After the euphoria of last Thursday's US payrolls numbers, normal service is resumed today with the return of US markets after their long Independence Day weekend break. With the US absent on Friday, European investors appeared to seize the opportunity to wrap things up for the week early with one of the lowest volume trading days of the year, and a pretty mixed finish. While US investors seem intent on breaking one record after another, and intent on targeting 2,000 on the S&P500, European markets continue to be much more cautious, not surprising really when you see the quality of some of the economic data. These concerns about economic data in Europe and more globally prompted IMF chief Christine Lagarde to warn that it could well cut its growth forecasts this month when it completes its latest assessment of the global economy. The biggest concern remains that Europe's biggest economy, that of Germany, is starting to stall, while the French economy looks set for another recession after last week's most recent data, showed deeper contractions in economic activity. Friday's surprise 1.7% decline in German factory orders for May only served to reinforce the caution about the German economy, even allowing for the ECB's insistence that it remains ready to act further if necessary. This morning's May industrial production data could reinforce these concerns with no change expected, down from 0.2% in April. While US stock markets enjoy the giddying heights of 17,000 for the Dow and the possibility of 2,000 for the S&P500, some retail investors have already decided to start moving to the sidelines after US stock market mutual funds saw a net outflows for the first time this year, to the tune of $1.7bn. This may not be significant in itself, but it might show that after such a long rally, some investors might be thinking that with the start of earnings season this week, the potential for disappointment remains quite high, given the worse than expected performance of the US economy so far this year. There is also the small matter of the latest FOMC minutes due on Wednesday, which given recent comments by Fed Chief Janet Yellen over the past few weeks shouldn't contain too many surprises. That doesn't mean that discussions about the risks of inflation won’t have been up for discussion, and we've heard plenty of chatter from Fed members like James Bullard about the likelihood of rate hikes as soon as Q1 next year, data permitting. While markets appear content to ignore Mr Bullard's comments given he isn't a voting member on the FOMC this year or next, he generally tends to be one of the more dovish voices on the Fed board, which means it wouldn't be unreasonable if a number of FOMC members shared his view. The bond market reaction to Thursday's data would seem to suggest that bond investors think that a hike is coming after the 2 year bond dropped to its lowest levels this year, and post its highest yield this year, at 0.51%. EURUSD – the euros slide last week reversed the previous week's gains but has as yet done nothing to reverse the overall up trend. The broader range remains intact and while we hold above the 1.3500 level the risk of a move back towards 1.3700 remains more likely. The key support remains at 1.3485 where we have trend line support from the 2012 lows. GBPUSD – 1.7180 has capped the pound for now, but we remain on course for further gains towards 1.7330, while above 1.7040. 1.7330 is the 50% retracement of the decline from the 2007 highs at 2.1160 and the lows at 1.3500 in 2009. Only a move below 1.6910 support delays the scenario above. EURGBP – the euro continues to fall as we look to move towards 0.7880. We need to push through the 0.8035 area to stabilise and target 0.8085. The pressure remains on the downside while we remain below trend line resistance from the March highs now sitting just below the 0.8060 level. USDJPY – we remain on course for a move towards Ichimoku cloud resistance at 102.50, and towards the range highs just below 103.00. Any weakness should find support around the 101.80 level. 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.