With bank earnings season getting underway in the US today and valuations under scrutiny more than ever the results from the US's biggest banks could well set the tone for the next few weeks for equity markets all over the globe, particularly if they disappoint market expectations. Ever since Citigroup CEO Chuck Price uttered those now immortal words in 2007 that "while the music was playing we're still dancing" this big US bank has stood out as one of the more permanent reminders of all that went wrong in the financial market crash that has scarred the world economy and financial markets since then. On Monday this now smaller US bank, though it's still third largest by assets, is due to announce its latest Q1 results, against a backdrop of a decision by the Federal Reserve to reject a request by the bank to be allowed to increase its dividend and implement a share buyback program, as the bank looks to cut costs and boost its return to equity target. Having disappointed investors with its Q4 results the recent price action would appear to suggest that markets are starting to lose faith in the turnaround story. The bank also announced earlier this month that it was taking a $100m hit in its Q1 results in respect of a legal settlement on mortgage backed securities, where it will have to pay $1.13bn to settle claims by investors that it had mis-sold these assets. It's been a turbulent few years for one of the US's highest profile retail and investment banks, trading at a fraction of where it was in 2007, but still just under 5 year highs of $55 at the beginning of this year, from lows of $22 in October 2011. The recent decision by the Federal Reserve is the least of the banks problems as banks continue to come under scrutiny for past indiscretions with the latest investigation by the US Department of Justice focussing on suspicious transactions at its California unit with respect to US-Mexico cross border activity. Coming as it does after the problems at its Mexican subsidiary Banamex it's yet another headache for new CEO Mike Corbat as he tries to put the bank on a more stable footing. The fact is there's a good chance that we could well have seen the best of the gains for the big US banks as US regulators hold out the possibility that these banks may well have to hold extra capital requirements to protect against further crises. This new leverage ratio would be in addition to Basel 3 regulations and is an attempt by regulators to try and reduce bank dependency on the wholesale funding market. Earlier this year the price action fell below the 200 day MA for the first time since mid-2012 and March's subsequent rally was unable to get back above it. If we push through the January lows at $46 then we could well see further losses. 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.