Theresa May's departure timetable expected today

Okay, very good morning. I hope everyone is well. It is Friday, 24th of May. Things we're going to cover, as you can see on the graphic here, we're going to look at the performance of what we had this week with the S&P now on track for its third down week, at least for the moment. Um, kind of assessment of this whole week as a whole. And then we're gonna have a look at a few other subjects. Of course, Trump updates on commentary in regards to the trade war. We've got things to look out for in regards to the potential timetable of the departure of UK Prime Minister Theresa May. And then a few other things like ECB policymaker comments that came out overnight, which are also quite interesting. And then we'll have a look at the calendar and then the technical levels as well. So yeah, first things first, just having a look on this, this graphic that I'm showing you at the moment, um, this is looking at the S&P 500 index weekly percentage change. This goes back over the course of 2017, '18, '19, and as you can see, 3 consecutive down weeks is what we're on course for at the moment. And just looking when the last time that that did occur, obviously that big sell-off we had in December, Q4 of last year. That there is the last time this happened. So yeah, what, 5 months, almost 6 months ago now since we last had this type of activity. But personally, I don't find that too surprising, and it doesn't trouble me a great deal, uh, in a sense that I think that this is going to capitulate and this is the end and stocks are going to continue to decline. I don't think that that is the point here. One of the things is, remember, up until this kind of 3-week downturn that we've had, you know, it's almost like a byproduct of the realization that the trade talks with China and the US are not going to be quite as easy as one might imagine. I still do believe, though, in time a deal of sorts does get agreed. It's just that the market got quite overextended on the fact that a deal was going to be done. But we know how the powers that be, kind of puppet masters at play, and particularly Trump tactically, how he plays these types of things. I don't think it's massively unsurprising, but I think this is a little bit of a byproduct, if you like, of markets mispositioning, getting overly positive. And so it's a healthy pullback to around these levels. The other thing, of course, though, that happens in this type of situation when we're talking about the trade war, the impact that that could have on the world's largest economies and global growth prospects, is that this isn't just an equity story. This is also a demand story in the commodity space. Oil is set for its biggest weekly drop going all the way back to the same, basically, period, right when we were around Christmas. We hit right at the bottom of that kind of oil and equity sell-off. So a few things here I just wanted to have a look at on the chart. Firstly, I know Sam will look at these, you know, much more intraday to look at the trading strategies for the day ahead, but let me look at the much more top-level, longer time frames. Now this is— well, what I'm gonna do actually, I've got crude at the bottom, I'll put the S&P 500 on the top on my charts here. And see if I can squeeze this up a little bit here, move that there. So this is looking— then if I just move that over just so we've got the same, pretty much the same time frame. So you can see, um, how, you know, fairly correlated these moves have been given the, the macro kind of driving story, but Where we are technically now, I think, is a pretty decent level. And from— as that transpires into the intraday environment, and as I'm going to discuss what I think are quite positive comments from Trump, I do think there is scope for a potential rebound today. Looking at where we are at the moment, you can see that candlestick or the wick— I know it's fairly small, but we got pretty close to testing around those lows that were seen in mid-May. The resistance points that were seen in late Feb, support that was in, uh, kind of late March, and then obviously that kind of triple top that we had at the Q4 period of last year. And then also areas of significance going all the way back into 2018. So I do think there's a pretty good level here at that 2800, also obviously psychological as well. And we've already bounced off that a decent, you know, 25 points already. Also, what I'm looking at here in crude is, you know, crude had a very violent sell-off yesterday, but that tends to be what happens with WTI crude. It's one of those assets, you know, gold is quite similar, where it tends to capitulate particularly when you have an economic or fundamental driver for direction, but then overlaid with big longer timeframe technicals being broken. The market tends to drop pretty quick, and that definitely was the case yesterday when we powered through $60, which you can see here, similar type of setup. So just make that a little bit bigger for a second. So we broke through like those kind of highs that we were seeing in late March, uh, that low around early May in the $60 handle, and then we kind of snap lower. We were looking at the time that $58.20, that's the key area technically, because again, similar case to this equity move I think