Has the summer equity rally started to lose its legs, or is yesterday’s slide back in equity markets merely a symptom of the summer doldrums, rather than any concerns about the timing of any Fed tapering program. As far as economic data is concerned the direction of travel remains positive, particularly in the UK and the US, while Europe continues to offer some encouragement as levels of economic activity continue to show flickers of life. Central banks continue to remain in accommodative mode with the Reserve Bank of Australia joining the party overnight by reducing its headline lending rate, as expected, by 25 basis points to 2.50%, on concerns about a slowing Australian economy. Market reaction to the actions of the Australian central bank was broadly ambivalent, though the Australian dollar did embark on a sharp short-covering rally. As for Asian equity markets, the reactions was broadly muted, but with a slightly negative bias, and as such we can expect a broadly lower open for European equity markets. The UK economy continues to look sprightly after yesterday saw a bumper services number for July as well as an impressive composite number as well, raising expectations of a good Q3 growth number. With BRC retail sales for July rising 2.2% year on year we’ve yet to see a significantly disappointing UK economic number and the hope is that the run of decent economic data continues later this morning. This is when we hope to see improvements in the latest June Manufacturing and industrial production numbers, which are expected to show month on month gains of 1% and 0.7% respectively. Good numbers here could also raise expectations about the possibility of an upgrade later this month to the recent Q2 GDP number of 0.6%, while the latest NIESR GDP estimate July, due at 3pm, is expected to show a rise of 0.6%, but given the strength of some of the recent data we could well see a higher estimate. Moving into Europe we have seen some evidence that the Italian economy may well be turning around after its recent slump, however progress remains painfully slow with the political gridlock through a good part of this year, not helping the economy. The latest Q2 GDP number is expected to show some improvement from the previous 0.6% contraction in Q1, but not much with a consensus figure of -0.4% expected, which would translate into a 2.2% contraction year on year. On a slightly more positive note industrial production for June is expected to show an improvement of 0.3%, up from 0.1% in May, but given the weakness seen in the PMI data for both manufacturing and services over the last twelve months there still remains some way to go before we can expect any meaningful growth in a country that last saw a positive quarter of GDP growth in August 2011. With a debt to GDP ratio rising to 130% of GDP and unemployment at 12.1%, the economy desperately needs the government to continue its economic reform program, or run the risk of being on the receiving end of another ratings downgrade and risking the current stability in the bond markets. Unfortunately Italian PM Letta is not being helped by the media circus surrounding the Berlusconi trial and verdict, which is preventing him from pushing on with a reform program. The fragility of the coalition remains the biggest obstacle to the next steps in this particular economic story. In the US we the only data of note is the latest trade balance numbers for June which are expected to narrow from -$45bn to -$43.5bn. Tuesday kicks off earnings from the UK mining sector. Precious metal miner Fresnillo is first out of the gate and is expected to report first half earnings of 34 pence down 27% from a year ago. The shares have literally been cut in half since the end of November so expectations are low. Last week’s results from Canadian miners which included multibillion dollar write downs and dividend cuts showed that there could still be shoes left to fall. we are also expecting to see the latest trading statement from Asia focussed bank Standard Chartered after the disappointing market reaction to HSBC's half yearly results yesterday. Results from European banks continue this week headlined by Credit Agricole who are expected to report adjusted EPS of €0.20. The previous quarter had beat the street €0.29 to €0.21. Shares have been trading in a €6.00 to €8.00 range for the last six months. Reports from Unicredit and Deutsche Post are also expected on Tuesday. 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.