop traders for a US firm called Goldenberg Heymeyer, which the guys started trading back in 2001. They then started Amplify in 2009, and originally it was helping people to learn how to trade financial markets in the futures space, which is what the guy's bread and butter was back in the, back in the day. Now our business has evolved. We now have two distinct divisions. One is a trading arm which I oversee personally, and my role is in capacity of head of market analysis. I've been doing this for the best part of about 14 years now. I used to work for the world's biggest Squawk Box service as the, the main kind of guy on the desk. I left that about 4 years ago and joined Amplify. So my job here now is to hopefully educate the guys about how to prepare for fundamental developments on a macro basis in the market. Obviously, as a trading firm, we do have a training arm, so people can either undertake— if I go on to our web page here, we have different things. We've got a 1-week program that's done physically here in London. We also have a career program, which there's some of the guys here with me on the floor this evening. It started the latest intake this week, but there's career programs. These are 9-week training programs based here in London where basically we take you all the way through fundamental technical analysis, risk management, trading psychology, everything. 9 weeks is not enough to make get you a finished article actually by nowhere near that. But what it does give you is an ability to understand and learn about markets and what you've got to do to go forward to be better, A, at trading your own capital, or B, uh, skilling up your expertise and understanding of markets to get a job in financial markets, whatever that might be. So that being a 9-week program, that is a certified and accredited Level 6 diploma as well when you complete that course. Otherwise, there's a few other things here I just wanted to show you if it's of interest. One is if you actually go— I think it's in the bio actually of the video feed I'm sharing. Let me just see if it is there. I think the guys put in a link. Let me just go on to YouTube. So if you want our YouTube channel right now, if you're not subscribed to to the channel, please do subscribe. If you subscribe and turn on the notification bell, basically me and Sam deliver a morning briefing every morning to our traders. We record that and upload that later to our YouTube channel. Great way for you to learn about fundamentals for sure, but also get an insight to what we do. If you actually go on the live feed in the bio, we actually have in development at the moment a new online, fully online program which is going to be going live later this year. That's going to give the ability for guys globally, those who don't necessarily have access to come to London, a chance to learn about all of the things that we talked about tonight, but lots more. If you're interested in that, in the bio, if you see the first line here, it's got a link. Obviously this course still yet to to be completed, but is scheduled to do so in a couple of months' time. So if you go on that link, input your name, your email, and your telephone number, hit submit, and then I can basically put you on a distribution list. And when that goes live, um, it's basically an online school. It's going to have videos from myself talking about my field. It's going to have Piers Curran, our head of trading, Will DeLucy, our managing director, we're all contributing online content. And so if you're interested in that, you just got to populate that. On the YouTube channel as well, finally, if I go back to the Amplify YouTube channel, something you might find interesting if you scroll down, there's different categories here of content, but there's one here, there's two videos here that might be of interest to you if you've not seen them already. One is Sam has recorded a video of his routine that he goes through every morning. And then there's one here, there's a chap here called Ben Marsh. Ben Marsh was the guy that originally appeared in a BBC documentary which featured us, Amplify Trading, back in 2015. And this video is basically a recording of a conversation between me and Ben about 2 weeks ago. And Ben's still trading, doing really well. He doesn't only trade, he He's in property, he's in lots of other things, but he does trade pretty much full-time, and he's got some really good advice for people who do trade markets, both new and more experienced. He's now been trading for about 5 years, so worth definitely checking out that video if you have time. I will pop the link into the chat now so you have that if you want to watch it. Okay, that is it, session complete. It's coming up to 8 PM London. I'm gonna go home, have some food, get some sleep, and come back in briefing as per usual tomorrow morning. So if you're still trading the rest of the event, good luck. I hope you enjoyed the session, and I'll catch you tomorrow. Thank you very much, guys. Thank you very much for joining us. Samir, thank you. Everyone else, yeah, so Samir, all you need to do is go on that link that I showed you on the live in the, in the bio of this live feed. Click on that link there, Samir, and then input your details and we can keep you updated when that online program is available. M Brown, thank you. Anton, Kevin, the rest, I hope you're well. Everyone else, thank you very much for joining us. Thank you for giving up your evening, much appreciated. And then remember, subscribe to the channel, and you can get daily updates about markets. Always feel free to leave comments on our videos, including this one. Sam and I and Charlie and the rest of the team will be happy to respond as soon as we can. Sherry, Kenneth, Carl, Michael, Alice, thank you. Alright, take care guys, bye for now.