Yesterday’s US session was an extremely turbulent one as markets got pulled in both directions, by better results on the one hand, while getting pulled the other way on poor economic data, as well as simmering concerns about events in Ukraine, after skirmishes broke out when Ukrainian troops moved in to clear out separatists at a provincial airport at Kramatorsk, and elsewhere in the eastern part of the country. In the end US markets performed a remarkable turnaround after being sharply lower at one point to close sharply higher for the second day in a row, despite Russian claims that Ukraine was close to “civil war”. For now it seems that the bulls and bears are fighting it out for supremacy in an environment that is fertile ground for both at the moment as equity markets dance to an uncertain tune. This morning’s Chinese economic data could well add to that market uncertainty after the latest Q1 GDP numbers showed an economy that looks as if it could well undershoot the Chinese governments 7.5% GDP target after Q1 GDP slowed from the 7.7% seen in Q4, to come in at 7.4%. While disappointing, the number wasn’t as bad as some of the pessimistic forecasts of 7.2% Industrial production for March on the other hand did show some improvement coming in at 8.8% up from the 8.6% seen in February as economic activity bounced back from the slump seen as a result of the factory shutdowns due to Chinese New Year. The extent of the comeback was disappointing though with a number of estimates expecting a number above 9%, and it is this rather feeble bounce back that is likely to prompt more speculation about further stimulus. In a more encouraging sign retail sales bounced back more than expected after an unexpected slow down over the Chinese New Year period, coming in at 12.2%, up from 11.8%, but it is the rather tepid nature of some of this mornings data that will invite speculation about further action from Chinese authorities as they look to meet their 7.5% growth target. The fact is these numbers won’t cut it and given the lack of scope Chinese authorities have in respect of further stimulus measures due to shadow banking concerns, the worry is that the 7.5% GDP target could well get revised lower, in the coming months. Market attention also returns to the UK today after yesterday’s move lower in March CPI to a four year low of 1.6%. This further weakening in inflationary pressures, house price rises not withstanding has raised the prospect that today’s average earnings data could well see wage growth move above inflation for the first time since June 2008, (apart from a two month period in 2010) when average earnings were just above the 4% level, while the inflation rate was just below it. Expectations are for average earnings to rise by 1.8% in the three months to February, which would be welcome news for the hard pressed consumer, squeezed for over 5 years by an almost incessant drain on their incomes. While this would be welcome news in the context of the cost of living story the fact remains that retail prices still remain well above 2%, but as a first step it’s certainly a welcome one. We should also see the unemployment rate continue to improve with the ILO rate for February expected to show a fall back to 7.1%, down from the up tick to 7.2% seen in January. Jobless claims are also expected to show yet another decline by 30k in March, continuing the consistent declines in seen in every month since July last year. In fact over the last nine months the decline in jobless claims has averaged 30k a month. EURUSD – the euro continues to find it difficult to rally with any conviction remaining well short of the recent highs at 1.3970, peaking at 1.3900 last week. As such we could well start to drift lower, but for now we appear to be finding support at 1.3780. There is also long term trend line support from the lows last year coming in at 1.3720. A break below the April lows at 1.3675 could well see a move towards 1.3500. GBPUSD – a Doji for the second day in a row suggests some indecision setting in, but the bias remains for a drift lower which below the 1.6820 level which remains key with respect to further progress. Last week we saw the highest weekly close for the pound since October 2008, but we need a move above 1.6880 to put the pound above its November 2009 highs. While below the risk of a pullback towards 1.6555 remains a possibility, on a break below 1.6670. EURGBP – continues to range trade with a cap currently around the 0.8300/10 level. Only a move below the March lows at 0.8205, argues for a move towards the lows this year at 0.8158. The resistance at the 200 day MA at 0.8410 remains a key obstacle to further gains. USDJPY – continues to range trade with the next key support at the 101.20 area and the March low. A move through 101.20 opens up the 200 day MA at 100.80, a break of which could well see a move towards 98.60. Any recovery now needs to push back through 102.80 to stabilise. 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.