Will Trump Agree To The Trade Deal?

Okay, very good morning. It's Anthony here at Amplified Training in London, and it's Friday the 8th of November. A very good morning to you, and a shout out to my boys at Regent's College. You did dare me to give you a shout out, so there you go. Hope you guys are well. Hope you enjoyed the session yesterday, and I hope you enjoyed your golf. Last night at the driving range. So see you next time. I'm going straight into the briefing though and talking about things to discuss this morning. Obviously the main focal point of markets is going to be the trade ongoing dialogue. It almost feels like reading the news this morning, having been off the desk yesterday afternoon, that the market's a little bit indecisive about what to take from this current state of play. So I'll run you through the latest kind of update. Seemingly there's a partial agreement. The Chinese, as we were saying this time yesterday, have offered what they want. There's kind of Larry Kudlow, the economic advisor, yesterday kind of saying yes, this kind of multi-phase and rolling back of tariffs is being discussed. But then Peter Navarro kind of said something different. Then some source comments came out. So very much classic trade war developments at the moment, which means that One of the things Sam said as a joke this morning, but I actually do think might become a reality, is that Friday feeling. And you get the kind of, your spidey sense telling you that Trump really hasn't commented specifically himself at the moment on the situation. And obviously the power lies in the president's hands. And does he, does he not want to give up some of that leverage on the tariff weapon or not? You almost feel like it's inevitable at some point today he's going to say something quite meaningful on the subject. So at the moment, markets across the different asset classes, as you can see, are relatively quiet. In terms of the S&P, we are well off the highs that we've seen yesterday after some of the positivity. We'll look at that a bit more detail when the market kind of dipped at the actual Wall Street open, some fears just creeping in about the ability to get this, this partial one-phase deal over the line, including the rollbacks as we discussed. But still up, generally speaking, from those initial headlines from yesterday morning, albeit much more shallow than where we were at the peak of yesterday's session. Currency markets, things are particularly quiet. The dollar index is basically flat, so major pairs EURUSD and Cable are basically unchanged on the session. Um, we did see a little bit of movement in Aussie overnight, so I'll update you. They had their quarterly policy statement out last night and it was quite dovish, and so you did see a bit of a move low in Aussie, but perhaps counteracted by— you had some fairly, um, okay to decent Chinese export data in latest trade numbers, which might have counteracted any further follow-through on that move. Elsewhere, oil markets as well, just drifting a little south. So quite interesting here if you're kind of mapping equities and oil prices fairly well correlated, because some of the biggest driving themes here is the ongoing trade war. And a positive trade war is positive for demand for oil in terms of its initial pricing and implication going forward. And as people get a little bit more tentative about what they're hearing from the headlines, oil's just been backing off as well in a similar fashion to equities, and we're down about 60 cents at the moment. $56.55 it trades in the futures. Okay, so let's, um, transition my screens. Let's have a chat about the current state of play then, a couple things perhaps to look out for today. So the US and China agreed to roll back tariffs on each other's goods in phases. Now the thing that's a little bit different, that's the same headline from yesterday, but both have come out and now confirmed this. So as they said, the economic advisor Larry Kudlow confirmed they're in advanced negotiations. He did say, quote, if there's a phase one trade deal, there are going to be tariff agreements and concessions. The thing that though that's happening is that there's a lack of commitment from, from the top and also details. So still quite a lot, I think, for this particular phase of dialogue to play out. A senior White House adviser also said on Thursday that Donald Trump is, quote, anxious to sign a deal. The negotiations are ongoing, and the time and place for any signing for the pact is yet to be confirmed. So it still hasn't been nailed down as yet. The White House trade adviser, so that's Peter Navarro, said on Fox Business last night that there is no agreement at this time to remove any of the existing tariffs as a condition of phase 1 of the deal. The only person that can make that decision decision is President Trump. It's as simple as that. And so again, that rubber stamp hasn't come as yet, and almost feels like I'm repeating what I was saying yesterday. I think there's a degree of caution in the air about— we always have this positivity, looks like we're making progress, the market responds in quite a meaningful fashion, and then it all kind of comes undone right at the last moment. And really, the balance of power will come from Trump at point today. I think you're gonna see that. Now, a few other things to have a look at. This was what Reuters were reporting. This is kind of the headline from yesterday. And to give you the, the crux of the Reuters article, they are citing multiple sources familiar with the talks. So these are