 Hello and welcome to CMC Markets on Friday the 13th of April and this quick preview of the week beginning 16th of April and there's a number of key items that I'm paying particular attention to this week namely the latest UK economic data inflation as well as wages and also the latest China's China first quarter GDP retail sales and industrial production but before I start to look at that let's look at the price action in terms of equity markets over the course of the past few days. Certainly European markets are looking to post their third successive weekly rise despite all the volatility, despite all the concerns about trade, despite all the concerns about a military conflagration. In the Middle East equity markets despite the volatility do appear to be finding some form of a base around or just above their recent lows and I think what was significant or what has been significant over the past few days has been the ability of the US markets in particular to hold above their 200 day moving average and really I think that for me was the you know sort of the line of last result if you like I think if US markets had given up this key support area and taken out their February lows then I think the prognosis for European markets more broadly would also have been similarly negative but what we've seen over the course of the past few days is the S&P 500 starting to build up progressively higher lows and that appears to be the case in this four hour chart here what remains to be seen is to whether or not we can actually get back above these peaks here which is just above 2680 2700 and really retest the 2700 level on a breakthrough 2685 we're not far away from that at the moment as we speak and US bank earnings may be the catalyst that really pushes them higher so JP Morgan and JP Morgan and Citigroup later today on Friday could well be the catalyst that helps push US markets up as we head into the third week of April okay so I mean that's that's I think that's a nice little preview in terms of what equity markets are doing certainly I think if we look at the DAX again we've got significant resistance up around about 12,450 so we'll certainly be keeping an eye on that over the course of the next few days and in particular I think this this series of highs in the middle of February if we're able to consolidate and move through this 12,450 area which we're currently flirting with at this moment in time but looking slightly further ahead now and looking ahead to next week and the economic calendar and I think the main focus that I have is obviously going to be the pound against the dollar given that the pound has managed to break above 142 and a half at the moment as I'm talking to you the 200 week moving average is there or thereabouts if we're able to sustain a move above this 200 week moving average that could be significantly positive for Sterling as we head in to next week and in particular the economic data that we've got coming out on Tuesday and Wednesday now for some inexplicable reason according to my economic calendar the unemployment and wages data is out on Tuesday and the inflation data is out on Wednesday so I don't know why the Office of National Statistics have decided to reverse the release times for those particular data points but ultimately whether they're released on Tuesday or Wednesday I think it's the integrity of the data more than anything else that I'll be looking at and whether or not we get a significant increase in wages the numbers that we saw last month were 2.8 percent for average earnings net figure excluding bonus 2.6 percent now expectations are we don't have them here but I can tell you what they are we're expecting broader wages to rise by 2.9 percent including bonuses and you can see from here the trend in terms of these numbers is higher excluding bonuses you can actually see a very nice staircase effect going on here and this number here is expected to come in at 2.8 percent unemployment rate is expected to remain same at 4.3 more importantly what we want to see and we could see is that this number here if this comes in at 2.8 percent and the CPI number remains the same at 2.7 percent we could see that actually wages are increasing above the rate of CPI for the first time in quite a long time certainly if we're looking at the trend here with respect to CPI at the moment it is flatlining a little bit peaking at 3 percent earlier this year and it's ultimately expected to remain unchanged at 2.7 percent when the numbers are released on Wednesday for those of you who probably pay more attention to the RPI because I think it's a much broader and a much more accurate a reflection of inflation trends that is expected to decline a little bit from the 3.6 percent that we saw last month coming at 3.5 percent we've also got the latest consumer price index for the EU as well and as we can see and as we can see from here EU inflation is much much lower and however it is expected to rise ever so slightly from 1.1 percent to 1.4 percent so at the moment inflation in the UK and in the EU appears to be going in different directions inflation coming down in the UK CPI heading up in the European Union so those are the numbers we're expecting for obviously any disappointment on the wages numbers in the UK is likely to undermine the pound a little bit but certainly in the context of pound against the dollar here let's have a look at this chart and we can get a clear indication of how important the current levels that we're seeing at the moment are we can see it from this trend line resistance here from the peaks that we saw back in 2015 if I show you on the weekly chart that bears it out quite nicely let me just give you slightly more detail to look at and zoom it zoom it out and in a little bit so we can see that from here it's trend line from the 2015 peaks also the 200 week moving average let's really look at in here so where we close at the end of today is going to be very very key in the overall context of a potential break higher towards this series of peaks around about 145 in May 2016 what is quite significant though is we have seen a break lower in euro sterling and we've broken below or flirting with the 86 40 50 area which is quite significant in the context of this particular low here back in June 2017 so if we break below these flows here then the 2017 lows at 83 are an exponential target so the direction of travel for euro sterling does appear to be for a stronger pound and a weaker euro first call to China GDP expecting to see a number around about 6.8 percent now that could actually come in short because the trade numbers that we saw coming out for March showed that trading activity exports declined quite sharply from the big jump that we saw in February also what we've seen is that retail sales and industrial production have been a little bit flaky in the first quarter Chinese policymakers have set a target six and a half percent annualized GDP for 2018 so I think that's imminently achievable they've obviously low-balled their estimates for GDP growth but we've also got retail sales and industrial production and they are due out on the 18th of April we've also got the Bank of Canada rate decision coming on the back coming off the back of a Fed rate rise in March I think it's unlikely the Bank of Canada will move given continued uncertainties over NAFTA even though President Trump has suggested that a deal is close really I don't think you can really assume anything until the actual ink is dry on the paper and also next week we've got Goldman Sachs and Morgan Stanley first quarter earnings hopefully they will come in on par with the JP Morgan and Citigroup earnings hopefully they'll be an improvement because of the US tax cuts the volatility also in financial markets should give them some decent trading opportunities to generate income and revenues the only downside will be the flattening of the yield curve which could actually shrink their profitability in terms of their bond trading division so that's it for this week thanks very much for listening to Michael Houston talking to you from CMC Markets