The anticipation of the Doha meeting had been building up for the past week and it seems as though traders were right to be cautious.

1. Weekly Outlook
Monday 18th April with Richard Perry, Market Analyst
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ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such
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invest funds you are prepared to lose entirely. For our full risk warning, please go to the end of this report.
WHEN: Thu, 21st April, 1245BST
LAST: Widespread easing, -0.4% deposit
FORECAST: No change
Impact: The ECB meeting every six weeks is always a
high volatility event, especially with the market so
interested in what Mario Draghi has to say. ECB chief
economist Peter Praet has been talking up the potential
for further cuts to the deposit rate so it will be
interesting to see how Draghi deals with this. It could
though be broadly a bit of a wait and see meeting with
the huge batch of easing measures introduced last
month and the TLTROs yet to be implemented. The
euro is a clear mover during the meeting, but the DAX
is another key market to watch, and yield curves.
Key Economic Events
Date Time Country Indicator Consensus Last
Tue 19th Apr 10:00 Eurozone German ZEW Economic Sentiment +8.0 +4.3
Tue 19th Apr 13:30 US Building Permits / Housing Starts 1.20m / 1.17m 1.17m / 1.18m
Wed 20th Apr 09:30 US Unemployment / Average Weekly Earnings 5.1% / +2.2% 5.1% / +2.2%
Wed 20th Apr 15:30 US EIA Crude Oil Inventories +6.6m
Thu 21st Apr 09:30 UK Retail Sales (ex fuel YoY) +3.8% +4.1%
Thu 21st Apr 12:45 Eurozone ECB monetary policy (plus press conference) No change
Thu 21st Apr 13:30 US Philly Fed manufacturing +8.0 +12.4
Fri 22nd Apr 09:00 Eurozone Flash Manufacturing PMI 51.8 51.4
Fri 22nd Apr 13:30 Canada CPI +1.2% +1.4%
Fri 22nd Apr 15:00 US Flash Manufacturing PMI 52.0 51.4
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1N.B. Please note all times are BST (GMT+1 after the European switch to summer time), data source Reuters
Macro Commentary
Have markets just had another big sell signal? The fallout from a lack of agreement in Doha could be wide reaching
in financial markets. The oil price has rallied from $26/$27 per barrel (depending on whether you are looking at WTI
or Brent Crude) to over $40 in the past 2 months as markets reacted to the prospect of an agreement by many of
the world’s major oil producers to freeze production at January levels. However over the weekend, the crucial
meeting to decide whether this was possible ended without agreement. Do this now mean that this 50% rally on oil
will need to unwind? There has been a continued slowdown in the rig count in the US and production is not as
strong as it was at the beginning of the year, but even of there were to be just a 50% Fibonacci retracement of the
oil rally, the price would be back to around $34. The issue is though the positive correlation that oil has with risk
appetite. Oil is still seen as a signal for global growth. There is a strong correlation still with equities (although this is
not as strong as it has been in recent months, it is still a key issue). Equity markets looked to have been pressuring
to the upside, however there are now serious questions over whether these rallies can be sustained. Furthermore,
riskier currencies (such as the Canadian dollar especially and the Aussie dollar amongst the majors) could take a
hit as safe haven plays such as US Treasuries, the Japanese yen and gold are favoured.
Must Watch for: European Central Bank monetary policy (& press conference)

2. Weekly Outlook
Monday 18th April with Richard Perry, Market Analyst
Foreign Exchange
The recovery in the US dollar was a key theme moving into the end of last week, however it looks as though
this move still seems to be just a near term unwinding of an oversold position. The market looks to be in the
process of still pricing in the prospect that the Fed may only be able to hike rates once this year. The US
economic data is still rather tepid with the Atlanta Fed GDPNow tracker only forecasting perhaps +0.3%
annualised growth in Q1. The first quarter does tend to be a difficult one from a growth perspective, but
Industrial Production again disappointing for March along with Retail Sales also underwhelming, the potential
for the Fed tightening merely on the prospect of solid home economic grounding it still rather questionable.
Furthermore, the positive performance in China trade and growth data last week look to have been formed
largely on the basis of a worrying sharp increase in Yuan New Loans (i.e. debt) to levels which are looking
increasingly concerning from a sustainability front. This may make the doves think twice about jumping over the
fence in the April (highly unlikely) but also the June meeting too. I continue to see the rebounds on the dollar as
a chance for medium term selling opportunities. The conditions that drive yen and euro strength remain broadly
intact, whilst the only major currency that still looks vulnerable against the dollar is the Brexit impacted sterling.
WATCH FOR: Risk appetite to be impacted by the fallout from the Doha meeting for a few days at least,
whilst the ECB meeting will certainly be on the watch list. UK earnings growth will also impact sterling
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2
FX Outlook
USD/JPY
Watch for: The resistance band 110/111 is an
ideal medium term selling opportunity if possible
Outlook: The medium term downside target
from the range breakdown remains 107.15,
whilst the longer term target from the huge head
& shoulders top is 107.00 on a conservative
basis and perhaps as much as 105.20 (which
also happens to be the next key support). The
near term technical rally has been struggling for
traction (especially with this Doha non-
agreement now) and I continue to see technical
rallies as a chance to sell. The ideal selling area
for medium term positions is between 110 and
the latest key breakdown old support turned new
resistance around 111. Momentum indicators are
bearishly configured and also suggest that rallies
will only be short lived.
EUR/USD
Watch for: Looking for medium term buy signals
between $1.1100/$1.1200
Outlook: I remain positive on EUR/USD within
the long term range $1.0455/$1.1465 whilst the
market remains supported above the long term
pivot at $1.1100. Subsequently I see the near
term correction as a chance to buy once more.
The breakdown below $1.1325 implies $1.1200
so the ideal medium term buy zone comes in
between $1.1100/$1.1200. The momentum
indicators are still corrective near term but since
November the euro has not broken a previous
higher key reaction low. This would suggest that
the support at $1.1140 becomes key.