unidentified sources. I'm saying an agreement between the US and China to roll back existing tariffs as part of Phase 1 trade deal faces fierce internal opposition in both the White House and from outside advisers. The divide within the administration over whether rolling back tariffs could give away significant US leverage going forward in the negotiations. So exactly as per our discussions the other day. So yeah, summary of this event is Obviously we rallied quite aggressively when the Chinese made this initial first step yesterday. However, this was the move that we saw in the S&P 500 at the open of the US stock market yesterday after the plan to ease tariffs faced a pushback inside the White House. This was that Reuters report that started to circulate. And so again, my main point here is I would be absolutely vigilant for Donald Trump to really make the decisive point here. And again, if he, if he does agree and he says actually we're gonna go ahead and he confirms a partial phasing out, which would mean step 1, the not the, the stopping of the implementation of the mid-December tariffs would probably be the first phase, that in itself I think you'd get again an aggressive reaction response in markets in a positive fashion. So oil up, stocks up, um, it probably leads to higher yields in the short term at least, and then gold coming under some, some further pressure. But I would say if I'm gonna side on either way of which this could go, I just think— I still think that that's not going to happen. And I think if anything, the chances will be that he'll want to prolong this out a little bit longer And I don't think that that leverage is gonna wanna be given away so quickly. I do though think that in the medium to longer term, that the phasing out deal is one that will happen, because I feel that is Donald Trump's way of managing the stock market to be where it needs to be in 12 months' time to win a second term. What I mean by that is, by partially unwinding the tariffs in a phased-by-phased deal, you basically keep, you keep the foot on the gas, the pressure on China to deliver and follow through on its commitments as part of its pledges on their side of the trade deal. So it's kind of like the best of both worlds to try and manage the market and its perception about its impact on global growth, appeasing your domestic base and keeping the pressure on China to deliver. So I do think that this is going to go down that route. I just think that timing is of the essence, and I just have my reservations about it coming through as soon as, as right now. The one thing though that has been quite evident is this is now looking at the weekly performance in percentage change for the gold market. I know a lot of the guys here on the, on the floor have been trading gold. It's kind of been a bit of a blessing of fire for any of the junior traders because because it's quite a volatile product to trade overall. But it has seen one of the most significant movements. And the benefit, of course, of being a global macro trader is we look at multi— multi-asset. So it's about identifying then across a variety of different products rather than just focusing in one specific kind of asset class in that respect. And gold has seen some decent moves. You can see here on the percentage changes, it's pretty much down 3% on the week. That would be the biggest weekly loss in more than 2 years for the yellow metal. And this, of course, has come with what has been overall a little bit of positive progression on the singular biggest risk for global markets, which is the trade war. The last time— you can see here, you've got to go all the way back to really Q2 of 2017, the last time we saw gold take such a big hit as it has done most recently. A few other things though that have happened, uh, perhaps just helping to put a bit of a floor under any deepening or worsening of sentiment is the fact that some Chinese trade data came out last night. Chinese exports declined less than expected in October, so a little bit of optimism coming in, in what has been a significant decrease in their general trade data as some of these signs start to come of a potential interim deal with the US, but imports did contract for the 6th straight month. Now, from a graphic point of view, to kind of visually represent where we're at, obviously Q4 of 2018 was when we saw this massive dip in Chinese imports from the US. That was right in the crux of the severity of the, the kind of equity market correction and also the escalation of the trade war. So So we have bottomed out somewhat since that point. Chinese exports to the US, you can see, is still significantly lower, but we have had a pickup here in the imports from the US and overall a bit of a leveling out in terms of exports and, and imports in dollar terms, albeit still in negative percentage for all four of those readings. The other thing we had overnight, I did briefly mention, we had some commentary out of The RBA in Australia, they released their quarterly policy statement. A bit of a summary here, the first paragraph kind of wraps it up. The central bank took a decidedly dovish turn on wage growth and inflation, forecasting figures to stay lukewarm over the next 2 years, citing them as a major reason it was prepared to further ease monetary policy. Again, they stood pat on rates earlier this week following 3 rate cuts to take their rate down to 0.75%. 