Making America Great Again one tweet at a time

OK, very good morning to everyone. Of course, happy Fourth of July. Actually, before I— don't want to let Sam down. Gotta put the cap on. I don't know if you can quite make that out, but whilst I talk about our Commander-in-Chief, I better, I better keep the hat on. So of course, 4th of July, this does have quite clear, um, effect on financial markets from a trading point of view. Likely to be incredibly quiet, particularly later on this afternoon. And certainly a day for— if you're a professional prop trader, you definitely wouldn't stick around in the afternoon because lo and behold, you'll probably end up just getting frustrated or bored, and that could lead to inappropriate trades for sure. So Definitely the morning might yield a few potential trades, but then probably I'd recommend start winding things down. I mean, the sun's out, Wimbledon's on, you know, this is why we do what we do, to give you the opportunity, the flexibility in the way that you work. So yeah, definitely would keep that in mind when it gets this afternoon. But with the, the theme being making America great again Perfect timing, right? Couldn't be better for Donald because this was the S&P 500 yesterday. We of course were looking at this over the, the G20, the gap up that we had. If you remember on Monday, 4 days ago, we were kind of saying, well, now we've, we've got above that previous all-time high, that kind of area here, that was kind of a good support level now. For then the eventual push higher. And it's not that anything on a kind of micro level has changed, it's just the idea that essentially now we're up and we've broken that, that level, then 3000 is the obvious target. It's kind of that behavioral mentality of markets. And as soon as we hit 3000, that's it, we kind of hit it and we've just drifted a little south since then, but we're pretty much sitting right at the figure. So lo and behold, what comes out? Well, It comes out in force, of course. This was a string of tweets that Donald Trump has been putting out. Today's stock market is the highest in the history of our great country. This is the 104th time since the election of 2016 that we've reached a new high. Congratulations, USA. So that's one. Two, Iran's issued a new warning. Rouhani says that we'll enrich uranium to any amount that we want if there is no new nuclear deal. Be careful with the threats, Iran. They can come back to bite you like nobody's bitten before. I like that one. That one, I like the finish on that one. Strong. Then he comes back. Mexico is doing a far better job than Democrats on the border. Thank you, Mexico. And then he drops in, of course, did I not mention S&P 500 just hit a new record high, up 19% for the year. Congratulations. So the point I'm making here is that we're going to get to the main comment, the one that people have been focusing on when it comes to Donald Trump. And that, of course, is this idea about— he threatened— I'll show you the tweet in a second, but in a nutshell, be prepared, quote, for anything as Trump slams Europe and China on FX. So this is the tweet that he made yesterday: China, Europe playing big currency manipulation game, pumping money into their system in order to compete with the USA. We should match or continue being the dummies who sit back and politely watch as other countries continue to play play their games as they have done for many years. So if you remember, we, we finished the G20 and things were all looking quite positive. Markets responded in kind, kind of a de-escalation, if you like, on the main issue between that of the US and China with this, I guess, temporary in nature freeze on any increase on tariffs. And then you get this type of comment, but importantly What I want to stress here is the disconnect between what's being put out there and then what the markets look at. What the media focuses on, what the public focuses on, and what the market looks at are two distinctly different things. Because if you look at Trump's tweet activity, I mean, he definitely must have a sore, sore finger this morning because he was firing them out like nobody's business. And that's absolutely to be expected because it's the Fourth of July, of course. What better time than to really put out, renew in the psyche of the public, the great things that you've done. The stock market tweet, the Iran being harsh in the Middle East and controlling of that region, the border, and the fact that again, taking a pop shot at your opposition, the Democrats, then you talk about the S&P again, then you reemphasize the manipulation, which has been the kind of narrative ever since he did the campaign trail back in the beginning of 2016 before he came president. So it's a great PR move by Trump, and it's classic. He is the marketeer, if you like, hence I think why he's had such great success in some ways. But this— markets see straight through this. And so when you see what looks like quite a U-turn on the general positive nature of how the G20 finished, actually it doesn't mean anything because we know that this is just literally a marketing stunt in order to, to get certain points across, given the significance of the fact of it being Independence Day of all holidays. So making America great again, showing how much you're fighting for that that ideal is a very important and forceful political message. What the markets think, we know this is just him doing what he's doing. It doesn't really mean anything. And so, you know, there hasn't been a reaction to that comment. As much as it might seem negative and the financial press might dramatize it as being, you know, a U-turn in his stance, that's all baloney. To put it in an American phrase, because ultimately we're up at record highs. So yeah, couldn't be better timing for Trump, of course, obviously, as people celebrate this holiday. But let me have a quick cycle through the other headlines. I'm going to remove the hat because that's the Trump section done. Um, UK, this is something which is, is being particularly interesting. Um, this is something called the the Citi Surprise Index. And basically, in short, what it looks at is it looks at economic indicators and it looks at what is the consensus estimate, and it looks at how much does the actual figure deviate away from what is expected by the analyst's expectation. Now, what's been happening here is this surprise index then kind of calculates then the number of what has been substantially, substantially large misses in UK economic data. And of course, this