Could this be the week that the Federal Reserve finally takes the bull by the horns and raises interest rates? In one word, “no”. Firstly, on purely a logistical issue, there is no press conference due to follow this month’s FOMC meeting. A first change in the interest rates of the world most powerful economy in 6 years will be enormous for financial markets.

1. Weekly Outlook
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therefore only speculate with money you can afford to lose. FX and CFD trading are not suitable for everyone. Please
ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such
transactions. You should first carefully consider your investment objectives, level of experience, and risk appetite and
only invest funds you are prepared to lose entirely. For our full risk warning, please go to the end of this report
27th July 2015 by Richard Perry, Market Analyst
Macro Commentary
Could this be the week that the Federal Reserve finally takes the bull by the horns and raises interest rates? In one word,
“no”. Firstly, on purely a logistical issue, there is no press conference due to follow this month’s FOMC meeting. A first
change in the interest rates of the world most powerful economy in 6 years will be enormous for financial markets.
Journalists and market participants around the world will want to know exactly how and why it has decided to make its
move. Aside from the simple FOMC statement, there will be no formal explanation of a rate hike available. Furthermore,
the latest set of economic forecasts and “dot plots” (in June) were actually a touch more dovish if anything. It is likely
that the committee will look to wait for the next round of economic forecasts before making such a momentous decision,
and that comes in September. Then there is the small matter of the committee members. With a unanimous decision to
hold rates steady at last meeting, the committee is made up of naturally dovish leaning voting members in 2015, led of
course by Janet Yellen who is herself habitually dovish having a casting vote. The market for Fed Funds futures is pricing
in a 0% chance of a hike, which is rather telling. Personally I am still on for December (which is priced at 55% currently).
.
WHEN: Wed, 27th July, 1900BST
LAST: 0.25%
FORECAST: 0.25%
Impact: Traders are increasingly obsessed with
the timing of the first rate hike. In the bigger
picture the pace of tightening is more important
that when the first hike is, but that will not stop a
significant amount of volatility happening when
the Fed does make a move. Without a press
conference, July is just that little bit too early still,
however in her recent Congressional testimonies
Janet Yellen was guiding strongly towards a 2015
hike. A change to the statement could set up the
market for a hike in September and if so would
drive a stronger dollar, putting more pressure on
commodities, dragging Treasury yields higher.
Must watch for: FOMC monetary policy
Key Economic Releases
Date Time Country Indicator Consensus Last
Tue 28th Jul 09:30 UK GDP (Q2 prelim QoQ) +0.7% +0.3%
Tue 28th Jul 15:00 US Consumer Confidence 100.0 101.4
Wed 29th Jul 15:00 US Pending Home Sales 0-0-9 0-0-9
Wed 29th Jul 15:30 US Crude Oil Inventories 5.40m 5.35m
Wed 29th Jul 19:00 US FOMC monetary policy 0.25% 0.25%
Thu 30th Jul 13:30 US GDP (Q2 Advance annualised) +2.6% -0.2%
Fri 31st Jul 00:30 Japan CPI 0.0% +0.5%
Fri 31st Jul 10:00 Eurozone CPI (flash) +0.2% +0.2%
Fri 31st Jul 13:30 Canada GDP 0.0% -0.1%
Fri 31st Jul 15:00 US University of Michigan Consumer Sentiment 94.0 03.3
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1
10 year US Treasury yield
N.B. Please note all times are BST (GMT+1), data source Reuters

2. Weekly Outlook
27th July 2015
by Richard Perry, Market Analyst
Foreign Exchange
Implied volatility on forex pairs are well down from the levels seen during the Greek crisis, and now we are I the midst of
what should be the US dollar driving proceedings. A series of rate cuts from central banks such as the Bank of Canada and
the Reserve Bank of New Zealand have helped to drive a stronger dollar with the trade weighted dollar up at its highest
level since April. The commodity currencies (Aussie, Kiwi and Canadian Loonie) are feeling the significant strain as gold,
oil and base metals come under huge pressure. There are multi-year lows on each of the currencies now. All eyes will be
on the Fed this week though with the next opportunity for a possible rate hike (there are just four chances left this year).
The dollar will be subsequently be the driving for behind major pairs this week. US Consumer Confidence and a first look
at Q2 growth data will play a supporting role, but the outcome of the FOC meeting on Wednesday is likely to be the
guiding force for several days. A hawkish meeting could mean that pressure comes back on key levels such as $1.0820 on
EUR/USD, $1.5330 on Cable and perhaps even a multi year high above 125.85 on Dollar/Yen.
WATCH FOR: Dollar traders will watch Consumer Confidence and Pending homes prior to the big FOMC
announcement, and not forgetting Q2 Advance GDP on Thursday. Sterling traders will focus on preliminary
Q2 GDP on Tuesday, whilst the euro could be supported if flash Eurozone CPI picks up on Friday.
EUR/USD
Watch for: The $1.1050 pivot level is back in
play as rallies still look a chance to sell
Outlook: A sequence of lower highs and
lower lows remains a near to medium term
bearish pull. Momentum suggest that rallies
are a chance to sell and I expect further
downside pressure for a test of the support
at $1.0820 in due course. Once again we see
the $1.1050 pivot level being tested and I am
still treating this as something of a
watershed. Key near term resistance is at
$1.1215. The FOMC will be a significant
impact and could induce some consolidation
in front but huge volatility after.
GBP/USD
Watch for: Volatility around economic data
to continue with support at $1.5330
Outlook: The near term range looks to have
been reversing to the downside with a
bearish key reversal, however momentum
indicators continue to suggest choppy
trading conditions near term and a lack of
trend through the chart. The market appears
uncertain as to how to play the policy of the
respective central banks. There could be
more of an idea with the FOMC this week
but there will also be a lot of volatility
surrounding the data. Perhaps a series of US
positive data surprises will help to drag
Cable lower (there is a slightly negative bias)
to test the support at $1.5330.
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FX Outlook
2

