 Good morning and welcome to CMC markets on Thursday the 15th of March time is just gone at 9 o'clock and this quick preview of the Week beginning of the 19th of March in front and center I think next week is going to be the latest Fed meeting as well as the Bank of England rate meeting I think they are going to be the dominant themes Against the backdrop of equity markets that remains very uncertain and with respect to the tariff story An awful lot of upheaval in the Trump administration the departure of Gary Cohn Chief Economic Advisor to President Trump as well as the departure of Rex Tillerson Secretary of State to be replaced by Mike Pompeo now Mr. Trump does appear to have replaced Mr. Cohn with Larry Kudlow CMBC Commentator That's what he's best known for but I think if you dig back a little bit further into the not too distant past 1980s you'll find that he was an economic advisor to President Reagan So he does have an economics background and maybe just maybe he will temper some of the worst instincts of the US President that has been talked that he could be looking to implement a wider range of tariffs against China The number of 60 billion dollars has been mooted and that is that is weighing on risk appetite to a certain extent now The narrative of this story could well change between now and the weekend and now and Monday, so Obviously when I'm recording this video That really needs to be taken into account that being said We have seen a little bit of a pullback from the recent highs in the S&P 500 We only just about managed to push Beyond those post bounced February highs around about 2800 I think that's going to remain a key level But what's also I think particularly interesting is some of the economic data That's coming out of the US because if you if you believe the story that we're going to get three to four rate rises this year Then the payrolls data would appear to suggest that's a realistic option But some of the more consumer led data would suggest that maybe that's slightly optimistic and that is being reflected in US Bond markets yields have slipped back from those highs that we saw earlier this year of 2.95 percent briefly touching 2.8 Retail sales have been disappointing headline CPI Has been disappointing wages have slipped back. So that really doesn't feed into a narrative The rates are going to go up much more than two or three times this year So I think the weakness of that soft data Is likely to weigh on the dollar going forward and not to mention obviously further concerns about a trade war But again, that is a developing story will Larry Kudlow rain the president back Mr. Kudlow's instincts are very much strong dollar and anti tariff though It has to be mentioned that in the Reagan era there were some targeted tariffs So maybe you know we could get some development on that particular narrative But ultimately the focus on the coming week is likely to be on the Federal Reserve What sort of decision are they going to make going forward with respect to the dot plots? We're going to get a rate rise I think that's pretty much nailed on. I don't think any of the data that we've seen over the course of the past week Really reflects a change in that particular narrative the narrative is going to be around How does the Fed see the US economy going forward? How does it see what's going on with respect to political? shenanigans in Washington DC and is that going to temper their expectations for their outlook for the US economy and the global economy in general Moving on we've also got the Bank of England rate meeting once again not expecting any change to policy there Though the markets are starting to log a potential rise in interest rates at the main meeting So I think the narrative coming out of the Bank of England is likely to be very important in the context of the data How policy makers see the UK economy against the Brexit backdrop? So if we can look at that in the context of the pound against the dollar we can see a quite Decent evidence of a little bit of a range compression going on with respect to the pound It is a pretty similar story in euro dollar as well What we've got here is decent area of resistance around about 140 we can see these three successive peaks here We've got a couple of doges over the past two days Which does suggest that the market is very undecided about where it's going to go to next Overall, I think on the downside as long as we stay above 137 10 Then I think the prospect is that the pound should remain fairly well supported Certainly, I think in the context of euro sterling. I think there's more downside pressure than there is upside risk prevalent in that particular cross A couple of other items I'm keeping an eye out for in the coming week is the France and Germany flash PMIs they're out on the 21st of March and I think they're going to be particularly interesting in the context of Some of the slight softening that we've seen in the survey data particularly in the context of The February numbers these March numbers these flash PMI numbers could give an indication as to whether or not the softness that We've seen coming off the peaks in December or continue to start to trickle down over the course of the next few months And that could have significant repercussions for ECB monetary policy where inflation Still continues to show a significant degree of softness, and I think that's what is tempering I think the upside in euro dollar One other item that is going to be of particular interest We have a raft of earnings announcements FedEx is Q3 results always a good bell weather of the US economy in Terms of how many deliveries they make but we also got an IPO the IPO on the 22nd of March is Dropbox And that should be fairly interesting I will be writing a little bit of narrative on that which you can find on the website But overall what is Dropbox is a secure file-sharing cloud computing solution And it's valuing the company at around about seven billion dollars. Is that too high is that too low? We looked at snap a year ago, and that was valued at 20 billion dollars Which is way too high. It was an absurd valuation and I still stand by that I think that it could well be too expensive and let's not forget the Dropbox is Main competition in the cloud computing arena apple and Microsoft So it is very much a one-trick pony when it comes to the actual market that it actually operates in So keep an eye out for Dropbox on Thursday. That could be quite an interesting little Little little company to see some movement in so that's it for this week Don't forget to tune in to my colleague David's webinar on Monday 12 15 Otherwise have a great weekend and see you all next week. It's Mike Houston talking to you from CMC markets