week we've had the kind of suite of PMI releases for manufacturing, construction, and then services yesterday. And they've all, particularly the, the two former ones, been particularly weak. I think it was, what, the weakest since 2013 and the weakest since 2009 respectively. And so downside surprises in data in the UK have kind of ramped up all of a sudden. What has that led to? Well, It's led to the likes of Mark Carney, remember, earlier this week, and he was followed up by his kind of deputy Cunliffe, as talking about the idea that we need to— the prospect of a no-deal is rising and therefore opening up this idea of rate cuts. And what's so interesting is that 2 weeks ago, we were talking about the Bank of England when we were covering the rate decision. We were kind of talking about them in the sense actually they're probably the one remaining more neutral, possibly sounding hawkish central bank compared to all the other global central banks who are very much in an easing and accommodative policy mindset. However, what's happened is— this is a chart here I'll show you in a second— but given the commentary out of the Bank of England, given the weaker surprise of the economic data of the UK, the probability of a rate cut in the UK by the end of this year has risen by risen to 53%, and that's doubled basically since the end of last week. So within one week, the prospects of a rate cut in the UK have doubled. I mean, that's what it looks like on it on a graph, and certainly, uh, it's way higher than it has been, which is peaking up at around the, the 30%. Remember, if you look at it, look at the timing of where the previous peak was here. Of course, let me transition my screen. This was it, this was the previous peak of 30% odds that we had. This was the end of March, and if you remember, the end of March of course was the proposed end of Article 50. However, we know that's got bumped down the road to the end of October. The threat of that though, before that date moved, obviously brought about this idea of potentially a no deal accidentally happening, but it didn't happen. And we're kind of here we are again, although the odds are getting even higher because, again, not only about the, the economic slowdown, but the fact you've got Boris Johnson looking all but likely to become the Prime Minister going forward. Interestingly, given the, that last point about Boris Johnson and obviously him sticking his name to the, the mandate of kind of do or die, deliver and and that's it. As much as I don't think that's the case, and I do believe we'll have an extension beyond October. But at last, the opposition party seems to be doing what I think could be the, the best strategic move, which is reports now suggest that Labour plans to position on Brexit and a second referendum before the summer recess. Now, you know, this has been I guess the political tactic of Jeremy Corbyn is that whenever there's a lot of Brexit-related news and struggles within the Conservative Party— we saw this through the various no-confidence votes and the voting down of the withdrawal bills of Theresa May multiple times— Jeremy Corbyn tends to go very quiet. In fact, he's hardly ever seen. And I guess his strategy is, well, let the Conservatives self-implode. And then I'll kind of come in at the last minute, and then I'll give that credible other alternate kind of opportunity, if you like, to the public. But that really hasn't paid off as we've gone further and further down the road. And its lack of commitment, I think, to a second referendum has really held back the popularity for a credible alternative choice. And what's been happening as far as recent political events are concerned, as well as polls, is that the only viable option then for pretty much half the entire country is to vote for either the Liberal Democrat Party or the Greens, who've really stuck to this idea of having a second referendum on the final deal. So I think Labour coming round to this— obviously the number two, if you like, Tom Watson, has been a big backer of this for a long period of time. It's been Jezza who hasn't. But the point being, if he does come round to that, I think that does then start to throw up a very interesting prospect. If they brought forward and really committed to this second referendum from the top, from Corbyn, and that became the new mandate of the Labour Party, well then if that gobbled up then the support of the Lib Dems and the Greens, I think you've then got a credible thing here. That could happen going against what is this kind of polarization of the situation between a hard Brexit Boris or a complete just opposite second referendum. Outcome of that, who knows? I mean, ultimately it's a 50-50 thing that the first time round, uh, and who's to say it wouldn't be the same again? But I think that's the, um, it'll be interesting to watch this develop if that did happen. Perhaps it could lay some short-term, medium-term support to the pound. The idea then that you might have this, um, collective, almost coalition of opposition coming together under the idea of a second referendum, which could ultimately lead to a softer Brexit or no Brexit at all situation. Okay, quick look at the calendar for today. That's it for the news, I'm afraid. There's not really a great deal going on. So as far as the calendar is concerned, it is particularly quiet. There really is nothing going on. So again, if you're a new trader, you have to objectively review the conditions that every day offers you. Today really should be a day where it's highly likely that you wouldn't trade, not unless a) something surprising does happen, um, or B, there's a particularly good technical setup for maybe a range trade. But as we get further into the afternoon, what typically tends to happen is we get to the kind of early afternoon, most people in UK and Europe kind of start, um, winding up their day because the fact is there's no additional volume coming in stateside. And then with major US markets closed, um, that's pretty much it. So the best of activity, if any, is probably likely to happen over the next couple of hours and then die down. Final point, just had a comment here while I've been talking from the Chinese Commerce Ministry. Says US-China trade teams are communicating and existing tariffs will have to be removed if US-China could reach a trade deal. So that's the latest we've had here out of the Commerce Ministry of China. OK, that is it from me. I'll hand you over to Sam. and then I'll catch you in the chat room later on. Thanks very much, guys.