we've come to a point now of a strong area of support. I think given the size of the sell-off that's materialized already with the news at play, I think that, you know, this is a pretty good floor now for going forward for the rest of today's session at least. Talking to, um, Tim, who you know in the Trading Live room chat, uh, yesterday, and he was kind of saying that, you know, I was asking him because he looks at the market using VWAP market profiling, and he was telling me that, well, mathematically, the, the kind of fair value, if you like, of crude oil is $58.20, which obviously lines up perfectly with that technical level that we were looking at yesterday and where the market's kind of found its, its footing with this latest sell-off. So the kind of maths and the levels all working out in that respect. But be interested to see how things play out And let me show you this Trump comment, which obviously fundamentally might help ease these nerves that have been kicking in. This comes from Trump saying that basically Huawei could become part of trade deal with China. Now, he classified that company as very dangerous. You know what Trump's like, he said it's not very dangerous, it's very, very very dangerous. So you know he's serious when he says things 3 times. But the important thing here was that he said that despite that fact, and despite that being the main company that's right in the epicenter of this latest technology-focused part of the trade negotiation, he did say it could be part of the trade deal. So it's not being excluded. if you like. And it's almost like a subtle small olive branch that things still could be rectified. Remember, Treasury Secretary Mnuchin said, you know, we've still got basically 30 days before these things kick in. So it's not to say that this deal— not the deal in itself, but this latest stumbling block— can't be surmounted to some degree. So that, with the severity of this— so this news, the severity and the size of the sell-off, getting slightly overextended now, I feel, with the key technical levels of support that are in play. I think we could be in for a moderate recovery today. Big story though, of course, that people— has been really dominating the domestic news flow for sure, that has been Theresa May. Set to announce her timetable to quit as Tory leader. Um, so this has come about because she is meeting with Graham Brady, who's the head of the committee of those kind of backbenchers within the Conservative Party. Apparently that's happening, I believe, this morning, um, and it's going to be looking to construct then the details around the timetable of her stepping down as Prime Minister. So a couple of things here that this Bloomberg and sources have been saying This is that May intends to quit as Tory leader on June 10th, according to Bloomberg, so an election to choose her replacement can begin after President Trump's state visit to Britain, according to one person familiar with the matter. That therefore means that she'd want to remain as caretaker prime minister while her successor is chosen in that kind of political system that we discussed yesterday, where we have those elimination rounds and then potentially At this point, does Boris Johnson become the Prime Minister? Um, so yeah, lots of rumors in circulation yesterday. I'd probably expect the same to circulate today in regards to her imminent resignation. Now I must stress, I do not see that happening today, partly as well the other reasoning being is that we had the UK part of the European parliamentary election yesterday alongside the Netherlands. We get a couple of other countries. I think it's the Czech Republic potentially today, but then the big boys— Germany, France, Spain, everyone else— comes predominantly on Saturday. As a net result, results aren't due until Sunday. I don't really see any sense in her immediately stepping down as of today, um, not until those results probably come out. I'd anticipate potentially over the bank holiday something might materialize of more concrete nature. So we'll see. How much is this going to move the market? Well, I think an immediate resignation is probably the most market-moving because I think most people, most consensus thinking is probably fairly aligned with my own in that that's probably the lesser likely and therefore would be the most impactful because then the markets would have to immediately price in the prospects of of, you know, if she wasn't going to be a caretaker Prime Minister, well then it kind of is thrown into a very short-term disarray because it's going to take at least 6 weeks, if not longer, 2 to 3 months, in order for the next Tory leader to be appointed. The pressure there being to get it in before summer recess, of course. So yeah, that would be the most market-moving— her outlining her timetable of departure if that did happen. Is that just a sell— hit sell button at market? I, I also don't think so. I think this has kind of been bedded in, and this explains why we've had this kind of repricing of sterling over the course of the last week or so, as this has really kind of hit its, its boiling point more most recently. So that's how I'd kind of approach things. I definitely think you need to keep an eye on Twitter. Keep an ear out on the squawk, obviously. Strangest things have