 Hello and welcome to CMC Markets and this quick look at the week ahead beginning the 12th of June. And what a last few days we've just had because what should have been a fairly straightforward election victory for the Conservative Party has turned out to be anything but. In fact, Theresa May's wish to get an enhanced mandate for her negotiations with Brexit has only served to weaken her further and make it much more complicated with respect to further negotiations with the EU over the Brexit process. Now these negotiations are supposed to start on the 19th of June, but at the moment we still have no clear idea of what form the Conservative Government will take. The Conservative Party is the largest party, but they have fallen short of a majority which means that they will have to rely on the kindness of strangers to get over that 326 seat mark to be able to govern effectively. Now the likely candidates for that look like Democratic Unionists who won 10 seats. And ultimately I think if they are able to come to an arrangement with the Irish Democratic Unionists then we should find out whether or not the Conservatives are able to form a minority government. That seems the most likely outcome if the Conservatives are unable to come to an agreement with the Democratic Unionists which seems unlikely given that the Labour Party remains some way back and Liberal Democrats have ruled out any form of coalition that doesn't necessarily mean they won't rule out a confidence and supply type of motion with respect to supporting the Labour Party and obviously the SNP as well, but on the face of it they don't really have the numbers. So I think unless there is an agreement between the Conservatives and Democratic Unionists the likelihood of another election somewhere down the line remains a distinct possibility. Against that uncertain political backdrop we've also got a raft of UK economic data coming out this week starting with the latest inflation numbers and they're expected to remain broadly as they were in the previous month at 2.7% so UK inflation data for May 2.7%. We're also expecting to find out the latest unemployment data and the latest wages data, the average earnings data and that is expected, the wages data is expected to come in around about 2% including bonuses at 2.4% a slight increase. Their unemployment is expected to remain unchanged at 4.6% and we also have the small matter of a Bank of England rate meeting. Now it probably won't be any surprise to anybody out there that the Bank of England are likely to do absolutely nothing at all given the political uncertainty currently unfolding in the UK at the moment and if anything I think there's a decent chance that Kristen Forbes in her last meeting as an MPC member could well actually reverse her vote to raise rates simply as a result of the political uncertainty they were seeing played out as a result of the surprise election result at the end of last week. So that's the key political risk with respect to the UK. We also have UK retail sales as well which should give us a good indication as to whether or not we've seen or we've seen a slowdown in May after the bumper retail sales number that we saw in April and whether or not the rising prices and the flatlining wages has further crimped consumer spending further. So it's going to be a big week for the pound this week and the likelihood is we could see sterling come under further pressure against the dollar. We've broken below that very key support level at 1.2750 but at the moment we still remain above the 100 and 200 day moving average but if this particular problem isn't resolved fairly quickly then I would expect the pound to come under further weakness in the coming days and weeks ahead. One thing that could support it however is the prospect that any type of hard Brexit is pretty much now on the back burner and maybe there will be much more softer version if you like and maybe Brexit may well not happen at all. At the moment that's still pretty much up in the air but the market could start to price that in. Also coming up this week we've got the latest Fed meeting. The Fed is expected to raise rates this week by 25 basis points. It would be a big big surprise if they weren't to do so but what they could well do is they could come out with a particularly dovish statement and a particularly dovish press conference as well because certainly given some of the data that we've seen out of the US it has appeared to be evidence that the US economy is slowing down the reflation trade is starting to unwind and Donald Trump's problems as US President could well mean that any reform package any infrastructure package could be delayed even further and that's likely to place further downward pressure on the dollar. Also keeping an eye out this week will be Chinese industrial production and retail sales data and given the trade balance data that we saw at the end of last week there could be some evidence that we could see a significant pickup in that data for May. So that's it for this week. Thanks very much for listening. It's Michael Houston talking to you from CMC Markets.