Hi guys, hope everyone, uh, is doing well, and of course, happy Independence Day to everyone listening in from, uh, America or who is here in America. Uh, as Ant mentioned, likelihood is it's going to be pretty quiet. You're not necessarily looking to trade the range in T-notes is about 6 ticks, and that really sums it up. Even in, in S&P, the NASDAQ, it's very small this morning, which you would expect, of course. So if we have a quick look over at stocks to begin with, we know S&P hit the 3,000 in the cash. And if we have a look at the, the main equity market that Donald Trump wants to hit the all-time high, the Dow Jones, certainly on the futures anyway, is getting very, very close to that level. Uh, still not hit it, but just this morning, well, I mean, very— I mean, literally a matter of points. So that would be something to keep an eye on if that was, uh, to break through. And obviously you can see a bit of a reaction to that high for now, uh, as we, we approach it. And of course, if that goes, we know who's going to be tweeting about it. Looking more intraday, and you can see that range for the S&P is, is pretty, pretty sideways, pretty quiet. Not expecting too much to, to really kick on from there. Yesterday we had a, a nice opportunity after the cash open from what was the previous high that we had on the first of this month. You can see we came back down, hit it very nicely. If we could get down to the pivot another previous high, I think that's not a bad place to, to get in. And, and, you know, for that slow range-bound trade. And S1 also with these areas. But for us to get down there 7 points from, from now, I'd say it's highly unlikely to then, you know, have a decent push from those points. So just being a bit careful, realistic, uh, of all of these, these trades for the, you know, US products. Having a look at the, uh, the euro here, we can see a couple of half-decent opportunities yesterday. The R1 spike higher to the high that we had yesterday afternoon was a great trade. The break lower of the trend as well for a bit. But again, you can see the, the range that we're in now, pretty, pretty flat. And unless we were to, to break to, to the downside, uh, past these lows, I mean, even then it gets quite congested. With some support that we had from yesterday. Let's have a look, see if we can get any of these trend lines in. You can see it's not bad, from yesterday's low to the afternoon evening low, and then again today. So it's been respected. So it might be worth just having a look to see how we react to here. You wouldn't want to be going aggressive, I would say, on this, this euro, uh, more looking for a retest of that level before really wanting to, to get in. But that could be something that you're looking at from, from that point of view. To the upside, price getting squeezed in, but again, not looking to, to go too aggressive in the, uh, the currency markets. The pound up towards those highs. R1 looks relatively interesting with some resistance from yesterday and the low of the day, uh, sorry, I should say low of yesterday, uh, with S1. I'd be very surprised if we broke out of that range and closed out that range. So both of those as a range-bound trade, not looking too bad. Maybe the short, uh, the favored one, just considering the pound's run for now. But of course, with Trump trying to talk down the dollar, uh, could be a tricky one. And you've got to imagine he will be tweeting away to today as well. Uh, having a look at gold here, so we have just pushed down lower this morning and a little bit of a break in the, the lower volatility. We did come back to retest this trend line, as you see, quite nicely, keeping an eye on that low from yesterday. The highs around pivot and also the— well, yeah, around the pivot and the highs from yesterday afternoon where we had a bit of a breakdown after midday could be another interesting point to keep an eye on. We were getting squeezed all morning, so keeping an eye on those two trend lines. You can see a really good opportunity yesterday was— you can see it's still marked up here, that break of that trend as well. However, all these, these trade ideas are quite optimistic for them to come in and then work to where you would hopefully get a nice 2:1 risk reward. So I wouldn't be expecting too much from the market today. Of course, stranger things have happened, but I would just be realistic in, in expectations. Expectations. Having a quick look over at oil, which actually has moved a fair whack. Uh, yesterday's lows, which is also the low that we had back on Tuesday as well, obviously an area to keep an eye on. S1 holding that up for now. Uh, obviously we've retested it once we have broken through, but what was the low of yesterday evening in the morning is that offered good resistance. So 56.86 level to, to have marked up. However, how we get there will be important. Will we break this trend line aggressively? If that was the case, I wouldn't really fancy the short and might be prioritizing a bit higher up around 57.09, for example. But you do— no, don't necessarily want to get too complicated for these markets. And yeah, just, just thinking about the situation and at hand with the volume low. I mean, just having a look at that calendar, you can see just how, how dead that is. We've got retail sales out in an hour 30 from May— not even from June, from May— a couple of speakers, uh, well, one speaker left, uh, de Guindos at 10 past 10. And I'm tempted to say that will be that. Um, obviously Dow Jones pushing to a new all-time high could, could see something there, and the break of any of these ranges might lead to some something interesting. But keep your powder dry and be patient and not too aggressive with the entries would be, would be my, my advice. But I hope you all have a good trading day if you are trading it. And if you're over in the States or celebrating here as well, good Independence Day. Hope you enjoy your celebrations. I'll catch you in the chat if you're sticking around, but if not, I hope you Have a good rest of, uh, rest of your day.