Hawkish FED, Brexit Saga Continuation, Crude Oil Lower - How could this affect the markets today?

Hi guys, still good morning, just gone half 11 here in London. So I'm just going to do a quick run through of what's happened this morning and what could happen for the remainder of the day, sort of driving market price. We had this morning the retail sales out of the UK, which actually worse than expected. I can just drag that into picture here in, in the summary. Here you've got a bit of a miss on all, uh, the core month on month, year on year, and, and just the retail sales flat then month on month, year on year. A bit of a miss of expected figures here. If we go then to the— look at the chart and, and go to 9:30, limited reaction. If anything, you'd obviously expect pounds to come down here. But for anyone that did listen to, um, Anthony this morning talking about— and myself yesterday talking about the down data. Is it really going to be moving off these type of figures? Retail sales, we know, is a volatile one anyway, uh, that the reaction was most likely to be limited anyway. We've had a bit of a break of this trend line going back from the high of the, the week into yesterday's high, which matched up quite nicely on the pivot on the futures as well. We've continued to sort of push higher following the, the break of that trend line. Um, listening to Anthony this morning, and I was just making notes during the briefing, the main things I've sort of got written down is hawkish FOMC question marks. I wanted to know what happened with the US dollar. Did we get a continuation, uh, of the hawkish Fed? What did that then do to US equities? We'll have a look at that as well. Obviously, the more hawkish the Fed are, the likelihood it would be that equities would have come down a bit. What does Trump then have to say about this? If the Fed are perceived to be hawkish, you know, is Trump gonna be too happy about that? Has he made any comments out? Will he continue to do so if that is the case? Other things I want to sort of be aware of. So Fed, China— we obviously had the currency manipulator backtrack from the sort of the Americans last Wednesday when the or Tuesday when we started coming down quite significantly in equity markets. China, obviously the renminbi on a multi-year low, the Shanghai Comp just bouncing off lows on a couple of days ago. So I'll be interested to see as well how that sort of pans out today. So I've got hawkish FOMC question mark, China situation, and then of course Brexit. The main sort of follow-through from Brexit is kind of wait and see. In terms of overall choosing for a market to trade, maybe the pound isn't the best one right now until there's something concrete that comes out. We've gone from October to November and now maybe even December on this sort of deal, so everything sort of keeps getting pushed back. You've got the uncertainty which has sort of led to the pound coming under pressure the last couple of days. However, the last sort of few weeks, if anything's to go by, these positive stories, albeit limited, you're getting a bit more buying pressure into that than if it was the opposite way around. So favoring the upside off a headline rather than, than not. I think if they keep delaying it, you know, yes, the uncertainty will weigh on the pound there, uh, but it's, uh, remains to be seen how, how much lower it can go on the, on these delays, as sort of the market is quite heavily short Going over to, to the, the dollar. So I mentioned I wanted to see what the sort of follow-through from, uh, the Fed was. You've got, uh, really into the back end of the session here from your sort of 7 o'clock PM UK time when the Fed minutes came out, and we had that continuation of dollar strength from that on sort of the more hawkish, uh, sort of rhetoric in, in most members of the FOMC, uh, were, um, you know, had the view of raising rates by 25 basis points. So hawkish reaction, fine, followed through, didn't really materialize this morning. We marked up this level we talked about in the chat earlier for the euro, really good technical point of interest. You've got, um, the sort of the highs of the 10th that turned into the low on that day was also a good area where we tested yesterday before breaking through into sort of the back end of the European session. And now the pivot as well, so holding quite well. In terms of sort of downside targets, as I know a few people were in this, the previous high of the day, albeit at 1 o'clock UK time on the futures, 115.58, is definitely an area I'd be, be focusing on as a potential point of support. Much similar, uh, to the euro yesterday in that the previous level, in this case yesterday, was support, then acted as resistance. So this resistance level could now act as support. Just something to, to bear in mind. And, you know, this would be the market telling me, uh, okay, we sort of unwound that