Europe’s markets look set for a lower open this morning as rising tensions about the Syria situation, political uncertainty in Italy, and an absolute shocker of a US durable goods number yesterday, sow further unease amongst investors about an escalation of events in Syria, political stability in Europe, and about the timing of any Fed tapering program. Comments made late last night by US Secretary of State John Kerry, that Syria would be held accountable for the “moral obscenity” of last week’s chemical weapons attack has raised concerns that some form of confrontation could be being considered. In Italy markets, are once again, having to absorb the political brinksmanship that has come to epitomise Italian politics for years and years, and once again it is Silvio Berlusconi at the forefront of events as members of his party threatened to withdraw support from the government if Berlusconi is expelled from Parliament. Given recent history you would think markets would be used to how Italian politics works by now but given the stakes it isn’t surprising that yields have edged higher and stocks have fallen. In the US, stocks finished lower yesterday after a truly dreadful July durable goods number, which showed a 7.3% decline, well outside of the consensus. On all measures the numbers were pretty poor and once again have focussed investor’s attention on whether the Fed will taper in September or later. The fact that the July numbers were so bad has raised concerns once again about the strength of the Q3 recovery, though as always caution should always be exercised with respect to a single months figure, and the fact that durable goods has a tendency to be a rather volatile number. Investors will hope to have something more positive to chew on later this morning with the release of the latest German IFO numbers. These numbers are always a much better guide to business confidence in Germany than the ZEW numbers which we saw last week, given that they are based on actual surveys of German business. It would be a major surprise if this month’s survey was not a positive one given the much better than expected manufacturing and services PMI data we saw last week for August. Expectations are for an improvement on the business climate from 106.2 to 107, though this could be understating it. The current assessment is expected to improve from 110.1 to 111. While good numbers here are undoubtedly a positive for Germany they in no way disguise the problems elsewhere in Europe, and if we don’t get a ripple out effect from Germany to the rest of Europe over the next few months then this so called European recovery could be very short lived. Later in the day we have the latest US consumer confidence numbers for August and these should give an interesting steer on the strength of the US consumer, particularly in light of yesterday’s disappointing July US durable goods numbers. While a small decline is expected from 80.3 to 79.6, some of the more recent retail data from companies like Wal-Mart, Target, JC Penney and Sears does appear to suggest that the US consumer’s optimism may well be on the wane, so it wouldn’t be too much of a surprise if we saw a much bigger drop. EURUSD – the euro continues to be capped just above the 1.3400 level but is also finding support just above the 1.3300 area. To delay a move towards the 1.3710 area we need to see a move back below 1.3310. To reopen the downside we need to break below the 1.3150 area and the low four weeks ago at 1.3135 to achieve this. GBPUSD – despite peaking at 1.5715 last week the pound continues to hold above the 200 day MA at 1.5515, and while it does so another test of last weeks levels and the 200 week MA at 1.5750 cannot be ruled out. A move below 1.5500 has the potential to retarget the 1.5410 low of two weeks ago. EURGBP – the euro appears to be finding some support above the 200 week MA and trend line support at 0.8506 from the 2012 lows at 0.7705. This remains the key level for the primary uptrend. A move through the 0.8610 level and two week highs could well see a retest of the 0.8700 area. Only a break of the primary up trend line targets a return to the May lows at 0.8405. USDJPY – while the cloud resistance at the 98.80 level and the 99.10 trend line resistance from the May highs at 103.75 caps the upside, the bias remains towards the downside. The triangular consolidation continues to unfold and we could well see a return to the base of the consolidation at the 95.80 trend line from the February lows at 91.05. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person