happened. Other final story I wanted to look at, and then I can hand you over to Sam. This is in regards to the ECB. I just thought it was quite interesting because this comment from Vasl, or Vasl, I'm not sure how you actually pronounce that name because I don't think I've ever heard them speak before. This is the Slovenian central banker, I believe, came into power in January, but commented that with the ECB— I mean, to give you some context, the ECB are gearing up for their meeting in Lithuania in 2 weeks' time. This next kind of interest rate meeting, it's going to include, of course, their latest forecasts, but importantly, people are looking out for the discussions around how they're going to conduct this new round of targeted long-term refinancing operations, the TLTROs. The comment though that was made by this ECB member is that they were quite confident the economy is on the right track and that's what's happening in line with what they're expecting. So potentially, yeah, a little bit more kind of playing a straight hand rather than people getting, um, running away with thoughts that the ECB are going to turn kind of radically dovish just given the, the obvious risks associated with the trade war. We know the US haven't really fully turned their gaze onto Europe as yet, but we've obviously seen it impact the likes of Germany being an export-led nation already, who are also suffering layering in the risks around Brexit. But interestingly, you know, we look at the chart down here, this is the economic rebound, and basically to make a bit more sense of this this was the ECB March central projections. So these are the ones that will be due for updating in, in 2 weeks' time, and that's in black. But you can see the actual quarterly GDP growth in Q1 of 2019, so this bar here, actually came in much stronger than expected, you know. So despite all the, the kind of negative things that might be occurring, whether politically or economically in some nations, the overall your area is performing. So yeah, I just thought I wanted to share that with you. Um, otherwise, just having a quick look across the broader charts again from a sentiment point of view. I'll let Sam talk over the technicals in more detail. So equities index futures are positive as I'm speaking. The DAX is rallying. So again, fitting into that kind of story that I've been trying to describe this morning is how things kind of stand at the moment. That also— there's quite a dramatic turnaround in the dollar yesterday, and it's continued to pull off, and so hence has supported both the major currency pairs. Now, I would say the, the uplift you've had in EURUSD and Cable is more potentially a dollar story than it is unique to that of anything positive happening in the pound, for example. Potentially a little bit of a read across in these ECB comments I mentioned, but quite frankly, the Slovenian member seldom is really listened to because not one of the big major hitters. So I think it's more of a dollar narrative. If you're trading those pairs, that's what I'd be watching— any continued retracement in the dollar, then they'll be looking to play that accordingly. And then oil also having a bit of a rebound given the dramatic sell-off yesterday. This is quite natural, uh, price movement. I guess the nearest short-term target there would be upside resistance seen at the pivot, which pretty much coincides in the futures with the 59 handle in today's session. Calendar-wise, uh, what's on the agenda? Let me just show you. You've got UK retail sales was scheduled for yesterday. I'm not sure the reasoning of why it got delayed, whether there was any read-across given the fact that there was the voting happening. Not sure, but besides the point. We'll be looking out for that at 9:30, of course. Impact value from, from retail sales— I mean, it's a tier 1 piece of economic data theoretically, but obviously just given the context of the current state of play I don't think it's going to be particularly market moving, not unless it's something radically out of line. And even then, it could well just be a short-term move. Speculative prop traders just might just want to get in and out rather than hold any type of position, especially with May meeting Brady later on this morning. On that point, just keep an eye on my Twitter handle. You can see it shared on my— underneath my, my visual at the moment. I'll tweet any updates and I'll update trading live as and when I have a definitive time when that meeting's happening. Otherwise, in the US session, durable goods in the afternoon at your 1:30s, Baker Hughes. Otherwise pretty quiet. And not forgetting as well, it is a, a long weekend in both the UK and the US, so Memorial Day And then we've got the, the holiday as well here in the UK. So just to re-emphasize, the Amplified Desk will not be open on Monday. Markets, if you are looking at them, will be, um, barring anything shocking happening in the news front, particularly I guess mainly around the trade side, which I don't anticipate, then it's probably going to be incredibly quiet until we, we we commence services on, on Tuesday. All right, let me hand you over to Mr. North and he can, uh, look at the charts from a technical, technical perspective. But otherwise, with that, I wish you a great weekend. Thanks very much.

