 Hello and welcome to CMC Markets on Friday the 8th of September and this quick preview of the week ahead beginning the 11th of September Before we get on to that We've had an awful lot of data to digest and use to digest over the course of the past week or so Global equity markets have been by and large fairly mixed We've seen some decent gains in the DAX, but they haven't really been matched by Other European equity markets like the Euro stocks 50 and the cat Caron which makes me think that maybe the move higher in the DAX May not be sustained and ultimately I think the higher euro is going to act as a headwind for that along with a weaker dollar now We have seen Some significant further weakness in the US dollar and that can be borne out by a Significant chart point breakout on the dollar indexes can be seen by this Bloomberg chart that I have here in front of me right now Broken below the 200 week moving average for the first time since April 2014 We've also broken below these previous lows here more importantly We've also broken below some very very key levels in dollar terms Against a raft of other currencies as well notwithstanding the dollar CAD when the Bank of Canada Rather surprisingly raised interest rates for the second meeting in succession So we can look at the dollar CAD chart here and we can see the significant break lower But we've seen over the past two to three days, but more importantly We've also broken below this uptrend line that we've got that we drawn in here from the 2012 lows But we've also broken below the 200 week moving average as well So it's important to you know not underestimate the significance of the break lower that we've seen in the dollar index Given that Euro dollar as well has made new new significant highs and Looks as if the next level for the euro dollar is this 50% retracement level from the peaks that we saw in 2014 When we squeezed up to around 139 95 fallen as those 103 40 a 50% retracement of that is 121 67 121 70 so that I think is the next key level on Euro dollar and I think that's probably going to pose a significant barrier to further gains over the course of the next few days Even though we have traded just below that Earlier this morning around about 121 120 122 What else have we had to focus on this week? Well no more changes at the Federal Reserve Stanley Fisher vice chair of the Fed will be leaving the central bank in October significantly earlier than was then his term was due to end which was at June 2018 he cited personal reasons, but obviously when you price in that and the fact that Janet Yellen is probably not going to Remain chair at the beginning of next year That's two of the most senior board members of the Federal Reserve who will not be in situ in January 2018 Which makes US monetary policy in the direction thereof that much more uncertain? That's before you even start to price in the damage caused not only by Hurricane Harvey But also by Hurricane Irma, which is due to hit the eastern seaboard of the United States Sometime this weekend and is likely to probably be much more serious in terms of the damage caused than hurricane Harvey We have had a potential roadblock pushback the debt ceiling That's been pushed back to December by Donald Trump due to a deal that he's done with the Democrats But nonetheless, that's just a problem deferred It's not a problem avoided and as such it probably makes any potential rate rise this year for the US Very unlikely indeed and that's before you even factor in the economic damage from the various tropical storms and hurricanes With the potential for another hurricane In the Atlantic hurricane Jose following on closely behind Hurricane Irma, and if bad weather wasn't bad enough Even though North Korea problems have subsided somewhat We have the North Korea National Day on the 9th of September and it wouldn't be beyond the warehouse of surprise to See Kim Jong-un Probably conducts another weapons test to ratchet up the tension in that region as well So when you have to basically factor all of that stuff in You know doesn't leave much room for anything else But it's also a big week for UK data the pounds done fairly well as a result of the weakness of the dollar We've pushed back up to 130 140 But there still remains significant obstacles to further gains and a move back to 133, which has really been my long-term target Pretty much since April, but we have got some important economic data Which could help underpin that move higher and a lot of that is to do with the inflation data Which is due out on Tuesday. That's currently at 2.6 percent Now there is a school of thought that suggests that may well have peaked out Certainly, I think there is a hope that that will be the case, but certainly higher energy prices as a result of the Of the bad weather in the US is probably is not helping oil prices. They have aged higher rent prices Back above 54 and approaching 55 dollars a barrel So that's going to put up with pressure on fuel prices at the pump So we could see Inflation start to become a little more sticky as we head into the autumn months But at the moment it's a 2.6 percent Expecting that probably to rain around about the same or maybe come down a little bit, but more importantly, we've got wages data wages data Looks as if it could well have bottomed out and could be heading back up again And if that's the case if we could see average earnings come up from 2.1 Which for they were last month and head back towards 2.2 2.3 percent That's certainly I think going to be a sterling positive one other very key event this week is going to be the Bank of England Rate decision now we've already heard Michael Saunders Make his case external MPC member make his case for a rising interest rates And I've certainly given the direction to travel when it comes to monetary policy for banks like the European Central Bank We're talking about potentially tapering their asset purchase program the Bank of Canada who's hiked rates for the second time this year The Federal Reserve has already got three fed rate rises behind it And ultimately I think it's much harder to argue that the UK economy needs an emergency rate of 0.25 percent Irrespective of what do you think of the data? We're not at an emergency level We can afford to move that rate back up again. Nonetheless markets have no faith I think whatsoever in what the Bank of England policy makers say and in particular Mark Carney He can talk all he likes about the potential for raising rates or the markets are underestimating it Ultimately, we've heard that tune before we've heard that song before and ultimately we no longer believe it that being said I think the upside for the pound It's probably going to be limited to around about that 133 level looking for support around about 129 80 129 20 Some other key factors to keep an eye out for this week Chinese economic data industrial production and retail sales on the back of some Mixed trade data the exports data that we saw from china in august was a little bit disappointing particularly to the european union So does that suggest that maybe we're going to get a bit of a slowdown in the in the economy in the year you Will have to wait and see will the high euro start to cause a significant slowdown in terms of economic growth as we head in To the back end of 2017 We've also got for you Technotes out there the apple iphone 8 launch and i will be watching that very very closely indeed for further signs of innovation talk about The launch of two or three extra iphone 8 as well as apple tv and maybe a new apple watch So that's it for this week. So thanks very much for listening. This is michael houston talking to you from cmc markets