 Hello and welcome to CMC Markets and this quick look at the week ahead beginning the 26th of June And most of the event risk for this week comes at the back end of the week We've got a number of important data releases out including final iterations of first quarter GDP out of the UK and the US you may recall that UK first quarter GDP was a little bit disappointing because it was downgraded from 0.3 to 0.2 percent It would be surprising if we saw a significant move on those numbers I think what's probably going to be more interesting is the readings that we get for inflation EU inflation and US PCE inflation Given the fact that some of this at some of the inflationary pressure that we've seen coming out of Europe and the US does appear To be moderating and yet US officials Fed officials still seem Pretty much intent on raising rates at least once more this year and potentially Potentially more than that, but I think there is a concern that maybe the Federal Reserve is probably ahead of the curve and not behind the curve because When you look at what oil prices are doing Have been doing they're 20 percent down from their peaks this year And I think there is a concern that they may they could well Go quite a bit lower, particularly if that key support around about the 40 dollar a barrel Level gives way and I'll come on to OPEC and oil prices Later in the video, but I think in terms of the UK I think the pound is going to be sent to stage at the back end of the week not only do we have a final iteration of first quarter GDP We also have the final vote on the Queen's speech and the significant potential there That are failure for the Conservatives to push that speech through the parliament could prompt Another general election because ultimately I think a failure to actually get that speech through would potentially prompt a little bit of what I would call a constitutional crisis and Make Theresa May's position As UK prime minister running a minority government very very difficult indeed Let's look at the mathematics of this There's there's 318 conservative party MPs the majority needed to pass the Queen's speech in theory Is 326 however 18 MPs In the House of Commons come from northern Irish constituencies Seven of which in fame don't take up their seats. So they don't get counted in the final tally One Irish independent and 10 democratic unionists now the conservative party has 318 seats if you combine the numbers For the Labour Party they have 262 you've got the s&p with 35 you've got the liberal democrats with 10 And then you've got five other MPs on top of that that brings a total of 314 so If you exclude symphane Who won't don't take up their seats and you exclude the dup who will not vote for a Labour government Given their antipathy towards Jeremy Corbyn ultimately All the conservatives need to do is to get all their MPs to vote for the Queen's speech And it will go through And that for me I think is the key the key element to this particular story because if you look at way the way the pound's been behaving over the course of the past week or so There's been mixed signals shall we say coming out from the Bank of England monetary policy committee Last week we saw that the Bank of England monetary policy committee was split On whether or not to keep interest rates on hold three policy makers voted for a rate rise One of those is actually leaving the MPC at the end of this month to be replaced by A another probably more dovish monetary policy committee member However chief economist Andrew Holding Put a little bit of the cat amongst the pigeons In comments this week when he stated that he came very close to raising rates as well And that stance is diametrically opposite to what Mark Carney was saying about the possibility that a rate rise Remains at some why off so Far from actually there being a significant majority to keep Interest rates on hold maybe the MPC is more split than maybe We think that it is because Andrew Holding if you recall One of the key policy makers who suggested a sledgehammer was needed to Mitigate some of the more nasty effects of the Brexit vote At the end of last year despite the fact that I was very skeptical as to whether or not a rate cut was actually needed Now he's talking or articulating That there could be a possibility that some of that stimulus could be reversed and interest rates could be Pushed back up to 0.5 percent all the while leaving the current stimulus program the QE The extra QE In place and that has helped I think underpin the pound in the short to medium term It's still above the 200 day moving average which current comes in around about 125 60 so I think while we're above 125 60 Then I think the prospects of down further downside in the pound is likely to remain limited But we really do need to get back above 127 50 127 60 to stabilize When we do run the risk of further downside pressure, so keep an eye on the pound For the week beginning the 26th of June because I think the failure to get the queen's speech through the House of Commons Could well prompt further sterling weakness Though I have to say I would be surprised if that does happen Also have a quick look at Brent crude prices in the context of the declines that we've seen over the past few days And really the big big level on Brent crude for me at the moment on this contract here Is the November lows that we've got around about 43 dollars a barrel if we break through that Then we could well see further losses towards the lows that we saw in august now wti uswti Has actually broken below those November lows and has traded back towards levels Near to august so wti does appear to be leading this move lower Largely on the basis of rising rig counts in the u.s And they come out on a friday late on friday. So certainly we'll be keeping an eye eye out for them, but Be very aware that we could see a little bit of a rebound in oil prices, but unless opec Gives any indication whatsoever that they're going to cut production further than ultimately I think the line of least resistance for crude oil prices in the short to medium term Is towards the downside So key events this week queen speech Votes on the queen speech which are likely to happen on wednesday and thursday We've got us and uk q1 gdp on thursday and friday, and we've got e ucpi and us core pce on friday as well key inflation data. So that's it for this week Thanks very much for listening to spike abuse and talking to you from cmc markets