Even if some investors weren’t nervous about the beginning of earnings season before last week, they probably are now, after a poor earnings report from JP Morgan on Friday helped already jittery US markets tip lower still, with the S&P500 hitting its lowest levels in seven weeks, as a combination of concern about overly high valuations and poor Chinese data contrived to keep equity markets firmly on the back foot, while pushing the US dollar, gold and US bonds higher. Investors aren’t likely to get much comfort today with Citigroup the next in line to report and expectations likely to remain low given the banks’ troubles with the Federal Reserve and regulators in the past few months. Events over the weekend in the Ukraine aren’t expected to help risk appetite either after a crackdown on so-called Russian sympathising separatist forces at the weekend by Ukrainian forces from Kiev. The Ukrainian forces were sent into remove separatist forces from government buildings they had forcibly occupied in the east of the country. This action appears to have prompted a rebuke from the Russians, and a call for an urgent debate in the United Nations, while the US has accused the Russians of destabilising the region. Any further flash points here could well reignite concerns about an escalation of tensions and further military skirmishes, particularly with the Russian military camped en-masse on Ukraine’s eastern border. Against this backdrop European markets look set to start off on the back foot as we head into Easter, ironically at a time when some of the more recent economic data is starting to show signs of improvement, particularly in the UK and the US, with a raft of important announcements out this week, including UK inflation, unemployment and earnings data, as well as Chinese GDP and other economic data. Inflation is likely to be a well discussed topic this week with the latest UK, US and EU inflation data due out with the main focus likely to be on Wednesday’s final EU CPI number for March, particularly in light of reported weekend comments from ECB member Benoit Coure at the IMF conference, that the ECB was looking at plotting a QE policy roadmap, if inflation continued to fall. As for the US, today’s focus is likely to be on the latest retail sales data for March which is expected to show a substantial improvement, in line with the recent pickup in consumer confidence data. Expectations are for a rise of 0.9% in retail sales for March, an improvement from February’s 0.3%, most likely driven by a pick-up in car sales; however there is the risk that sales here might disappoint slightly in the same way that the recent payrolls data undershot due to the continued cold weather dampening economic activity. EURUSD – a very positive week last week but we still remain short of the recent highs at 1.3970, peaking at 1.3900 last week. Any pullbacks are likely to find support at 1.3780 and below that at the long term trend line support at 1.3700. GBPUSD – we’ve seen a double tap of the 1.6820 level and as such this area becomes much more important with respect to further progress. Last week we saw the highest weekly close for the pound since October 2008, but we need a move above 1.6880 to put the pound above its November 2009 highs. While below the risk of a pullback towards 1.6555 remains a possibility, on a break below 1.6670. EURGBP – continues to range trade with a cap currently around the 0.8300/10 level. Only a move below the March lows at 0.8205, argues for a move towards the lows this year at 0.8158. The resistance at the 200 day MA at 0.8410 remains a key obstacle to further gains. USDJPY – the next key support remains at the 101.20 area and the March low. A move through 101.20 opens up the 200 day MA at 100.80, a break of which could well see a move towards 98.60. Any recovery now needs to push back through 102.80 to stabilise. 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.