hawkish move, business as usual, not a game changer, uh, as such. But, you know, the— we talked about this this week about the euro being, I don't know, a bit tricky to trade. There's the uncertainty which was kind of brushed off early morning on Monday. Uh, you now got this half hawkish Fed. Am I buying it? I don't know, I'm not too sure. But look, we've come to the bottom end of, uh, the sort of the range that we had from last Wednesday. That's held well, bit of a false break. So, you know, it'll be interesting to see what happens around this level. We broke out this sort of mini range, if you like, yesterday. So for now, overall, I do favor the downside. I think the pivot is a great area to have got short. And for those that are in, I'll be interested to see where your targets are as well. You're looking at the similar area, uh, or not. Elsewhere, uh, I wanted to see what happened to equities last night. You know, if we're going off this sort of stronger dollar, more hawkish than expected, Remember, you know, going back to the rate hike, the projection is for there to be 3 hikes next year. The market has not priced that in, maybe 1.5 for next year on sort of probabilities. So, you know, on that, I remember saying maybe there is quite a bit more dollar strength to come over the next few months, and in turn, what's that gonna then do to equities? We keep having this rhetoric from Trump who ain't happy, ain't happy about the way Powell is raising rates, but it's not really getting anywhere. You know, he hasn't backed off in December— September. December will be really interesting. I think that's a massive, massive meeting. Maybe he gets what he wants there, but, you know, remains to be seen. But yet last night, following the, uh, the minutes, I mean, choppy, but we did come off better levels. And since then we found a really interesting, uh, trend which you can see has matched up quite a few times, has been rejected as well quite a few times this morning, uh, for an up move. You know, now we're coming into the sort of time where the Americans started to come to their desk, the volume starts to increase. I like the look of that to break to the upside. And, you know, let's have a look, let's see if we can then target the, the rectangle areas. However, to the downside, got to be thinking about that as well. You've got similar sort of pattern the other way around. So creating this sort of pennant will be interesting to see if we actually break through here to the downside, and then you're looking to target the circle areas as well. So decision time coming for the S&P, similar to the NASDAQ. In fact, I had this marked up for a while. We come back now to a really interesting point, um, if we go back actually to the Wednesday last week. Similar sort of pattern, which really, once that had broke, you see, then got the retest, but the move continued. And we all know what happened on, uh, on the, on the Wednesday last week. So, you know, not to say the move is going to be of the same extent this morning, but a break of that for me, significant. And the lows of, uh, well, definitely the day, but yesterday could well come into to interest there. I quite like the look of that. Also had written down the oil as well. We had a really good opportunity yesterday on that sort of break of that trend line. It's been threatening to go a couple of days, uh, to be honest. Um, if I just bring that in here as well, you had the, the breakthrough, probably a bit, uh, too to do with the, the final push was to really to do with the, the build in inventories because they're the opposite of the API. Uh, not that that's that unusual anymore, but yeah, the, the sort of breakthrough there. And again, look at that breaking the low, uh, of the day. So it does feel— I mean, that chart here looks as simple as the NASDAQ last Wednesday, doesn't it? Break of the trend, retest, and, and continue lower. So for now, I think you've got to favor oil to the downside Equities is a wait and see. Equities is a wait and see for me. I'll have a break above there and shortly we go test yesterday's low, or we break that lower part of the trend line and we can get down to S1, uh, say the S&P quite quickly. So decision time coming up, volume starting to pick up as well, so could be a bit of an opportunity there. The euro for now has held well at the pivot. I'll be keeping an eye on that, uh, calendar-wise. So let's have a quick look over at how the day could pan out data-wise. If I just bring that into picture, so we had the 9:30 release done, any reaction? No. Brexit, the main driver, comments as well to, to be aware of. Obviously we've broken that trend line to the upside, so sentiment for now, I will continue to, to go higher. The dollar perhaps starting to recover a tiny bit as we saw in Euro above 95 though following the FOMC, so kind of flat for the session. Uh, so we're coming up to midday, 1:30, got the