 Welcome to CMC markets on Thursday the 14th of September and this quick preview of the week beginning the 18th of September We're coming off the back of fairly mixed week for equity markets We've seen breakouts in European markets the DAX specifically in the Euro stocks 50 We've also seen new record highs for the US benchmarks as well I think largely on the back of the fact that I think there's a widespread sigh of relief to the damage from Hurricane Irma Orson in any way near as bad as initial estimates suggested it might be That being said I think there is now a slight shifting of expectation that ultimately the damage caused by the Hurricanes will act as a Significant break on US economic growth and as such I think it puts on the backbone or a little bit the prospect of a US rate rise This year that being said the dollar has managed to rally quite significantly over the course of the past few days But I think that's largely predicated on a belief that we could finally be starting to get some form of clarity on tax reform However, I'm not holding my breath on this one But what has been I think a hallmark of the chain of the last week or so and change in the last week or so Is the fact that the FTSE 100 has significantly underperformed and that's largely been as a result of the fact that We've seen a little bit of the weakness in copper prices. We've seen some weak economic data out of China more importantly the pound has managed to Rebound quite significantly because of market perceptions of what the Bank of England might well do In the next six to twelve months It would seem to me that the market is now starting the price in the prospect that we might see a reversal of Last year's or a partial reversal of last year's stimulus that we saw in August 2016 a stimulus package But I argued at the time was unnecessary and prompted this week's CPI numbers To push back to a five-year high equalling the levels that we saw earlier this year of 2.9 percent More perversely, however, we've seen unemployment fall to a 42 year low So I think as we look ahead to next week I think the main event will be two more central bank meetings namely the Bank of Japan We're not expecting any change to policy there more importantly the Federal Reserve's latest meeting And I think that will be important in the context of whether or not the Fed still remains on track To formulate a plan for balance sheet reduction, but I think also we'll get some insight Into what the Federal Reserve perceives is the likely impact caused by Hurricane Harvey and Hurricane Irma and what effect that will have not only on their inflation forecasts But their GDP forecast as well as well as their dot plot That their dot plot predictions going forward what I think is become quite apparent in the past few days and weeks Is that the central bank is likely to have a much more dovish slant? Going forward, and I think that's really based on the fact that the people are likely to be an awfully lot more cautious About the economic growth that we're going to see between now and the end of the year as the US Economy recovers from the damage that these two big trends at the Atlantic hurricanes brought about so over the course of past few days We've seen dollar index rebound quite strongly from those lows at 91 Certainly in the context of this hammer here, which I'm highlighting on the chart We could well see further gains in the short to medium term if I draw in a little bit of a trend line on here That should give us a certain indication of roughly where the resistance line is and we sort of there or there abouts Already probably a better rule of thumb is to really have a look at potentially This level here on the dollar index and what we've also seen is potentially a breakout in the value of the pound in the wake of those that Bank of England meeting and that statement which suggested that Several or a majority a majority on the MPC Thought that some partial withdrawal of stimulus might be prudent in the course of the next few months Obviously if the data holds up so what we've seen in the pound against the dollar is this break above that 133 20 area which I highlighted as my my target in the April breakout that we saw earlier this year We've gone further than that we've gone further than that by quite some distance And I think the next level to really keep an eye out for on the cable is the 200 week moving average now that comes in Just above 134 so certainly be looking very closely to see how the pound reacts around that particular level and to see and much will be term it much will be determined I think on how dovish the FOMC is or how hawkish the FOMC is with respect to its Policy stance as we head towards the end of the year and let's not forget also But as we head towards the end of the year Stanley Fisher who's the vice chair of the Federal Reserve will be leaving in October So September will be Stanley Fisher's last meeting as vice chair of the Fed But currently there won't be anyone in place to replace him And he's not likely to be replaced until early next year and it also obviously casts into doubt With respect who's going to replace Janet Yellen at the moment her future still remains unresolved But Donald Trump has softened his tone around Janet Yellen So there is an outside chance that she could actually stay on so we'll have to wait and see on that point What am I also keeping an eye out for this week apart from the Federal Reserve and the Bank of Japan? I mean they are obviously the primary Factors that I'm looking at but I'm also looking at the latest CPI numbers out of the European Union We've seen prices drop back to 1.3 going to see whether or not there's any upward pressure and inflation They're certainly food prices in Germany have ramped up quite significantly over the course of the past few months So it'll be interested to see whether or not that translates across into the mainstream EU CPI numbers and whether we get a move back towards 1.4 1.5 and 1.6 percent and we also have flash PMIs from France and Germany Well, we've also seen over the course of the past few days is a significant reversal in Euro sterling so for all of those people who are calling for parity in euro sterling All those at the at the end of August towards the end of August. It looks like They're probably going to come unstuck on that particular call and I have to say I'm not really surprised by that when everyone starts calling for parity in euro sterling in the same way that everyone was calling for parity in Eurodollar usually that's time to actually turn your position around and that certainly looks to be what's happened here If we look at the way the weekly chart looks we weren't able to break above that previous I at 93 We since reversed quite substantially and it looks to me as if we could well retest this 8850 level on Euro sterling probably will see a bounce there because we've quite with Significantly oversold on the daily RSI and we've also got the 100-day moving average coming in which could also prompt a little bit of Rebound, so that's it for this week. Once again, thanks very much for listening this month Houston talking to you from CMC markets