An eighth successive week of gains and another record high on Friday for the S&P500 there appears to be no stopping US markets, as they continue their relentless advance, in the process posting yet another monthly gain. So far in 2013 this particular US benchmark index has only posted two negative months, which on the law of averages would seem to suggest that we should be due a negative one. The only problem is looking for the catalyst that could precipitate a sell-off given the markets apparent indifference to any form of negative news over the last few weeks. That said as we head into the final month of 2013 we do have a rather busy week on the macroeconomic front with a number of central bank meetings as well as the latest US employment reports from ADP culminating in the November non-farm payrolls report on Friday. While expectations that the US Federal Reserve might be minded to pare back their asset purchase program has been rising in recent days, the probability that they might act in just over two weeks time still remains an outlier scenario. The odds on this might shift markedly this week if we get a particularly good employment report in the region of 250k, but before that we also have the small matter of the latest ADP employment report on Wednesday which is expected to show an improvement on the disappointing October number, while today we have the latest ISM manufacturing report for November, which is expected to decline from the 56.4 in October to 55.2. US Q3 GDP is also expected to get revised higher to 3.1% from 2.8%. Asian markets have started the week on a fairly negative footing despite Chinese manufacturing PMI coming in slightly better than expected over the weekend. The official measure for November slightly beat expectations, coming in at 51.4, while the HSBC measure came in at 50.8. It is also a big week for Europe this week with a whole host of economic data this week and latest ECB rate meeting on Thursday, and while economic data has continued to disappoint it would be a surprise to see any further action this year by ECB President Draghi and his cohorts, after last month’s rate cut. While some ratings agencies have started to revise their view of peripheral economies to a more stable outlook, the core economies appear to be moving in the opposite direction, with the upgrades of Spain and Greece last week and the downgrade of the Netherlands. I’m not sure this is what EU leaders had in mind when they were looking at economic convergence. We saw last week that hopes that German consumers might start loosening their purse strings were somewhat misplaced despite rising consumer confidence across Europe’s biggest economy after October retail sales slumped 0.8%, showing that confidence is one thing, but actually spending money quite another thing entirely. Today’s final PMI numbers for November are expected to confirm the fragility of the so-called recovery in the euro area, as well as the continued divergence of the French and German economies. France manufacturing PMI is expected to be confirmed at 47.8, while the German measure is expected to be confirmed at 52.5, and just to add salt into the wound, both Italian and Spanish manufacturing PMI’s are expected to come in at 51.4 and 51.3 respectively. It’s also set to be a big week for the UK with the latest manufacturing, construction and services PMI numbers for November, as well as the Chancellor’s Autumn Statement, where he is expected to paint a much rosier picture than he was able to just over a year ago. This time we can expect the (OBR) Office of Budget Responsibility to upgrade its growth forecasts for this year and next, as well as updating its borrowing projections. We can also expect the Chancellor to come under pressure to reduce the tax burden on small businesses in order to maintain the traction of the current rebound in economic activity. As far as today is concerned the latest November manufacturing PMI number is expected to maintain the resilience of the October number of 56, coming in at 56.5, and raising expectations that Q4 will see a continued rebound in economic activity along the lines of that seen in Q3. EURUSD – we still need to get above 1.3650 to argue for a move towards long term trend line from the all-time highs at 1.6040 which comes in at 1.3950. Any pullbacks need to stay above the 1.3480 area for the current positive momentum to continue. Only a break below the 1.3480 level would then argue for a move to the lows last week at 1.3400, and then below that 1.3300. GBPUSD – last week the pound made its highest levels this year at 1.6384 and looks set to push even higher towards 1.6500. This remains the most likely outcome while above support at 1.6250. Pivot support remains at 1.6110, a break of which argues for a move back to the multi week support at 1.5880/90. EURGBP – having pushed below the previous lows at 0.8305 the main target remains at towards 0.8280, the 50% retracement of the entire up move from the 2012 lows and the high this year. A move below 0.8280 has the potential to target 0.8170 the 61.8% level. Only back above the highs last week near the 0.8400 level would suggest the risk of a larger squeeze higher. USDJPY – the highs this year at 103.75 remain the principal objective, and main obstacle to a move to 105.00. Any pullbacks could well find support at the 100.60 level, and if we were to break below the 99.20 level we could see a deeper fall towards 98.50. 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.