European markets endured a rather turbulent week last week buffeted by rising bond yields as well as increasing concerns about a messy outcome in respect to events in Greece, after the Greek government held back on a loan repayment they initially promised to make, instead choosing to delay the payment until later in the month, along with a number of others. As a result equity markets across Europe closed lower for the second week in succession, and close to three month lows. A surprisingly strident speech from Greek Prime Minister Alexis Tsipras to the Greek parliament late on Friday, in which he accused EU creditors of “absurd” behaviour with respect to the recent new proposals put forward with the help of the EU Commission on the part of the institutions, has once again highlighted the extent of the chasm between the two sides. The contents of Friday’s speech were all the more surprising given that of all the parties it is widely perceived that EU Commission President Juncker is probably the most sympathetic to Greece’s position. It is therefore probably not the wisest course of action to diminish the contribution of someone who could be and has been an advocate for some softening of certain reforms. It does seem that PM Tsipras is getting closer to the point of becoming boxed in by some in his party who are not prepared to countenance any form of acquiescence to creditor’s demands, which could make it almost impossible to get any agreement through the Greek parliament, even if he were able to reach a compromise with the creditors. Equity markets were also a little unsettled by a better than expected US jobs number for May, which came in well above market expectations at 280k, and was in stark contrast to a lot of last week’s other US data. Given the recent dovish tone from a number of Fed policymakers last week, about the timing of a rise in US rates, the better number once again refocussed attention on the timing of a possible Fed rate rise, with the potential for a move in September, moving back up the agenda. While Friday’s data was a promising report, it is still only one report, and doesn’t disguise the fact that there are still significant areas of the US economy that continue to be a cause for concern, including certain parts of the manufacturing sector, the US consumer, and weak inflation. Friday’s jobs report also doesn’t change the fact that last week saw the OECD and IMF both downgrade the outlook for both the US and Chinese economies for 2015 quite significantly, and this morning’s Chinese Trade numbers for May merely serve to highlight those concerns. The latest May import and export data for the Chinese economy make for worrying reading, following on from the weak readings seen in March and April, with imports in particular a significant concern. Exports showed a decline of 2.4%, better than April’s 6.4% decline and slightly better than expected, but imports slid even more than expected, by 17.6%, even more than in April. This sharp slide increases concern that Chinese authorities face an uphill struggle to meet their 7% GDP target, an furthermore point to a Chinese economy where domestic demand appears to be sliding sharply. Imports have slid for six months in a row and suggest that despite recent easing measures by Chinese authorities and the continued buoyancy of Chinese equity markets, that all is not well with the Chinese economy. It also means that we can probably expect further easing measures further down the line. With a host of other data due later this week, it would appear today’s disappointing data could well point to further trouble for the Chinese economy when industrial production and retail sales data is released tomorrow. EURUSD – Fridays fall found support at the 1.1050 area and this needs to hold for the topside to remain intact. We need to get back above the 1.1220 area to open up another run at last week’s high at 1.1380, and the May highs at 1.1480. GBPUSD – as long as we can hold above the 50 and 100 day MA’s between 1.5170 and 1.5190 and while we do so the uptrend from the recent lows remains intact. Below 1.5170 argues for a return to 1.5000. EURGBP – having reached the 0.7380 level last week we’ve seen a pullback, falling below the 0.7300 area. We need to push back above the 0.7300 level otherwise we could well see a move towards the 0.7230 level. USDJPY – another multiyear high at 125.85 last week has seen the US dollar continue its rise with the next target at 126.85. the previous peaks at 125.00 should now act as support with only a move below 123.60 arguing for a steeper move towards 122.00. 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.