Europe A lower than expected Chinese PMI services report and a tightening of credit rules in the Chinese real estate market along with an underwhelming earnings report from global banking giant HSBC has kept European markets on the back foot today as investors once again take the cautious approach, given the proximity of the London market to five year highs. Mining and banking stocks have led the markets lower, with Kazakhmys leading the way after seeing its target price cut by Deutsche Bank. Other fallers include Rio Tinto, while Lloyds Banking Group, RBS and HSBC are all lower. Lloyds Banking Group in particular is likely to find upside progress challenging after last week's revelation that the government could well be looking to sell its stake at the 61p level. As an exercise in capping the recent share price recovery it is hard to imagine a more misguided thing to announce. On the plus side engineering giant GKN is near the top of the pile after being upgraded by Goldman Sachs, while outsourcing company Capita Group was getting a fair wind from an upbeat Jeffries note. The defensives sectors of pharmaceuticals and utilities are also having a fairly positive day helped by todays sell-off in the more cyclical stocks, with Centrica a notable gainer on the back of broker upgrade from Societe Generale. US US markets have opened on the back foot today weighed down by the softer tone from Europe, however there does appear to be some residual caution on the back of the weekend signing of the sequester by President Obama. While on the surface the effect of $85bn of cuts might seem a lot, the net effect of it over the coming months is likely to be fairly muted when set against the $85bn a month of stimulus the market is absorbing from the Federal Reserve. Stocks in focus include oil rig operator Transocean after announcing a fairly good set of quarterly numbers. Apple shares continue to come under pressure hitting another 52 week low as the once darling of the technology sector continues to convince investors that it still has the Midas touch. FX Despite a pretty dreadful construction PMI number for February the pound has managed to hold its own today despite another attempt to move below 1.50 against the US dollar. It would appear that for now the QE premium may already be in the price after the losses seen in recent days. It is also being helped a little by concerns over events in Europe, declining investor confidence, another rise in Spanish unemployment and the continuing political deadlock in Italy. These factors have weighed on the single currency but have thus far not been eonigh to take out Friday's lows at 1.2965. The Australian dollar is the worst performer ahead of tonight's retail sales numbers and RBA rate decision. Given the weakness in building approvals seen earlier today there appears to be a rising acceptance that the RBA could well start to become a touch more dovish, even more so if recent data out of China continues to weaken. Commodities Weaker crude oil prices continue to point to weakening demand, not a particularly encouraging sign for equity markets, with US prices pushing below their 200 day MA for the first time since September last year. Brent prices, on the other hand while also lower continue to lag, however if concerns about demand from China continue to play out then we could well see further weakness here, though for now it is finding support above its 200 day MA. Gold prices continue to find upside progress to the upside difficult to sustain, despite the prospects for further stimulus in the coming months, though it is higher against the pound, euro and yen over the past few weeks. Copper prices continue to paint a picture of a weak global growth outlook, further muddying the waters with respect to the rally in US markets and the FTSE. Year to date copper is down nearly 3% which suggests commodity traders don't share equity market traders optimism about growth. 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.