A big week for macro data this week with the release of a host of Q2 GDP numbers from the UK, US, Canada and Spain, US durable goods, and the latest FOMC rate meeting, could well have broader implications for the recent decline in commodity prices, as key commodity benchmarks trade at multi year lows. This weakness in commodity prices, as well as disappointing economic data, served to act as a further catalyst for stock market weakness at the end of last week, and while in the past this may well have been fairly supportive of stocks, investor reaction now is much more uncertain. While the weakness in last week’s Chinese data is likely to invite the prospect of further central bank policy easing, the extent of the sharp drop would appear to suggest that the Chinese economy is struggling to respond to the measures already implemented, raising wider concerns of a much sharper and deeper slowdown. Even the recent rebound seen in French and German economic data came in below expectations with French manufacturing once again slipping back into contraction territory, while US markets underwent their biggest one week slide since January, as a number of big companies disappointed on earnings and/or guidance, with some citing the strength of the US dollar as a contributory factor. With commodity prices on the slide again across the board, talk of disinflation is once again set to be a primary concern as this weeks Fed meeting looms into view, with investors looking at policymakers to signpost any indications of possible policy action in time for the September meeting. Against this backdrop of uncertainty reports that BP, Shell and Chevron have shelved up to $200bn worth of capex projects, some in the Gulf of Mexico and Canada, is likely to be keenly felt in the manufacturing sectors of not only the US and Canadian economy in the coming months, but globally as well. While all eyes are set to be on this weeks Fed meeting, given recent comments by senior Fed officials, including Fed Chief Janet Yellen, anyone expecting a strong steer this week is likely to be disappointed given that US GDP numbers for Q2, as well as a whole host of revisions, won’t be known until 24 hours later, and the fact that uncertainty surrounding Greece, while abating, hasn’t entirely gone away. Talks about a new bailout have been timetabled to conclude by the 20th August, due to another ECB payment falling due. This looks increasingly unlikely if Friday’s antics are anything to go by, when Athens imposed restrictions on who EU creditors could meet, and what they could discuss as this week’s bailout talks look to get under way. Having passed two reform bills last week the Greek government is pushing back on further measures being asked of it, which means Greece could well run out of money again if no deal is agreed before 20th August. Today the main focus is on the latest German IFO Business climate data for July and US durable goods orders for June. We could see a small decline in the German data despite the recent Greek deal, with last week’s surprisingly weak PMI numbers reinforcing that belief. A slight decline to 107.20 from 107.40 is expected. US core durable goods are expected to come in slightly better than the previous month, with a rise of 0.5% expected, while including transportation a rise of 3.2% is expected, due to orders placed during the recent Paris Air show. EURUSD – last week’s failure above 1.1000 has seen the euro drift back, but while we remain above last week’s low at 1.0815, the risk remains for a push towards 1.1050, and trend line resistance from the recent highs above 1.1400. A move through 1.0800 targets 1.0765, trend line support from the lows this year at 1.0460. GBPUSD – last week’s failure to push through 1.5675 has seen the pound slip back, bringing with it the prospect of a move towards the 200 day MA at 1.5410. Only a move below here argues for a move towards the 1.5200 level. There is currently decent resistance at the highs the last two weeks at 1.5675, which needs to break to retarget the 1.5820 level. EURGBP – the rebound off 0.6930 does appear to be gaining some traction but we need to push through 0.7120 to suggest a short term base is in. The current stabilisation needs to hold above the 0 7000 level for this to unfold. USDJPY – while below the 124.50 level and last week’s key day reversal suggests we could well head back towards the 123.30 initially, on the way to a retest of 122.50. Only a move through the 124.50 level, argues for a return to the 125.85 highs. CMC Markets is an execution only service provider. 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