Good morning everyone, hope you all had a good week so far. Uh, like Ant said, the DAX pushing, pushing on here to, well, new high of the day. And I think it's gonna be a, an interesting morning into the afternoon. Yesterday was, I think, really great conditions for, for trading. I think the— what day was it? Thursday. So Wednesday was, was pretty tricky. Yesterday we got quite clear directions, good correlations. Uh, always a bit, uh, tricky perhaps the next morning as well when you start seeing these reversals. You think maybe the next big leg down is, is going to come, uh, I wouldn't be— obviously, well, the market's telling you right now this is not the case. However, where are the key levels, the lines in the sand? Where is, uh, uh, where would you need to be aware of, uh, for equities if they're gonna keep reversing, or are they then gonna head back lower? I think just for, for the DAX, obviously we've just gone through 8 o'clock, so things are getting a bit more tasty. You can see above where we're trading now. We had the low of Wednesday, decent breakdown, uh, yesterday around the similar sort of time in the pullback there. So we're keeping an eye, uh, on that price point. Um, if it was to get through there, you've still got obviously quite a few key resistance levels, most notably the initial Asian session low, really good retest of that, uh, around 745 as well. So quite a few key levels. By no means is it, uh are these equity markets out of the woods, but a decent recovery yesterday, uh, and I would be very surprised if we were to have a very strong push lower, uh, going into the back end of the week. Almost a double bottom in, in equities. I know earlier in the week— if I just move my chart out the way— the, the break of the trend, if we have this on, you see early in the, uh, the morning yesterday Uh, it was obviously quite key, uh, and that every sort of support that it was met with, uh, was only brief before going, uh, back lower. So those key levels, similar to, uh, the DAX that I'd be aware of, just you have the breakdown of, of S1, uh, was also good resistance. So keeping an eye on that 2836 on the, uh, the futures before potentially looking a bit higher up at 43. These would be key levels that I would be looking at, uh, as well. Probably worth just noting though, we have in a similar sort of fashion broken above this trend from yesterday, which was controlling prior sections. So things are turning around, um, as is the case with days where it goes, you know, high or low quite, uh, quite extensively. I would always look to potentially have on any sort of trend lines from, in this case, the lows. And if they were to break, then you could get a continuation rather than maybe looking to sell higher up when you have such a, a big day to the downside. Uh, potentially the, the break lows are, are where I would, would focus on. So same for the NASDAQ, just looking at those lows. Can we get a trend line? Okay, you've got a few tests here. If that was to break and things were in correlation with that, that could be the opportunity to, in this case, get short again. For gold, it would be the opposite way around. Do we start getting a trend line from the highs? Doesn't look too good. I guess you've got a bit of a false break, so I wouldn't have that anything on there at the moment. I guess you've got the top end of the yesterday's range at 1285 that I would be keeping an eye on as well. Also, for those that use Fibs, probably worth on these moves as well, just from the, the lows of yesterday in case of gold. Where it matches up with another decent level of support or resistance, uh, and go about it, uh, that way. Of course, gold on that longer term chart, we can see yesterday really strong push to, to the upside, and where the, the trend line from that low of last year was holding so well on, uh, what day was it, on Wednesday, uh, before breaking through on, on obviously yesterday. We're keeping an eye on that still as well going into the back end of the week. Looks to come in around 1279, uh, today. Uh, also longer term levels, we'll go through this throughout the day as well, but of course pound cable on— I'll just move my chart just to start that trend line. The 2017 low, 126 support that we had back in December last year, keeping an eye— sorry, on, uh, on that as well as we go into the back end of the week. Another market that obviously had a decent day to the upside yesterday, uh, well, eventually, was, was euro. Uh, key, key level around those lows. I saw a lot of tweets talking about how people were taking longer-term profits at that area, and you can see why. You can see why. Really key, um, support going back to the back end of 2016, early 2017. And really strong reaction. Of course, that doesn't mean it's out the woods at all here. And again, just being a bit careful with some of these markets where you perhaps don't understand the moves. Well, just leave them alone. I think, uh, could be the, the better way to look at it. If you are in favor of going short euro against the dollar, have your lines in the sand. Where's the key level support? Well, use that maybe as the break to, to then give you the, the cue that actually sentiment is then to the downside. Could be yesterday's high. If we break underneath that, come back to retest it as resistance, for example. But things just reversing across the board, so just be slightly careful of that. And mentioned, of course, that, that key level, key area, uh, in, in oil, uh, decent reaction, uh, around that point, albeit a little false break yesterday, but We're back above there now, so quite key to keep an eye on how we go into the back end of the session there as well. Any questions, as usual, obviously please do, uh, do let us know. Uh, obviously some interesting opportunities potentially, uh, as we go into the back end of the day. It's a quick look over that calendar again just to plan the morning. 9:30 retail sales. So for the pound We've had a bit of a push this morning. We are starting to see a bit of a reversal there. Probably still a bit of time, I guess, for a trade, but looking to come out of that around 9 o'clock. Uh, with the equities, uh, the durable goods unlikely to really move things. So those trend lines will be key. Perhaps looking for the Q from the DAX to see whether we can also break those as well and then get continuation to the downside. But at the moment, as long as it's above, I'll be favoring or not favoring going short aggressively. Any questions, please do, uh, let us know. I hope you'll have a good bank holiday weekend, uh, and I'll catch you in the chat today.