0.75%, sounding ever very familiar to the Bank of England. Of course, not only is the Australian interest rate the same as what it is here in the UK at 0.75%, but, uh, the Bank of England, of course, with their quarterly inflation report, or monetary policy report I should call it these days, saying that inflation is going to remain below target effectively for the next 2 years. So again, weakening demand or inflation prospects given the slowdown in global economic growth, and obviously for the UK with the inherent risks surrounding the political situation. But the RBA, similar, opening the door for potential further easing. Market pricing is that they're not going to change rates for the rest of this year, but I believe I read this morning, if I recall, 60% probability that they do cut rates in 2020 is what's priced in for the RBA at the moment. Okay, let's get the calendar up. What have we got on the session today? Um, for this morning it is relatively quiet. The French trade data I don't think really carries much sway for European assets, so focusing really into the US afternoon. And from a data perspective, no major really 1:30s coming out of the US. We get Canadian jobs data, so the loonie always quite responsive to that if if you're looking in the FX market. Otherwise, from the US, you got the preliminary November University of Michigan sentiment. That's looking to remain roughly unchanged from the prior month, if going off street expectations. The Baker Hughes rig count for any oil traders later on. Uh, speakers-wise, you do have Bostic and Williams. They've already spoken overnight. What did Bostic say? Uh, is a non-voter, um, but did say that would have probably dissented against the last rate cut if he had a vote in in the monetary policy meetings because the US economy is solid and not in need of easing. So quite interesting then to see this kind of hawk-dove divide, but pretty much then in fitting or in keeping with the notion interpretation that the Fed meeting last week was that they're kind of on hold for the moment and will be responsive to incoming data and developments in the economy and taking action as they see bit. So a little bit more on the hawkish side. Didn't see anything out of Williams specifically, but then you've got Fed's Daly speaking later, again non-voter though. That'll be at 4:45. And Fed's Brainard, a voter but speaking into the weekend, won't be until overnight. Main thing is though, I'd say everything on this calendar is a second, second place to the trade war headlines. And all eyes on Donald Trump, as I said. And what does he say to see off this week? Because knowing what he's like, if I think about his behavioral pattern, Donald does love to shake it up right at the end of the week. So what I'll do later on when I have his full daily agenda and specific timings of where he's going to be and what is— what he's doing today, I'll share that into the chat room. and I'll tweet it as well from my Twitter account. All right, that's it for me. Wish you all good session ahead and a great weekend, and I'll speak to you later. Thanks very much.

Yeah, hope, uh, we're all doing well. Um, we're bringing in a couple of longer-term charts that I was looking at yesterday, actually, just to get things started. Considering we're on the last day of the week. Bringing in here silver and, uh, and gold. And we just yesterday touched down the, the lows of October, both on these markets. And the fact we twice, uh, tested that low, which I'll just circle up now, from the 1st of October and failed to confirm a break below, could be a decent little opportunity for some sort of retracement, especially if Trump does decide to have a bit of a Friday frenzy, and these lows could well be a good opportunity to have got in. And I guess the, the main target area then, or an opportunity to look to get short, could for silver be that low of the 16th you see just before what would be the pivot today. So that reaction last night and then overnight today, a couple of tests to try get below that 1st of October low, and it just couldn't. Obviously not out the woods yet. A key level just above to, to, to get through, which would be around that pivot point. Gold similar, gold similar here, but we did have a more of a breakthrough only to snap back, came back, and that false break was, I mean, really good opportunity, you have to say, to, to get in there. Uh, and see, that's now a fair bit above. And, and having a look at gold yesterday, I mean, what a move. It has to be said, in, in the, uh, in the afternoon, just came all the way down. And it's been on a bit of a journey this week, as Ant was saying. But yeah, after breaking that low, that 1482, which is just such a key point, isn't it, having a look back at this whole, uh, sort of last 30-odd days, and a break below there. And really, the next level it was gonna go to, whether it was gonna do it as quick as that, uh, people I guess were unsure. But the next level it was gonna go to, that 1st of October low, like With silver, the failure to break down has seen a decent recovery. How long that will last, I think, will be, will be, well, I guess potentially decided with a Trump tweet or not. But S&P here, still gotta say, nicely up. I mean, look at that, 240 since the beginning of October there on the 3rd. It's just been one-way traffic really with We've hardly any down days, and if there has been, they've been very small. Um, probably worth looking to maybe not just yet, but in, in time, see if we can get any of these kind of trend lines on, or are we going to get maybe a new trend channel, uh, appearing. You can see it's just starting just to grind its way higher, so maybe potentially a, a break of that to the downside could be an