 Good morning. Welcome to CMC Markets on Friday, the 26th of March, and this quick look at the week ahead, beginning the 29th of March with me, Michael Houston. Certainly it's been an interesting week for equity markets. It's been by and large a fairly positive week, despite all of the headlines surrounding vaccines, and the tension shall we say between EU, the EU AstraZeneca and the UK over vaccine exports. Nonetheless, markets have been able to pretty much shrug off those tensions. But what those tensions don't change is the economic outlook for or the divergent economic outlook for, say, for example, the UK and the US relative to the outlook in Europe. Reopening plans in Europe have taken a little bit of a setback in the face of rising infection rates, hospitalizations, and a slow rollout of a vaccine program. And the biggest problem that Europe has got at the moment is not so much the fact that AstraZeneca is not producing enough vaccines. It's the fact that they've trashed the AstraZeneca vaccine itself. People like Emmanuel Macron, President of France calling it quasi effective, was probably not the best thing he could have done when the French population tends to be a little bit of a vaccine skeptic in any case. And German political leaders haven't exactly been particularly strident in defending the vaccine either, and they are paying a heavy price for that. And it's incredibly disappointing at a time when Europe and the world needs as many vaccines as it can lay its hands on. I myself had my own back's first jab this week. I had the AstraZeneca vaccine and was happy to take it, despite all of the trash talk coming from Europe about it. Yes, I did feel a bit rubbish for 24 hours, but I'm pretty much over the worst of it now apart from a little bit of a sore arm. As we look ahead to the new week, equity markets or next week and the end of the month and the end of the quarter, equity markets have had a fairly decent quarter. They've had a fairly decent month. And there's no evidence so far that the buoyancy and the bullishness that has been characterized by the past few weeks has run its course quite yet, despite the fact that US 10 year Treasury yields and 30 year yields are much, much higher than they were at the beginning of the quarter. So the big question now is, have we seen the peak in US Treasury yields? And at the moment, it does look as if we may well have. Have we seen a peak in commodity prices, namely copper prices and crude oil prices? Because I think that was amongst one of the key concerns that was helping to drive Treasury yields higher. That and the fact that there was a concern that maybe the Federal Reserve might look to pare back monetary policy support sooner rather than later. Now at the moment, the messaging appears fairly consistent from central banks. And that is, I think, very, very key. In the context of equity markets and the performance that we've seen thus far this week, there is some uncertainty over where equity markets are likely to go to next. But you strip out all the noise, strip out all of the hullabaloo, the political hullabaloo, and look at the price action. The price action is telling me that the highs are getting higher and the lows are getting higher. That is characteristic of a classic uptrend. So the next key target for me on the DAX is likely to be those previous peaks of March earlier this month, around about 14,800. As we look to close in on 15,000, these lows are getting higher. We haven't gone back below 14,200. And until such as times as we do, then the DAX is very much a case or by the dips. Similar sort of thing for the FTSE 100, which is driving me to distraction because I think it should be an awful lot higher, you know, around about 7,100, 7,200. It's not. It's not my fault. But nonetheless, I still maintain it should be much higher than the market is currently pricing it, as I think should the FTSE 250, I think UK stocks are grossly undervalued. And there's certainly potential to play a significant amount of catch up, always assuming that the vaccine rollout program doesn't hit any hitches as we head into the summer months. And the reopening plan continues the way that currently it looks to be playing out on Monday. The stay at home orders will be lifted. We'll still be encouraged to stay local and then shops and nonessential retail will be allowed to reopen on the 12th of April. And that is a time where I'll be very, very happy to get my haircut and maybe have a pint of beer, not necessarily in that order. Nonetheless, here we've got high lows and we need to take out the 6,800 level to retarget the peaks that we saw at the beginning of the year, 6,950 and a move towards 7,000. I still very much of the I'm still very much in the 7000 camp. Nothing has changed my mind on that. S&P 500 similar sort of story, though it may be susceptible to a sell-off in the NASDAQ. That's far. We haven't seen any evidence of significant weakness in the NASDAQ. It's just about holding up. Certainly in the context of these lows here, we are still very much in the uptrend that we've been in since November. So again, very much cases