 Hello and welcome to CMC Marcus in this quick look at the week ahead beginning the 7th of August and Once again, it's a familiar theme. We're seeing new record highs in US markets I think that's largely as a result of the effects of the weaker dollar There's still dysfunction in Washington DC as Donald Trump Lurches from one crisis to another The decision of the reports of a grand jury by special counsel Robert Mueller I have basically put additional pressure on the beleaguered president and they placed further downward pressure on the US dollar That in turn has pushed further upward pressure on the euro and we're seeing that played out quite nicely in this chart here. This is an overlay of the German DAX or the Germany 30 and Euro dollar and you can see that Potentially for the third successive week in succession We've seen a decline in European markets And we've now completely wiped out the Macron bounce that we saw in April and what's causing that well It's certainly not the data. The data continues to be fairly positive for Europe And yet the German DAX and the catcaron continue to fall and the reason for that I think can be stemmed from this additional leg higher here on this euro dollar chart because what we're seeing here is a more expensive euro and The perception is ultimately That that will weigh on the profitability of those German companies who export an awful lot outside at the euro zone So we're seeing we're seeing we're seeing the euro head towards 120. We're seeing the dollar index Post nearly its lowest levels in just under a year and The direction of travel does appear to suggest that we're probably going to see Further gains in the euro and the reason I say that is because of this chart that I've got Here right now. This is a daily chart. Don't worry too much about that Let's look a little bit cluttered But if we look at it on a weekly basis, we can see That we're probably going to be closing above 200 week moving average on euro dollar for the first time since mid 2014 that's a significant break higher which if sustained could well propel us back to levels that we last saw at the end of 2014 which is around about 125. That's a big jump now We're not going to see that overnight obviously, but I think in terms of where the key support levels are We're all the way back now at 116 20 so I'll certainly be looking for Further evidence of gains in euro dollar. So on a technical basis. We need to stay above 116 20 and And in that context, I'll be keeping a very close eye out on some of the key US data that's out later this week And mainly it's inflation data that will be all inflation data CPI data that I will have my eyes on At the moment, we don't know that I don't know the results of what the non-farm payrolls numbers were or I don't think they're Going to add too much to the overall debate as to whether or not the Fed will tighten further this year I still maintain the likelihood of any further fed tightening this year remains unlikely The focus is very much on balance sheet reduction and ultimately I think the focus will continue to be on the ECB the economic data within Europe and speculation as to when the ECB could well taper its current stimulus program The other key factors that I'm keeping an eye out for later this week is an OPEC meeting And given the rise that we've seen in the oil price over the course of the past few days I think there's potential that we could be starting to see some form of rebalancing in the oil market We've seen five successive weeks of US inventories in deficit to the tune of around about three to four million barrels Having said that this last week's inventory was slightly lower than expected at around about two and a half million So the draw and we are bumping against significant resistance level here on this Brent chart at around about $53 and a half dollars a barrel. We are more importantly above the 200-day moving average But as we can see from previous instances of that just because we've broken above it doesn't suggest that we're going to stay above it The key resistance line I'm looking for on Brent is this resistance level from the February highs That comes in just below fifty five dollars a barrel But at the moment we're finding a little bit of resistance three successive peaks at around about 53 and a half dollars a barrel The oscillator is starting to look a little bit over ball could be starting to roll over So I'll be very much keeping an eye on that. What else the other factor that's likely to play into The oil price is obviously the weaker dollar and that could well put upward pressure on oil prices But there's an OPEC meeting this week between OPEC and non-OPEC members And it's to do with compliance or non-compliance of some of the production caps that have been put in place By that OPEC agreement And I think there'll be some pressure brought to bear to those countries who aren't complying with the output cap I think it would be helpful if Nigeria and Libya were brought within the output cap But that's I think another discussion entirely also out later this week We've got China trade data and I'll be particularly interested in the export data there is the global economy starting to slow down If it is and we've hit peak global economy Then that should be reflected in the Chinese export data More importantly is the Chinese economy starting to improve on an internal basis So also be looking at the imports data to see whether or not The improvement in imports that we've seen over the course of the past few weeks or weeks and months rather has been sustained Other other factors I'm keeping an eye out for this week is US CPI Inflations continues to lag behind expectations in the US I don't think this week's CPI numbers are likely to be any different We're certainly looking Around about a number in in the region of 1.7% In that regard it's also been a difficult week for sterling And I know there's those there are those of you out there Who are wondering after last week's rather dovish interpretation of the Bank of England Meeting as to whether or not the uptrend that we've seen in the pound is over certainly against the dollar I don't think the uptrend is over We've certainly got a long way to go Before we see any evidence that this uptrend has really been in place since January February March is showing any signs of turning round We have seen a key reversal day here that could prompt a little bit of a pullback Towards the 130 level and even potentially lower than that towards this trend line support here But ultimately I still maintain a fairly bullish stance Against the dollar not so much against the euro We've seen a significant break higher there, but we still remain below The highs that we saw In the middle of last year or just just after the referendum vote at 93 We're finding a little bit of resistance around about 90 and a half If we can break through 90 and a half then we could retest those Those highs that we saw in september october Um earnings announcements that i'm keeping an eye out for later this week snap in particular Will the snap pop that we saw We will will the snap push higher that we saw post ipo Which is now turning into a little bit of a dive continue its downward trajectory I'm posting a little update on snap on the news and analysis website and you can read it at your leisure there, but Um in a in a sound bite. I'm not over optimistic about Snaps future profitability Um of likelihood of making profits in the future. So that's it for this week. Thanks very much for listening Michael Houston talking to you from cmc markets