While US markets were able to rebound post last nights Fed rate decision, the same doesn’t look likely for European markets this morning, as we look to open sharply lower ahead of today’s Eurogroup meeting, which has been touted as the last chance to get some sort of Greek deal enacted by the end of June. With the ECB unwilling to be dragged into the political fray about Greece’s ultimate fate the ELA was lifted by another €1.1bn to €84.1bn yesterday, as Greece’s slow bank jog continues. Last night’s Fed meeting proved to have something for everybody with a good number of policymakers expecting to see at least one and possibly two rate rises before the end of this year, according to the median “dot plot” chart projections of the Fed funds rate. These “dot plots” unfortunately have never been a reliable guide to the glide path of rates in recent years, and it could be argued as to being the equivalent of licking your finger and putting it in the air to test the wind direction. The fact that the FOMC, followed in the footsteps of the IMF and OECD and quite sharply downgraded its growth forecasts was much more telling. The growth forecast for 2015 was cut to below 2%, well below the growth rate we saw in 2014, while its inflation forecast was little changed at 1.9% to 2% by 2017. In her press conference Mrs Yellen was pressed on a number of factors including Greece and the strength of the US dollar and she did accept that both could well continue to act as a drag on the US economy, which would appear to suggest that unless we see a significant improvement in the data in the next few months a move in September remains unlikely at this point, given that the Fed appears to be in no particular hurry. Today’s Eurogroup meeting in Luxembourg has been touted as the “last chance saloon” for Greece to agree a deal in time for the end of June. Regrettably the meeting is likely to come and go without any deal given that Greek officials have refused to submit any fresh proposals, and Greek Prime Minister is jetting off to Russia to see President Putin, which means we may well get some talks over the weekend. In a sign of how bad things have got the Greek central bank broke with convention and abandoned its neutrality by criticising its incumbent government for the policies it was implementing, in a sign of the fissures opening up in the Greek establishment. Yesterday we saw some good news for the UK economy after the latest wages data showed that salaries rose by 2.7% in the three months to April, the biggest monthly rise for over four years. With inflation in April in negative territory this data goes some way to reversing some of the spending squeeze put on consumers in the last five years. It also invites the prospect of an increase in speculation about the timing of a possible rise in UK rates given that in the latest Bank of England minutes two policymakers, most likely Weale and McCafferty, stated that keeping the status quo of “no change” was a finely balanced decision. Yesterday’s better than expected wages data is likely to have shifted the dial on that, and if sustained at the current level in subsequent months then we can expect the divisions we saw last year on the MPC start to reassert themselves, as Weale and McCafferty start to vote for rate increases again, particularly if the rise in rates translates into increased consumer spending. Having seen a sharp rebound in April retail sales of 1.2% the expectation would be if the rise in wages is sustainable, then the May numbers may not slip back by as much as people think. Expectations are for a slowdown to 0% for May. EURUSD – the euro seems content to range trade between support around the 1.1200 area and the highs this month at 1.1380/90 level. Major support still sits at 1.1050, a break of which could see a significant move lower. The main resistance remains at the May highs at 1.1480. GBPUSD – yesterday saw the pound move through the May highs and test the 1.5880 level which is 50% retracement of the down move from last year’s high at 1.7190 to the lows this year at 1.4565 It is also the 200 week MA. A close above here targets a potential move to 1.6180. Only a fall below the 1.5400 level suggests a move back towards trend line support at 1.5320, from the lows this year at 1.4565. EURGBP – the euro continues to decline having failed to push above 0.7250 earlier this week, which suggests the possibility of further weakness towards the 0.7080 level. Only a move back through 0.7250 argues for a return towards 0.7300. USDJPY – the US dollar retested the neckline support break out from last week at 124.40 but was ultimately unable to push beyond it before sliding back. The bias therefore remains for a move towards 121.80 as the recent topping pattern alluded to last week played out. CMC Markets is an execution only service 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.