 Hello and welcome to CMC Markets on Thursday the 26th of October and this quick preview of the week beginning the 30th of October and it's certainly an important week for central banks. We've got three central bank meetings this week coming off the back of the European central bank rate meeting and ultimately that's going to be very important in the context of the movements, not only I think of currencies but also I think in terms of the direction of monetary policy going forward. We've had an awful lot of volatility in stock markets over the past few days, I have a little bit of uncertainty about the direction of monetary policy going forward. Certainly I think there is a potential tightening cycle going on, certainly in the context of the Federal Reserve, there's an enormous amount of debate going on with respect to the European central bank and the direction of a potential tapering program there and obviously we have the Bank of England and the potential for a rate rise later this week and that's before we even get on to the Bank of Japan and a host of economic data this week including non-farm payrolls on Friday which we will be covering live at 12.15 to 12.45 because of the clock change here in the UK, US clocks change first weekend in November. So let's get started, basically I'm going to start looking at the Bank of England, I think that's the most important meeting this week certainly from a UK perspective because ultimately the expectation is the Bank of England will reverse last year's rate cuts at 0.25% and push rates back up to 0.5% reversing the rate cut from August 2016. Now there are some out there who would suggest that this could be a policy mistake by the Bank of England, I am not one of those people. The markets have already priced it in, we've had a Q3 GDP number coming in at 0.4%, ultimately there is concern about higher inflation and that could well be articulated in the latest inflation report which is also released at the same time and as such I think what we really need to see is for the Bank of England to follow through on their hints and their insinuations that they will raise rates back to 0.5% on the 2nd of November. A failure to do so would undermine their credibility even more than it already is and could well send the pound sharply lower. Ultimately it's priced in, get it done and as long as the pound doesn't fall below this trend line support from the lows in March then I think the uptrend has been in place since the beginning of this year will continue and we could well look to retest the highs that we saw in November. Hundred day moving average is a key support level as is that trend line from the March lows. Ok so that's the Bank of England, we also have the US Federal Reserve and the Bank of Japan and obviously those two particular meetings are going to affect the dolly end price. Now at the moment there does appear to be decent resistance around about that 1.1440 area, the Nikkei has hit a 26 year high, certainly potential for further gains and I think the election of Shinzo Abe as Japanese Prime Minister for the next 5 years is likely to herald a further dovish Bank of Japan week or easy monetary policy over the course of the next few years unlike the Federal Reserve where it's quite obvious that the Fed is on a tightening cycle, the balance sheet reduction program is starting to get underway. We've also got an awful lot of debate about the identity of the new Fed chair, it's a three way fight at the moment between John Taylor of Stanford University, Janet Yellen the current incumbent and Jerome Powell who sits on the Fed board of governors already. Now I think in the context of the identity of the next Fed chair, ultimately I think it's probably going to be the continuity candidate if it's not Janet Yellen and there has been some debate that Donald Trump is considering her to stay on, I still consider that probably more of a long shot than anything else because ultimately I would argue why does Janet Yellen need the aggravation, she's come under an awful lot of criticism from Donald Trump over the course of the past few years for her role in easy monetary policy and it's only since he's become president that he's started to become slightly more emollient to her, that being said I think she wants to leave a legacy and I think it probably would be easier for her to walk away which would suggest to me that it's a toss up between Jerome Powell and John Taylor. John Taylor generally tends to come from the more hawkish side of the equation given Mr. Trump's pre-election for a weaker dollar I would suggest that could present problems for him down the line and as such I think Jerome Powell already on the board of governors already has a relationship with the rest of the Fed board would suggest that he is probably the most likely candidate going forward. Will we have any change in Fed policy? No we won't, we are expecting a rate hike in December that continues to be my base case it's really a question of well how many rate hikes do we get in 2018 and we're not really going to know that until the remaining places on the Fed board have been filled and there are five of them obviously Fed chair is one, Fed vice chair is another and then there's three other on three others on top of that. We've also got US non-farm payrolls this week and we are expecting a big big recovery from the minus 33 that we saw in September which was affected by the hurricane season in the US. Projections are for a number of 308,000 that for me seems extraordinarily high and would suggest that there's still plenty of slack in the US labor market which the unemployment rate would suggest is not the case. Certainly keep an eye on wages data as well that could be very important in terms of the inflation story and as such I think that particular number as well could have a significant impact on where dolly yen goes. If we break above $1,414 then there's still resistance of $1,1550 and we also had trend line resistance from the highs in 2015 so while we could well see a week again and a stronger dollar we will only see that if we're able to break but break above that $1,1440, $1,1450 area and I'm not sure that that's something that Donald Trump will be particularly welcome. So that's the economic data for this week it's also a big week for tech earnings we've got Facebook's Q3 results we've got Apple's Q3 results and I'll be particularly interested in the not only the revenue numbers but the forward guidance numbers because there's been an awful lot of speculation with respect to Apple's results as to whether or not demand for the new iPhone X is anywhere near as good as they expect it to be at $1,000 or £1,000 a phone I'm struggling to make the argument for even buying an iPhone 8 demand has been fairly weak in expectation I think for a big iPhone X launch in November but given the fact that Apple's cutting its demand for parts for the iPhone that suggests to me that maybe demand is not as robust as maybe they think it will be so keep an eye out for guidance going forward one thing in Apple's favour is that it is getting an awful lot more revenues from its services division I for iTunes the iTunes store Apple Music and what have you and that could well keep the numbers on side but certainly it is showing some evidence of rolling over a little bit which means that we could get a retest of $150 or even the June lows around about $100 at the end of $45 so that's it for this week thank you very much for listening to Michael Houston talking to you from CMC Markets