Philly Fed. Look, you can move the market, but it would have to be wildly out of line, and it would be a short-term reaction, I would expect, if anything. And then, yeah, lower, lower tier data for the remainder of the day. Uh, going into the afternoon, you've got Fed's Bullard, but non-voter, so it'd have to be something quite hawkish for me to, to get a move off of that, considering his sort of dovish stance. Um, we've got the, the remainder of that EU summit meeting, uh, into the afternoon. So comments out of that I'll be, you know, keeping aware of. Um, but I think it'll be quite an interesting cash open. I do. I think equities at the moment, uh, well, I say at the moment, from yesterday, you know, we had that break lower, but the buying pressure came back in strong again. We're really getting squeezed in. I think there'll be a good opportunity to, to come for for US equities. Um, let's have a quick look elsewhere, how we're sort of situated at the moment. Uh, the Aussie dollar had pushed higher this morning on the, on the sort of the dollar, uh, weakness, if you like, following a bit of strength that we had yesterday evening. I'd also, you know, for the Aussie dollar, I'll be keeping an eye on, uh, on the China situation. Obviously they've mentioned that renminbi, uh, was at a 21-month low Um, but you know, I think we could have a bit of a recovery here, and that obviously would pan through to, to the Aussie dollar. So while I see pound pushing higher over the next few months, not necessarily from right now, I think a long in Aussie dollar might not be the worst idea. Uh, yesterday's high, I mean, was a fantastic place to get short, funny enough, on that sort of retest of the, the low of the, well, the previous low of the, the second But a breakthrough of that, I'm interested. I'm interested to have a look to go long if China starts to recover. Elsewhere, gold pushed towards the pivot this morning on that weaker dollar, and I'll be keeping an eye on that one test, two test. However, if you start to see the dollar recover a bit, you know, there's an opportunity perhaps on that breakthrough of recent support that we had in almost to follow euro as well. to the downside. Uh, mentioned equities, T-notes. I like the look of a short from higher up. Now whether we can get there today remains to be seen. You've got, uh, if I just bring this into picture here, we've got a breakdown of that trend that we saw last night around here. I like the look of that. That and the pivot, I think, is a very strong strong level to be aware of. Before that, you've got this bit of a potential retest of the trend. I'll make this a circle for a different kind of trade. Also, you've got there the sort of the previous lows that we broke. There's a couple opportunities for the short on, uh, on Tino should we get a retracement touching the lows. At the moment, so remains to be seen, you know, whether in fact we do break to the downside. Oil I think you've got to go with the short for now. I'll be keeping a look at the low of yesterday for a bit of a retest of that. Uh, for the upside, if you know, you always got to half think about where could the reversal come through. And I think if we were to break that trend, maybe this could be something that happens post-2 o'clock when the volume increases, and maybe you get that, that's, uh, oh sorry, not showing the charts. Uh, so just going to run through those again. Oil, just talking about the price perhaps gets squeezed in. I like the look of a short on the previous low, but— and I'll draw this with a circle— if we were to get the, um, the breakthrough of this trend, I'm interested in the, in the long. Gold, just to go back to that pivot, the key area, uh, for, for today to the upside. If we are to see that dollar recover, and, you know, euro could perhaps be the one that really leads that. You know, a breakthrough there. Those are the areas I'm interested in. Um, and Aussie dollar, uh, just on that longer time frame, I think— I don't think I've shown that, so let's have a quick look. If we were to break above that low of the second, I really like the look of, uh, that, uh, to sort of be the point where the market can be interested in to sort of look for this recovery, perhaps China-led Keeping an eye on that 20-month low for the renminbi. Um, any questions, obviously you do get them in chat. Um, I'll put this up on, on YouTube as well, so if, uh, you do want to have a quick listen over. But any questions, let me know. We'll obviously— I'm here for, for the day, and Anthony's on his way back shortly. I hope you all had a good morning. Uh, relatively slow, but you know, things are starting to get interesting, and I would definitely have a an eye on those US equities coming to interesting levels, price getting squeezed in. I prefer personally the, the long, you know, I'd be half interested in the short as well if we technically break that.