 Hello and welcome to CMC Markets on Thursday the 28th of September and this quick preview of the week beginning 2nd of October, and it's certainly been an interesting week politically German politics in particular have taken center stage. We've also got Donald Trump's latest tax plans for the US economy. Will they happen? Won't they happen? I think at the moment the jury is out, but there is an awful lot of positivity surrounding that we've come to the end of the month the end of the week and the end of the quarter and by and large It's been a fairly positive outlook for European and US equities. The only downside has been the poor performance of the FTSE 100 and I think that's largely been down to the fact that the pound has staged a significant recovery this year. It'll be the first time that we posted three positive quarters since late 2013 in the beginning in 2014 for the pound against the dollar and that has to a certain extent weighed on the FTSE 100 over the course of the last few weeks. But if you thought that we were at the end of political or geopolitics then you are mistaken because ultimately while we didn't get a significantly positive outcome from the German elections what we got was a significant amount of uncertainty and as a result of that I think it's unlikely that we're going to get any clarity on that much before the end of the year Angela Merkel still needs to come to some form of accommodation to try and form a new government and if that's not bad enough we've also got the uncertainty from the Catalonian referendum. Will it happen over the weekend? Will Spanish Prime Minister Mariano Rajoy succeed in subverting the attempts of the Catalan government to try and hold that referendum on Sunday and more importantly will it trigger further significant unrest within Spain and in essence I think starts to weigh on the euro. Now we've certainly seen some evidence of a breakdown in Euro-dollar. We've broken that potential triple top formation that we've been looking at for quite some time now whether you call it triple top or a head and shoulders really doesn't make that much difference. The measuring objective is the same when you measure it from the top of the head here or the peaks here around about 120 70 to the breakout levels that we saw around about 118 20 as well as the 50 day moving average you project that down on this particular chart here And you've got a minimum price objective over the course of the next few weeks around about 115 70 So this euro weakness, how is it going to manifest itself? What's going to be the key drivers? Surrounding it will certainly I think in terms of the economic outlook the inflation outlook is starting to look a little bit more positive for the Euro area and that's one area that I'll be looking at over the course of the next few days But more importantly, it's going to be a very very big week though this coming week of October for US economic data room specifically non-farm payrolls now tune in to the payrolls numbers I will be hosting a webinar on that with my colleague Colin Suzuki at 1 15 on the Friday So cover those numbers live and I think with respect to this US economic data that we're looking out for this week the ISM Manufacturing particularly the prices paid data the inflation data the average earnings data the wages data that we're going to be Keeping a particular eye out for we have to take into account a Significant skew on the data as a result of hurricane Harvey and hurricane Irma, and I think that could significantly impact the payrolls data that comes out for September We're targeting certainly looking at the estimates for non-farm payrolls for September with we're targeting a significant reduction From the fairly low 156,000 number that we saw in August numbers in the region were around about 70 or 75,000 for non-farm payrolls ADP a slightly better number as expected, but we saw a real big blowout number there In in in the August numbers of 237,000 I think that number is unlikely to come in anywhere near that number, and we're looking at a number of around about 160,000 also looking ahead for the RBA rate decision the Reserve Bank of Australia And I think given at the strength of the dollar at the moment that's made the RBA's Decision-making process that much easier the Aussie dollar has slipped back quite significantly over the course of The past few trading sessions and as a result that weaker Aussie I think will make it much much easier for the RBA in terms of keeping rates on hold the big level to keep an eye out Here for I think the Aussie dollar is around about this 7770 area and this series of lows through here just below 78 7720 if we do go much below that we're still looking at the 200-day moving average, so I think I Think the key factor to take away from the RBA is how how dovish or how hawkish they are the data has been fairly positive Going forward, but I don't think they're going to want to be in any rush to start to think about pushing rates higher On the basis that they don't really want a stronger currency other factors to keep an eye out for this week Are the latest manufacturing and services PMIs? from pretty much across the globe Japan China Europe the UK and the US and they should give us a decent indication of How robust the current recovery and economic data has been since the middle of the summer But I think the keynote event for this week is any negative reactions from the Catalonian referendum on the Sunday US non-farm payrolls on On on the Friday and obviously the broader economic outlook For the global economy in respect of the global PMIs. That's it for this week Thank you very much for listening to this Michael Houston talking to you from CMC markets