 Hello and welcome to CMC Markets and this quick look at the week ahead beginning the 31st of July And we're well into learning season now And we've seen some good numbers and we've seen some not so good numbers But one thing does appear to be a little bit clearer and equity markets despite the record highs once again being posted in US Markets particularly in Europe. I think markets are starting to look a little bit tired We're certainly seeing it play out in the way the German DAX has been behaving in recent weeks We've broken out of the sideways trading range that we were in throughout May and June started to break lower and Certainly there's potential for us to push lower towards the 200 day moving average. Also the FTSE 100 Also is starting to look a little bit on the heavy side, but probably not to the same extent I think there is a there is a case to suggest that the higher pound Against the dollar and the higher euro against the dollar is starting to impact. I think on the performance of European markets in general But certainly in the context of this week's key events coming off the back of Last week the key events for this week are going to be the US employment reports and Wider US data in the wake of the Fed decision to keep rates on hold That wasn't really a surprise. I think the market Took the Fed statement with a slightly more dovish slant than I think they were actually positioned for but I think the downside for the dollar is now starting to Push into some very very key support areas So certainly if we look at the way the dollar has performed over the course of the past few weeks We can see a good benchmark of where the key levels are with respect to euro dollar We've broken above the 116 20 levels and that's sort of borne out by this chart here That was the previous high in 2016. We've broken above that and we're currently trading above that So I think that's going to be a key level But if we actually look at the weekly chart and I've talked about this before The 200 week moving average is going to be a very very key level on your dollar as we go into August If we also look at the dollar index, there is a similar 200 week moving average coming in to support that So I think we need to be cognizant of the fact that we are due a little bit of a rebound in the dollar And that could actually prompt a little bit of euro weakness and some sterling weakness as well on the pound It's a big week. We've got the Bank of England rate decision as well as the quarterly inflation report on a whole host of PMI data services construction and manufacturing So let's look at the the Bank of England rate decision because at the June meeting we saw Three dissents we saw three members of the MPC vote for a rate rise now We're probably not going to get that this coming week because Kirsten Forbes or Kristen Forbes who was on the MPC Has left so I think the key person to watch out for with respect to this week's particular vote Will be Andrew Haldane the Bank of England's Chief Economist who suggested at the June decision or after the June decision that he was minded to vote for a potential rate rise Decided not to on the basis of weak wage growth now I don't think too much has changed with respect to that story We saw Q2 GDP last week come out at 0.3 I was a little bit disappointed by that because certainly judging by the PMI data that we've seen for April and May The manufacturing and construction components of that GDP number are very weak So there's a significant variance there with respect to what the PMIs are telling us and what the GDP numbers are telling So we could get a revision there in the coming in the coming weeks Also, we've got an RBA rate meeting I don't really think there's going to be too much with respect to that And then we've got a whole host of earnings numbers as well. Now we've seen Coming from the banks Lloyds and Barclays a bit of a mixed bag Lloyds banks numbers were I thought actually on the face of it Fairly decent, but again once again, we have PPI provision for Lloyds We've seen PPI provision for Barclays I think the big elephant in the room at the moment is consumer credit and Lloyds put aside around about 141 million pounds with respect to consumer credit provision Which I think is a little bit too low consumer confidence is starting to decline a little bit And certainly the UK consumer is starting to get a little bit squeezed But it does appear to be some evidence I think that the squeeze on wages may be starting to diminish because we saw CPI inflation fall back to 2.6% and Wages tick up to 2% so we'll see how that story plays out over the course of the next few weeks We've also got the latest numbers from BP Shells numbers were particularly good despite the fact of the low oil price so certainly I think the Diversity in shells portfolio with the acquisition of BG group has appeared to be bedding down I think the biggest question marks remain about around BP's dividend So keep an eye on the debt numbers there and then we've got RBS's Q2 Numbers coming on the back of the Lloyds and Barclays numbers and again here I think the you know, I think the key the key thing here will be how well of how well its investment banking division have done Ultimately those have that's been really the weak point in all the banking numbers And we've also got Q3 Apple numbers. So Apple's numbers will be I think very very closely scrutinized For this particular course with terms of iPhone sales iPad sales have been disappointing and what is Apple doing with respect to Apple TV to combat the rise of Netflix and Amazon because they're certainly spending an awful lot of money in Buying additional content for their platforms and Apple TV appears to be getting left behind. So I think the big question The Tim Cook is what is he going to do with Apple TV? Is he going to start investing in it or is he going to push it to one side? But the big item of the week is the US employment report expecting a slight moderation in jobs growth there from 222,000 to 175 the key thing with respect to that is once again wages and inflation wage growth still Continues to look weak and until such times as we some we see some evidence of a pickup I think the likelihood of a Fed rate rise this year continues to diminish to diminish ever further and certainly I think last week's Fed statement reinforces that fact so Looking looking at the charts at the moment. I think there is potential for a little bit of a rebound in the dollar I think the pound Still still looking fairly decent in terms of the overall uptrend I'm still of the opinion that we can push up towards 133, but we could get a pullback towards these lows that we saw around about 129 and a half and this trend line support that we've got coming in here Obviously the key support on euro dollar at the moment is around about 116 15 116 20s to keep an eye on that if we break below that we could head back towards 114 80 and euro sterling in light of the Bank of England Inflation report later this week I think the key support there comes in around about this 88 60 88 70 level We have seen a little bit of a pullback in euro sterling over the course of the last few days But it's quite clear to me at the moment that remains in an uptrend and the pound remains under pressure So that's it for this week Let's see. Yeah, that's it for this week. This is Michael Houston talking to you from CMC markets