3. Weekly Outlook
Monday 18th April with Richard Perry, Market Analyst
Equity Markets
The fallout for the Doha meeting will put pressure on risk appetite and that tends to be negative for equities. Oil
stocks will be pressured as a direct consequence of a falling oil price but also the knock on impact across the
commodities complex will impact on equities too with mining companies under pressure.
Earnings season in the US has got off to a mixed start, with the sharp disappointment of numbers from Alcoa
tempered by the somewhat surprisingly positive outcome from the first few banks. After JPMorgan Chase
significantly beat expectations with investment bank earnings better than expected, peers Wells Fargo and
Citigroup also pleasantly surprised (although Bank of America was a disappointment). This has allayed initial
fears of a terrible earnings season and perhaps the pessimism could have gone too far. However, the concern
as always is that Wall Street earnings have been guided so far down that beats are almost inevitable. FactSet
had been looking for 9.1% earnings decline across the market in the run up to the Q1 earnings, with little
difference to that number (now around 9.3% expected) after initial announcements. Notable names to watch out
for this week are Morgan Stanley on Monday, Goldman Sachs on Tuesday along with Yahoo, whilst Microsoft is
on Thursday. The major markets had reacted positively in front of Doha, with the S&P 500 continuing to be best
in class, with its recovery now looking to test the Q4 2015 highs at 2103/2116 (the all time high is only at 2133).
WATCH FOR: Markets will react from the Doha meeting early in the week, whilst the ECB meeting will
drive European markets towards the end of the week. Earnings season continues Morgan Stanley and
Goldman Sachs important.
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3
DAX Xetra
Watch for: The rally rolling over again at
resistance is a concern for the bulls
Outlook: An incredible rally of the past week
helped to drive the DAX back to the key
overhead resistance band at 10,122 again but
with the negative open on Monday the move
seems to have stalled. The issue the bulls will be
looking at is whether the RSI momentum again
rolling over around 60 becomes an issue for the
DAX which is technically not as positive as major
markets such as FTSE 100 and S&P 500. The
Fibonacci levels remain relevant and 9897 is
initially supportive. However the prospect of a
range forming between 9500/10,122 is growing.
FTSE 100
Watch for: The old resistance between 6200
and 6237 now supportive the medium term
outlook
Outlook: I have spoken numerous times
recently about the key resistance band between
6200/6237 and the continued failing of the RSI
around 60. However these two conditions were
broken decisively last week and the bulls look far
better positioned now. The breakout opens the
key resistance at 6487 and although there may
be an unwinding move first in the wake of Doha,
the old resistance between 6200/6237 now
becomes the basis of support. The RSI moving
above 60 was the highest (and most positive)
level achieved since the all time high was hit a
year ago and suggests the bulls are ready to
continue the recovery.
Index Outlook

4. Weekly Outlook
Monday 18th April with Richard Perry, Market Analyst
Other Assets: Commodities & Bonds
Gold has seems to have settled into something of a range play in recent weeks, with the price apparently
underpinned around $1190/$1208 but yet is unable to maintain traction around $1260/$1282. This comes
amidst a much less hawkish Fed being factored in (a continuation of a negative real interest rate environment is
supportive for gold). The disappointment of the lack of agreement at the Doha meeting has put the oil price
under pressure today and it will be interesting to see if this becomes a new trend of correction. With no freeze in
production, the big rally that has driven oil prices from the floor of $26/$27 needs to be re-assessed for its
viability.
Treasury yields may have managed to squeeze out some upside last week, but the yields are still well off their
March rebound highs and these moves simply look to be unwinding before another shift lower. The move has
come as the US dollar has also unwound from oversold and if Treasury yields fall away again the prospects for
the dollar also do not look especially great. The Doha meeting has driven a flight into safer havens and this has
meant that bond yields have rolled over once more and if this continues, they could put pressure on the April
lows once more.
WATCH FOR: The reassessment of risk appetite following the Doha meeting will be the driver of bonds
and commodities this week. Eurozone sovereign debt will also react to the ECB meeting.
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4
Gold
Watch for: The medium term outlook remains
choppy for the coming weeks
Outlook: Gold looks to be trading in a broad
range between the support at $1190/$1208 and
the resistance up between$1260/$1282. Within
this the momentum indicators are beginning to
take on far more neutral configuration, consistent
with a range play, with the RSI between 40/60,
the MACD lines benign around the zero line and
the Stochastics again turning lower below
extreme levels. This would suggest that the near
term decline is likely to again look to form
support from which near term trading buys could
be seen. The lack of trend suggests a short term
time horizon in positions would be beneficial.
Markets Outlook
Brent Crude oil
Watch for: Trend channel formation with
support between $36/$37.40 being strong now
Outlook: The sharp correction on oil is seeing
the price fall once more, however, for now the
move is still within the uptrend channel on Brent
Crude that currently shows the lows of around
$38.50. However, near term indicators have
turned corrective too with a sell signal set to be
confirmed on the Stochastics and this could
drive momentum lower and the bulls may need
to defend the key April reaction low at $37.25.
This level now becomes the key medium term
trigger for the sentiment on oil as a breach would
be a significant technical breakdown. The
resistance now in place at $44.95 now becomes
key.

5. Weekly Outlook
Monday 18th April with Richard Perry, Market Analyst
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5
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