 Hello and welcome to CMC markets on Thursday the 3rd of May and this quick look at the week beginning the 7th of May and it's only been an interesting week for equity markets as I speak We still have the US payrolls report to get past European markets look set to close high after the 6th week in a row the DAX has broken above back above its 200 day moving average at 250 more importantly, however That's it that there appears to be significant divergence on the part of US markets Where we're actually seeing the the S&P 500 Looking to test and potentially break its 200 day moving average now Obviously between the time that I'm recording this and the time you guys get to see this video We could well have broken below that 200 day moving average on the S&P 500 Nonetheless, I think the key level to keep an eye out for really is the April lows those twin lows around about 25 75 2580 but certainly I think it closed below The 200 day moving average could well be significant in the overall scheme of things when it comes to potentially the future direction of US markets because I think an awful lot of the declines on the part of US stocks is really what the US dollar is country is currently doing The rate expectations the potential for further rate rises going forward and this week's Fed minutes Fed minutes or even Fed meeting rather this week's Fed meeting Does appear to suggest that ultimately Fed officials do appear to be going slightly softer on the growth front While slightly more hawkish on the inflation front now at the moment the dollar is on a bit of a charge It's hit its highest levels against the euro and around about three to four months and Ultimately, I think there's a good chance. We could well go higher We've seen significant breakouts against the euro below 121 50 more importantly as we can see from this chart in front of us Also against the pound breaking below that 137 10 level that I did that I have identified on Previous videos, and I think that's why this week's key events are very very important we have the Bank of England rate meeting and quarterly inflation report now if we cast our minds back Nearly three months now to the February Inflation report what struck me about that report was I think how hawkish it appeared to be in terms of a Rate rise was likely to come sooner than markets had anticipated nothing That was clearly the case that markets were working That was the base case scenario that markets were working from Until that intervention by Bank of England governor Mark Carney at the IMF meeting less than two weeks ago Where he wrote back? Significantly on the rhetoric that we could expect a rate rise in the coming weeks and months He was slightly softer on that as a result. We've seen the pound drop quite sharply We can see it clearly here on this chart here where we've drifted back from 143 50 And in that time we've only really posted two positive days and even those Are pretty pathetic there's this one here and at the moment as we speak we're just about in positive territory for the day That could well change what is significant However, is we are currently still above 200 day moving average around about 135 20 And I think that for me is the key support area now that could come under pressure in the wake of the US payrolls report Which is due out in around about 24 hours time If that's a good number we could we'll see further dollar gains and Further sterling weakness and further euro weakness, but ultimately I think it's the Bank of England decision Next week. There's going to be the key focus on Thursday The expectation now is for rates to remain unchanged and ultimately I think it's going to be really about All sort of picture Bank of England officials paint with respect to the UK economy Are they down big do they downgrade their growth forecasts for this year as a result of the poor numbers that we saw in the first quarter? And if not, why not and do they downgrade their inflation forecasts on the back of that? And what's their outlook for wages because we've heard an awful lot of Chatter in recent weeks from Bank of England officials about the fact that wage growth is heading back to the 3% level So what challenges does a weaker growth outlook do or give to the Bank of England with respect to a move higher in wages going forward so That's really I think the key item that I've got my eye out for on what is going to be a holiday shortened week It's a bank holiday weekend. So ultimately the 7th of May There's not really going to be that much to talk about the 7th other items to keep an eye out for this week Are the latest China trade numbers? They're going to be particularly interesting because we've seen some big surprises in some of those recent China trade numbers the March numbers were a big surprise China posted its first deficit with the US and over a year exports fell back sharply Which was a big variance from the big rise that we saw in February now as Chinese new year has no doubt Skewed these numbers is it normal service being resumed in April those are out on the 8th of May We also have a number of important earnings announcements Disney's Q2 numbers 21st Century Fox Q3 numbers. They're going to be particularly interesting in the context of the sky Story and the Comcast bid for sky will 21st Century Fox make an increased bid For sky will Disney be forced to actually up their bid for 21st Century Fox and obviously The 39% stake in sky that they already own so number of key factors to keep an eye out for In this particular week as usual any questions, please feel free to drop them my way on my colleague David Otherwise have a great weekend and we will all speak to you next week. Cheers