 Hello and welcome to CMC Markets on Tuesday the 19th of August in the weekly market update and we're seeing a significant rally in equity markets despite the fact that the situation in Ukraine continues to remain fairly fluid. I think that's probably an accurate reflection of the situation there. But generally equity markets are shrugging off concerns about an escalation. We're seeing a significant rebound in the DAX. You may recall last week I talked about the 8,900 level as being a key level and we can certainly see that on this chart in front of you here. It's a daily candle chart. We've broken above a resistance level at 9,260 and the likelihood is given the way that that market has rebounded back is that we could well see a retest of the 200 day moving average and the trend line resistance from the highs in July which currently comes in round about 9,500. Now that sort of begs the question that why are we seeing such a significant rebound in equity markets despite the fact that the economic data that we saw last year was by and large pretty rubbish. We're looking at German GDP. We saw a contraction of 0.2%. Italian GDP. We saw a contraction of 0.2%. French GDP came out flat. Inflation remains very, very weak. I think what investors are doing is they're making an expectation or they're making a call on the likelihood or otherwise that the ECB will do more to try and stimulate demand and stimulate growth in the European economy. Now let's put aside for one moment concerns about the legality of QE. It seems to me that markets, equity markets, equity market investors are banking on the fact that pressure will be brought to bear on ECB officials to relax their opposition to foreblown QE and all I will say to that is don't hold your breath. Having said that, we are seeing the euro start to slip back and this can be reflected and I'm going to revisit this from the chart that I showed you last week because the chart I showed you last week did show some evidence that we might see a bit of a rebound in euro dollar and we did see a little bit of a rebound back to 134.30 but it was very short lived and what we've done today is we've actually broken out of a very small triangular consolidation and that can be reflected in this daily chart that I'm putting up in front of you right now. So we've got the daily chart in front of you. You've got the solid support around about 133.30. We've seen the euro break below that key level and now what we need to do is project a potential target for that down move. Now we can do that on the four hour chart, fairly straightforward. We move quickly on to that and we measure the distance between the base of that triangle and the breakout point and you can see the target on the breakout point it's around about 132.20, 132.25. A word of warning however yes we've broken below the recent lows around about 133.30 but to be really confident that we're going to push lower I'd really like us to see us break below the November 2013 lows 133. If we can do that then I think the likelihood is we could see a gradual slow decline in the euro dollar towards 132. Now later this week we've got the latest French and German manufacturing and services PMI data and the likelihood is that is expected to point to continued weakness in Q3 for the European economy and that's going to place a great deal of focus on Mario Draghi at this week's Jackson Hole symposium. Mr Draghi is due to give a speech Friday evening UK time and markets I think will be looking for potentially further clues about whether or not the ECB is going to consider additional stimulus measures in addition to obviously the TLTROs that are due to start next month. Let's go and revisit the pound and last week I looked at the pound and suggested that we might find a little bit of support around about 167, 166, 55 which is roughly where the 200 day moving average is currently sitting and we did get a small rebound however this morning's inflation data has pretty much taken any prospect of a rate hike this year off the table even if last week's inflation report hadn't already done so. Now Mark Carney the Bank of England governor had sort of caught the market a little bit unawares at the weekend when he suggested that he might not wait for wage growth to wage growth to turn around and go positive before considering interest rates. Ultimately that caught the market a little bit unawares and we tried to push higher. We weren't able to take out 167, 60 and if we're able to sustain the close or the push below 166, 55 and the 200 day moving average then there's a good chance we could well push further lower towards 165. Now we do have the latest Bank of England minutes due out later this week and there has been some speculation that we might see some descent from those minutes. That could still happen but these minutes are now very dated because they don't take into account the very dovish inflation report and they don't take into account obviously the weak inflation numbers. So given those two factors I would be very surprised if we saw any descent tomorrow given the dovish inflation report last week. So the downside risk now remains a real concern for the pound against the dollar and we could see we could well see further losses towards 165 if we sustain this move below the 200 day moving average. So that concludes this week's weekly market update. Once again thanks very much for listening. This is Michael Houston talking to you from CMC Marcus.