Good morning and welcome to episode 50 of ‘Talking Bull’.
In this video/podcast we cover the main headlines and what to expect from the day ahead. We take a technical look at key markets that are likely to be impacted by today’s events. Also, we participate in a ‘Gun to the head’ challenge where each of us calls a live trade. These will expire at 9pm tonight and we will keep track of the progress over time.
We hope you enjoy it!
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It was a tough day for us yesterday as all 3 of us were stopped out on our gun to head trades.
We have included an illustration based on a £1000 account. This will follow the combined return of our morning trades by risking 1% of the trading capital per trade. The 1% risk is a variable monetary amount and will rise and fall based on the success of the calls.
We are currently up 38.59% collectively since we began recording Talking Bull on the 30th October 2019 reaching a new high yesterday.
Tight ranges prevailed ahead of Thursday’s New York open with markets monitoring global risks trends and EUR/USD near 1.1100. The ECB made no changes to interest rates at the latest policy meeting with the refi rate held at 0.0%. There was no change in forward guidance with bond purchases continuing at the current rate of EUR20bn per month for as long as necessary with quantitative easing set to end shortly before the first interest rate increase.
Bank President Lagarde stated that inflation has stabilised at low levels and is expected to increase slightly over the medium term. Data also pointed to some stabilisation in growth and the fiscal stance will continue to provide some economic support. Risks remained skewed to the downside, but are less pronounced and trade uncertainty has been reduced.
Risk appetite remained fragile during Thursday with markets continuing to monitor coronavirus developments in China. The quarantining of Wuhan and other nearby cities was an unsettling influence as markets were wary over the economic impact.
Treasuries moved higher despite the firm labour-market data while global equities moved lower. The Japanese yen continued to attract defensive support with significant gains on the crosses and USD/JPY dipped to lows near 109.30.
The World Health Organisation again decided against calling a global emergency over the coronavirus outbreak and US equities recovered ground later in the New York session which pushed USD/JPY back to near 109.50.
Data – Day ahead
8.30am – German flash manufacturing and services PMI (January): manufacturing expected to rise from 43.7 to 44.0, with services predicted to fall from 52.9 to 52.5. Markets to watch: EUR crosses, German stocks
9am – eurozone flash manufacturing and services PMI (January): manufacturing expected to rise from 46.3 to 46.9, with services predicted to fall from 52.8 to 52.3. Markets to watch: EUR crosses, eurozone indices
9.30am – UK flash manufacturing and services PMI (January): manufacturing expected to rise from 47.5 to 48.4, with services predicted to fall from 50 to 49.5. Markets to watch: GBP crosses and UK indices
2.45pm – US flash manufacturing and services PMI (January): manufacturing expected to fall from 52.4 to 52, with services predicted to fall from 52.8 to 51.7. Markets to watch: USD crosses and US indices
Gun to head trade ideas – Results so far
Gun to head trade ideas – Today
Have a great weekend everyone.