Yesterday turned out to be somewhat of a mixed bag for European markets with the FTSE100 finishing the day lower, while European stocks finished in a much more resilient fashion, probably on speculation that we might see a dovish ECB later this week at its monthly meeting. US markets didn’t fare much better closing flat as a number of earnings announcements disappointed. Morgan Stanley missed on profits and revenues, while oilfield services provider Halliburton managed to miss even the worst expectations as sales dropped 36%, as low oil prices forces the company to discount heavily. IBM also disappointed after the bell with revenues coming in sharply below expectations, while the company also guided down its outlook for this year, on the back of a stronger US dollar, with Asia Pacific seeing a particularly sharp decline in revenues of 19%. The fall in the UK benchmark was primarily driven by weakness in the commodity space with sharp falls in copper and crude oil prices. The drop in the copper price was driven by the weakness in yesterday’s September Chinese industrial production data which came in much weaker than expected. It is becoming increasingly apparent that the accuracy of China’s GDP number is a symbol for domestic consumption, rather than a reliable indicator of the Chinese economy, even though it still came in at its weakest level since 2008. As far as markets are concerned the Chinese GDP number is more like one of those cars you get in a second car showroom which has been buffed up to look nice, but when you take out for a run doesn’t run anywhere near as good as it looks, and to get a good feel for how good it is you need to have a good look under the bonnet, and take it for test drive. Given some of the data we’ve seen in the last few weeks the internals outside and inside the country tell a rather different story. While September retail sales hit their highest levels since January this year at 10.9%, they don’t really tally with the September import data which showed a fall of 20.4%. The industrial production data came in at its lowest level since April this year at 5.7%, knocking the stuffing out of the mining sectors recent rally, while the slide in oil prices appears to have its origins in the news that Saudi Arabian crude oil stockpiles are at record highs, though China’s weak data didn’t exactly help either. While the weakness of commodity prices has its upsides, in the form of low inflation, we are now starting to see the downsides with job losses across the board in global manufacturing, not only in the UK, but in the US as well, while China has bailed out one of its own state owned commodity miners, in the form of Sinosteel, which has been haemorrhaging cash hand over fist, as it sells steel below market prices. EURUSD – last week&rsquo s bearish key day reversal and failure to overcome the 1.1500 area keeps the pressure on for a move towards 1.1220 in the short to medium term which is where we have the 100 day MA. GBPUSD – last week’s failure to push above the 1.5500 area significantly suggests we may have to wait awhile for a move towards 1.5630. The market is looking a touch overbought which could bring us back to support at 1.5420 and 1.5360. EURGBP – last week’s failure to overcome the 0.7500 area could well see further declines on move below the 0.7320 area towards the 200 day MA at 0.7270, and the September lows at 0.7200. We need to see a rebound back through 0.7420 to retest the highs at 0.7495. USDJPY – in a proverbial case of watching paint dry we continue to oscillate between the range extremes of 121.00 and 118.20. The bias remains to the downside while below the 120.00 area, with a break of 118.00 targeting the 116.00 August lows. 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.