While oil inventory levels continue to remain high the fact that we are now starting to see bigger than expected draws on a much more regular basis is helping keep the momentum behind the current rally sustained for now, with prices slowly being pulled upwards to the $50 a barrel mark, as both Brent and US prices move in lock step with each other. This in turn is creating a positive feedback loop into the oil and gas sector pulling the big cap oil companies higher, and in the process pulling equity markets higher along with them. We do now appear to be seeing the effects that the decline in US output is having, and while supplies remain elevated the glut does now appear to be diminishing, ahead of next week’s OPEC meeting in Vienna. Banking stocks also had another decent day on the back of the latest funding plan for Greece. While there isn’t much optimism that the deal will be any more successful than previous debt deals, the mere fact that the next stage of the saga has been kicked over the next funding hump and into the end of the year has been greeted with relief, as the day of reckoning once again gets pushed out into the future. The pound looks well set for another positive week as the referendum campaign continues to generate more heat than light, with Friday’s impeding purdah deadline looming like an oasis in the desert for those of us sick of the incessant dire warnings of economic Armageddon from various government bodies. This ban on using official government machinery to push the “Remain” case will be a welcome relief to those of us bored rigid by all the manipulated facts and figures. If only we could gag the politicians as easily. Later this morning we’ll get the latest iteration of UK Q1 GDP, which is expected to come in unchanged at 0.4%. UK growth has been slowing for quite some time now and while it is likely to be difficult to garner too many clues from this latest set of numbers there is a worry that business investment is starting to slow down. This will be of particular interest given that in the first set of numbers we saw a decline of 2%, however given that we saw some decent PMI numbers from the construction sector towards the end of the quarter we might see this number nudged up a bit. What these numbers won’t do is give us any clues as to the extent of the slowdown in the Q2 data which to date has been disappointing, retail sales numbers notwithstanding. Moving on to the US we’ve heard a lot of rhetoric from US policymakers with respect to the potential for a June rate rise, and while the odds of a move have increased the evidence for one isn’t exactly compelling. One decent new home sales and retail sales number hardly counts as evidence of a Q2 rebound. We’ve already seen in the recent May data that the manufacturing sector is continuing to struggle and probably in recession, and yesterday’s disappointing Markit services PMI number for May suggests that the US services sector could be starting to slow too. Fed hawks will point to the decent retail sales number seen earlier this month, but durable goods have been consistently disappointing for 18 months now. Will today’s April numbers finally show signs of a pick up after a 0.2% decline in March? Expectations are for a 0.3% gain, which is hardly inspiring. Weekly jobless claims are expected to come in at 275k while we will also find out if the pending home sales market is as robust as the new home sales market. We’re expecting to see a 0.7% gain for April, slightly down from the 1.4% gain seen in March. EURUSD – currently holding above the 200 day MA at 1.1100, as well as trend line support at 1.1040 from the December lows. While we do so the current uptrend should remain intact with a move back through 1.1250 needed to stabilise, and point the way to a return to the 1.1400 area. GBPUSD – currently well supported on dips and closing in on 1.4770 this month’s high and looking to test the 200 day MA at 1.4785 as we look to kick on towards 1.5000. As long as we stay above the recent lows at 1.4330 the uptrend looks set to remain intact. EURGBP – the failure to push back through the 0.7785 level and the100 day MA, has prompted a sharp sell-off and as such we look set to test towards the 0.7500 area and 200 day MA, having broken below the 0.7680 level. USDJPY – while we remain below the recent highs at 110.50 level the US dollar remains vulnerable to a return to the 106.00 level. A slide below 108.70 opens up the downside once more, while we would need a break above 110.50 to suggest a move back to 113.00 CMC Markets is an execution only service provider. 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