opportunity to come. But at the moment, uh, it still seems there's, there's life left in it. But I think, uh, could well be something to, to keep an eye on later on today, obviously, is where we close and, and does Trump come out and say anything. Also, just having a look through here, you can see relatively well respected this sort of break of the trend that we had yesterday morning, and we've come back to find some good support on there. So from an intraday point of view, 3077, a pretty important level because it's also the highest from, uh, what day would that be, Wednesday evening Wednesday afternoon and Tuesday evening. So pretty key point, good line in the sand as you could want for now, around 30.77. The pound yesterday came under pressure after the 7-2, I think a bit of an overreaction to be honest. But, um, if we have a look where I would be happy to, to maybe be a buyer, I think it has to get back above 128.50. Will we look back in there and see a similar you know, move to potentially what could happen in gold and silver off these lows of the 24, failure to get back above there maybe. But of course polls are really going to drive this. But from an intraday perspective, that 128.50, a pretty important level. If we were to get above there, there's still obviously a fair few points for it to go on and down, up to, to get towards. I do like the idea of a short R1 today. However, that would be a big, big move for us to get there. So a couple of resistance points I'd be keeping an eye on beforehand as well. Certainly having a look at the longer-term picture here, I'm just going to put this on the 240. You can see the importance of that low from yesterday. So again, where we close the week will be pretty imperative. If we can get below that 128, then why can't we drift down, perhaps down to 127 in, in quick fashion, uh, has certainly been on a bit of a downward, uh, trend. So again, worth getting those trends on from the top. Look how well respected that is, and it's almost like decision time to come for the pound. Whether that can happen today or not, I'm not too sure, but from a technical point of view, that's how I'd be looking to play this, almost waiting medium term for, for that move to happen. Euro, um, a nice little break yesterday. This is again still the 240 You can see we broke through, came back, you know, a couple of opportunities to have got in there. Whether you would have got stopped or not, it's hard to say, but a decent move lower. Putting it onto the 60-minute, you can see it's just waving down now. And as we put those pivots on just to give us the sense of direction, we've just touched now what was yesterday early morning's lows. And that's, uh, you know, found a bit of resistance there. I don't, um, you know, see that getting broken through in the, you the early morning trade just yet. Also got the pivot, of course, just a bit above there, but relatively small range. A couple of short euros trades the last couple of days have taken a while to come in. The R1 yesterday was a decent opportunity, it seems, but then it was hanging around there for a long period and it would have been offside for a while. But yeah, euro, keeping an eye on that low and certainly similar with the pound. If we can confirm a break below, uh, the— I would say the low of the 16th, which we tried to yesterday— if we get below there this week confirmed, then obviously that next level down to 1.1037 could come quite quick as well. The double top, if you want to call it that, seems, uh, quite, uh, some way away now from where we were trading just on the 31st, just on Halloween last Thursday at 1.12. Quick look over at oil. As, as I was saying, uh, just drifting lower and I just couldn't, just could not get back above those, uh, those highs. In fact, 1, 2, 3, 4 highs in a row, but we just cannot confirm a break above. And we're now back down trading 56.55. And again, call it a little mini range if you like on, on, uh, on oil. Where we close the week will be key. If it's in there, I'm not too interested. Uh, but if we can get below 56, I think we can drift back lower. Whereas if we were to have a decent day and get and close, which we can't do at the moment, above, uh, 58, then I think this market could go higher. But for now, seems to be the way that it's just every push-up is met with the sellers coming back in. So until they give way, um, I think a good opportunity would only come just— there's a lot medium term-wise. Similar with that, that pound idea, just waiting for those breaks either way. DAX relatively quiet, uh, this morning on, on that open, and I think that's potentially the, the theme for the morning. So I'm going to look at that calendar one more time. You can see quiet, quiet until you've got Canadian numbers at 1:30, which is always a volatile release and one to keep an eye on. 3 o'clock, the, the Michigan sentiment, but small range, and again, probably wouldn't be expecting too much from that. The only speaker of note is coming at 4:45, so probably a day to be patient. And if the markets are going to move violently or in big momentum, you're looking probably for Donald Trump to do something or there to be some sort of development in the election, but that's not really going to happen for, for some time. So I wouldn't be looking to go all crazy crazy today. I'm not convinced this can be a big move, but I hope everyone has a good trading day, even better weekend, and fingers crossed for Leicester City that they beat Arsenal so we can get rid of Unai Emery. Hope you'll have a great weekend, and I'll catch you Monday.