3. Weekly Outlook
27th July 2015
by Richard Perry, Market Analyst
Indices
It has been something of a game of two halves so far for US earnings season. The early positivity driven through a series
of earnings beats from the banks has been forgotten for now as a number of tech giants (Apple, Microsoft and IBM) and
industrials (such as 3M and Caterpillar) have disappointed the market. Aside for a whole swathe of corporate earnings
that continue this week there is also batch of US and the FOMC which could mean we are a few steps closer to knowing
when the first rate hike might be. It will be interesting to see how equity markets react with corporate growth hardly
shooting the lights out but the FOMC on the brink of tightening. Latterly there have been concerns over investor
positioning with risk appetite taking a bit of a nose dive in recent days amid the implications of the sell-off in
commodities which is potentially deflationary. Markets with less exposure to commodity plays are therefore better
placed, which is why the FTSE 100 is a prime candidate to underperform, being around a quarter weighted in mining and
oil. With Greece now on the backburner this should leave the DAX and CAC open for further QE driven gains. They will
not be immune to market fluctuations, but the options volatility index on the DAX is back towards its lows again which
are conditions usually set up for the DAX pushing higher (ie. on a negative correlation).
WATCH FOR: US earnings season will continue to impact on sentiment but focus will be squarely on the
FOMC meeting on Wednesday.
DAX Xetra
Watch for: A test of the 38.2% Fib level will
be key this week
Outlook: A correction has hit the DAX in the
past few days as trading sentiment has been
impacted by the slide in commodity prices.
The Fibonacci retracements of the bull run
of 9216/12389 from December to April have
been playing a key role as turning points in
recent weeks and could once more play a
key role again. The next key level is 38.2%
which is at 11,177, but if this level fails and
the bears really get going then there could
be 50% at 10,802. The 23.6% level at 11,640
is resistance.
FTSE 100
Watch for: The selling pressure to continue
to drag on FTSE 100
Outlook: The chart of the FTSE 100 could be
mistaken for the profile of one of the
mountain stages on the Tour de France, such
is the ups and downs. The latest move is
lower once more, having fallen for the past
four days. This means that the bears are
back in control once more and the risk rally
following the “aGreekment” is fast
becoming a distant memory. Losing the
support at 6700 was a key blow and with
momentum indicators in reverse now
further downside can be expected this
week. If the rout in commodities continues
then we can expect a retest of the 6430 low.
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INDEX Outlook
3

4. Weekly Outlook
27th July 2015
by Richard Perry, Market Analyst
Other Assets: Commodities & Bonds
Commodity prices remain under huge medium term pressure. The selling pressure has been sustained now for several
weeks but the outlook is becoming increasingly bearish with some critical levels being breached in recent days. The gold
price hit multi year lows after the disappointment of China’s lack of accumulation in recent years. In fact China is a bit of a
theme for commodities as the flash Manufacturing PMI on Friday fell to its lowest level in 15 months. Base metals are
under continued pressure whilst the question marks over global demand have impacted across the oil price which is in
bear market territory (over 20% off the highs) once again for both Brent Crude and NYMEX.
Sovereign bond yields are falling away again, with a couple of factors at play. The Eurozone markets are settling down
again as Greece is no longer on the critical lost, meaning that traders can concentrate once more on ECB QE purchases
being the big market player. Despite hawkish hints from FOMC members recently, Treasury yields are falling (along with
UK Gilt yields). The market concerns over commodity prices and corporate earnings are overriding rate tightening fears.
WATCH FOR: US economic data floods the economic calendar this week with the FOMC sure to dominate
trading sentiment in both commodities and US Treasury yields.
Gold
Watch for: Rallies to be sold into and
further weakness towards the 2010 low
Outlook: The confirmation of the huge
flash crash has come with a whole week
of the gold price trading well clear of the
old $1131 support which now becomes
the new key resistance. The medium term
implication of the he breach now opens
additional weakness for a test of the 2010
low at $1043. Although there has been a
slight rebound already and I do have a
concern that there may be a snap back
rally at some stage but would still see any
rebound as something that will be sold
into especially while trading below $1131.
Brent Crude
Watch for: A test of the key March low at
$52.50 looks on the cards
Outlook: Both oil prices have been falling
away in recent days but it was not until
Friday where Brent Crude finally breached
its July low and confirmed the bears are in
control once more. The move below $55 has
now re-opened the key March low at $52.50
which is the final key support that is
preventing a full retracement back towards
the critical January low at $45.20. Technical
indicators are increasingly bearish and the
concern is that there is still plenty of
downside potential. Selling into rallies is the
way to play oil now, with the key resistance
overhead at $59.65.
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COMMODITIES & BONDS Outlook
4

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Weekly Outlook
27th July 2015
by Richard Perry, Market Analyst