by the dips and we have made a higher high. So looking at the NASDAQ, maybe that's a leading indicator. Maybe it isn't. I don't know. Obviously, we've broken this uptrend here. But what we haven't done is broken below the 200 day moving average. So, you know, even though we broke this series of lows through here, it proves to be a very short lived drop before we ramp back up again. The next key resistance is a series of peaks through here around about 13,300 and obviously the 50 day moving average. If we can get back above there, then the upward momentum should be maintained. One of the key, I think, factors of driving currencies has been the strength of the dollar. After an awful lot of speculation that the dollar would weaken in the face of a significant US fiscal expansion, that hasn't actually been the case. Now, that's largely, I think, been as a result of the fact that the US economy is likely to outperform relative to pretty much everywhere else, Europe, UK and other G7, G8 peers. But it's now starting to hit a little bit of a resistance level on this index here. So that's going to be the next key barrier for me. You strip that around. It's around about one 1750 on euro dollar. If we look at that here and next week's payroll number could be a catalyst that helps drive the dollar further higher. One 1760 was the interim target of this break lower through here, even though we've got a false break here. Nonetheless, we finally hit our target at one 1760, a break of one 1760. We're looking at a retest of these lows down here at one 16. I maintain that that is the line of least resistance. Look to sell rallies on euro dollar. We're below the 200 day moving average. That's likely to be a key resistance on any pullback higher. So looking around about one 1850, look to sell any rally back to one 1850 for a move towards one 16. And the reason for a weaker euro is because Europe is lagging behind in pretty much every conceivable way when it comes to recovery, when it comes to vaccine rollout. And obviously, the fact that they've had to extend their lockdowns in France and Germany and Italy into Q2, the hope was at the beginning of the year that all of Europe will come out of lockdown at the same time. And while the UK does look as if it's going to be coming out of lockdown, the same doesn't look likely to be the case in terms of France and Germany, which means that as far as foreign holidays are concerned, UK consumers are going to have to stay at home and spend the money here. So while we won't get a foreign holiday, we won't get a foreign tourist boost. Hopefully, we'll get a domestic tourism boost for the economy in the summer. I think it's unrealistic to expect that to be allowed to go abroad in much before the beginning of Q3, given given the glide path at the moment when it comes to the easing of restrictions, not only here in the UK, but in Europe more broadly. So now let's look ahead towards non-farm payrolls. That's the key economic report for the new week. Due on Friday, the 2nd of April, it'll be the March payrolls report. And there's high expectations around this report, very high expectations. You've got to put it in the context of a fairly decent February report, which saw 379,000 jobs added in February, 366,000 added in January, and the prospect that we could well see up to 600,000 jobs added in March. And a large part of the reason for that big jump is the signing off of the $1.9 trillion stimulus package a couple of weeks ago. You're going to see a waterfall of cash making its way into US consumers' pockets over the course of the next few weeks. That should have a trickle down effect in terms of businesses employing, taking on new staff, but also consumers spending money. So I think that as we look ahead to the next few months, you're going to see a significant rebound in the US labor market. Let's not get too carried away. The participation rate is still two percentage points below the levels it was a year ago. So there's still a significant level of under-employment going on. That's been stagnant at 11.1 percent for the last two months and likely to remain so. But nonetheless, the US economy could grow in any way or region of around seven or eight percent this year. That's going to turbo charge the jobs market. And as a result, you could well see the US dollar benefit from that. As the US recovery story gains traction relative to Europe and the UK. Now, that's not to say that the pound won't do well as well. That's probably more likely. The pound is more likely to do well against the euro than the dollar. But I still don't think that there's much in the way of downside for the pound against the dollar, even if you account for the fact that we get a fairly decent recovery in the US. Yes, we are below the 50 day moving average. That is disappointing. We have drifted back down from the 137 area and put in a low of 136.70. And we could drift back as far as 135.80, 135.20, rather, and a series of loads through here. Nonetheless, I'm still of the opinion that we can still see a retest of 140 pretty much on the basis that euro sterling. Oops, what did I do