 Hello and welcome to CMC Markets on Tuesday the 22nd of July and the weekly market update. It's certainly been an interesting last few days. US markets continue to play ping-pong between the bulls and the bears. Ping-pong for the uninitiated is table tennis. The German Dax on the other hand continues to diverge away from the S&P and that's something that I really want to look at in the context of what's going on in the US and what's going on over here in Europe because I think the events of the past week could well play into the European growth story over the second half of this year particularly if sanctions against Russia are increased as a result of last Thursday's tragic events over Ukraine. So in that context I'm going to look at the S&P I'm going to look at the Dax, do an overlay of the two and then I'm going to look at the Dax in isolation. I'm also going to look at the economic data that we do we've got due coming out of Europe this week. Then I'm going to have a quick look at the pound against the dollar in the context of the UK data that we've got coming out later this week and I think that's going to be really important we've got Q2 GDP data coming out later this week we've also got UK retail sales for June which should give us an early indication I think as well of whether or not the GDP data that we get is either revised up or revised down. Also have a quick talk about the Bank of England minutes in the expectations there and last but by no means least going to look ahead tonight to tonight's earnings announcement from Apple and look at the prospects of whether or not we see any further upside there. So let's start with a simple overlay chart of the Dax and the S&P 500. Now it's going to be seen from this daily chart for quite some time the Dax and the S&P pretty much moved in close correlation to each other. It's only since the beginning of June that that correlation has decoupled. Now why is it decoupled? Well I think there's a number of factors at play obviously deteriorating economic data in the Euro area. The fact that the ECB's recent policy adjustments probably aren't going to make that much of a difference. Obviously the escalation even with respect to events in the Ukraine and also this week's announcement by the German Bundesbank about the prospects for Q2 GDP growth in Germany. They've stated that at best we can probably expect stagnation. Now that puts into context this week's economic data out of Germany in particular and the preliminary PMI data that we've got coming out from France and Germany on Thursday and the IFO on Friday. Now let's look at the daily chart for the Dax and I think that in particular is approaching a very key support level on the daily chart and we can see that on this candle chart since October last year. Now this trend line comes in from the 2012 lows and it's also just above the 200 day moving average. Now we can see the three peaks in June and July. We're now starting to break down. We could well test that trend line and if we break below that trend line then we could well see further losses in the Dax over the course of the next few days, weeks and months. But while we're above that trend line the overall uptrend remains intact. So it's certainly a level to keep an eye out for. So now let's look at the pound against the dollar. Now we've heard an awful lot of speculation about when we can expect some form of tightening from the Bank of England. Certainly I think some of the data that's coming over the past few days and weeks has been somewhat mixed and has taken a little bit of the expectation of a potential rate hike this year. Now this week we've got the latest GDP numbers expecting growth of 0.8% in Q2. We've got retail sales numbers for June and we're expecting a slight rise from the decline that we saw in May. But above all else we've got the Bank of England minutes and they could be instructive in the context of any splits or divisions on the NPC on the vote setting committee. At the moment the vote is 9-0-0. Could there be a dissenter in terms of asking for a rate hike? I think that's the key question that we'll be looking for on Wednesday. But at the moment the pound does appear to be giving the impression of starting to roll over a little bit. As can be seen from this chart in front of you we have got a weekly chart and I've drawn a trend line from the June lows last year at 1.48 and we can see that sloping trend line. It comes in round about the 1.70 level. Now at the moment it's finding a little bit of support around about 1.70, 1.35-40. Certainly client sentiment appears to suggest that our clients are looking for a move towards this trend line but as with all things for an exchange sentiment can change very very quickly. So certainly worth keeping an eye on that. But in the short to medium term the lows do appear to be getting lower and the highs look to be getting lower on the daily chart as well. Keep an eye on the 1.70, 1.35-40 level. Keep an eye on the 1.69-80 level. If we get a break below that trend line from the lows at 1.48 last year then we could see a little bit more of a sterling sell-off. But I think that remains a little bit each way at the moment given the fact that the pound has traded in a fairly tight range over the past couple of weeks. So let's quickly finish off with Apple, our old favourite right here. As we can see from the daily candle chart in front of us, it's been a fairly good quarter since the last earnings announcement at the end of April. Pretty much one-way traffic since the 1.7 stock split. The fact that Apple was much more optimistic about earnings expectations going forward. And also the fact that a recent pronouncement by an Apple executive that they had the most exciting product platform or product pipeline I should say in the last 25 years has really ramped up expectations back towards those all-time highs that we saw in 2012. Now on a stock adjusted basis, those all-time highs are at $100. The key question with tonight's earnings is will those expectations live up to market expectations? And at the moment the price does look a little bit stretched. The $100 mark is really the key level for upside in Apple, Apple share price. I think what we really need to see is not only a blockbuster earnings announcement and that's by no means a given given the fact that Samsung has issued a profit warning and they remain under pressure in China. So the likelihood is that Apple could find that their margins are shrinking as well. The key question is what new products are coming out? Will we get an iPhone 6 Sapphire? That's been really at the forefront of market expectations. So certainly keep an eye on that trend line from the levels that I've highlighted in April, that break higher, that gap higher. I've drawn a line through those lows there. Keep an eye on that trend line. It's around about $92. If we break below that we could see a move back towards the June lows just below $90 at around about $89. And on that note I'll wind up this week's weekly market update. Once again, thanks very much for listening. This is Michael Houston talking to you from CMC Markets.