there? There we go. Got the right one, that euro sterling is likely to retest the lows that we saw a year ago of 83. Back down here, we're at a very key level or approaching a very, very key support level on euro sterling at around about 85, 35, 85, 30. If we drop below here, then we could see a series of stops get triggered and we could we'll see a sharp retest of these lows that we saw in February 2020 when we're all the way down here just prior to the stock market sell off that we saw in the middle of February last year as the pandemic started to rattle investors' cages. And it's quite it's quite notable that the set off in stock markets coincided with the big rally in euro sterling. So you could actually argue that sterling is a stock market bullishness proxy. So if you're looking at the potential further upside in stock markets, then you could argue that you need to be bullish sterling. I'm just putting it out there. You can disagree with me if you want. We've also got manufacturing PMIs next week. By and large, they've been they've been fairly positive. The flash PMIs are positive for manufacturing. The UK, Germany and France. That's just that's just expected confirmation of that on the 1st of April. We've got the final iteration of fourth quarter GDP out of the UK. Don't really care about that. It's not really telling us anything we don't already know. And we've got earnings numbers from next four year numbers from next on the 1st of April as well. And by and large, given the fact that they've been a high straight retailer and have been very hit very hard by store closures, the company, the business has actually done very, very well since the lows in July. The share price has done very, very well. We've recovered a fairly decent amount of the losses and actually made surpass the highs that we saw a year ago, despite the fact that profits are likely to be quite a bit lower. Nonetheless, I think in terms of the outlook, full price sales dipped by one point one percent for the nine weeks until the 26th of December. That was better than an eight percent decline. Profit forecasts are expected to come in slightly lower, three hundred and sixty five million to three hundred and three hundred and forty two. So full year profits before tax expected to come in around about six hundred and seventy million pounds, which isn't too shabby when you consider that most of the stores have been closed pretty much over 50 percent of the year. We've also got numbers from beyond tech and they will be particularly interesting in terms of their forward guidance for doses and the amount of money that they're going to have to spend in terms of developing production facilities going forward in total. The company plans to be able to deliver two billion doses with the help of its various partners. Now, that move is likely to see its revenues soar. But of course, that also means rising costs. So when you look at his revenues were at the end of two thousand and nineteen, beyond tech had revenues, annual revenues, one hundred and nine million euros, one hundred and nine million euros. The projections for twenty twenty one for the next full fiscal year are six point four seven a billion euros. So you could argue that this share price could well have further to go. It's been an absolutely superb European success story, a success of a startup, you know, a biotech startup that's made all the right decisions and, you know, proven to be a global life saver when it comes to the pandemic. In terms of more broadly, have a look at the oil price. Looking at that there, we look as if we've probably seen a top there for the time being still looks pretty choppy, given the events that are taking place in the Suez Canal. The hope is that once the ever given is refloated, oil prices will start to drop back a little bit as some of the froth comes out of that. When you look at where we were in April last year and where we are now, you would argue that we were probably much priced in in terms of where we should be when it comes to oil prices. And that would suggest that we've probably seen the top and could well drift back down towards the mid fifties. I don't think we're going to move much below that. And in terms of a proxy for risk, I showed you a copper chart a few weeks ago. That hasn't changed that much either. The bearish engulfing candle that I showed you was a fairly decent arbiter of a top. A big question now is where do we go from here at the moment? Fairly decent support around about 390 in the 50 day moving average resistance around 420. So in terms of where we go to next, I think that could be a good indicator of where stock markets go as long as copper prices remain steady, so should stock markets. OK, so that's it for this week. As I say, just a quick reminder about non farm payrolls on Friday. I will be I will be doing a presentation, a seminar, a webinar covering the numbers. Feel free to tune in. The the registration details can be found on the CMC markets website under events. Otherwise, just like to thank you very much for listening. Have a great weekend and speak to you all next week. Thank you.