Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 called to open +13pts at 7086 having spent the majority of last week in a sideways trading channel with upper and lower bounds just north of 7100 and just south of 7000 respectively. A flurry of futures trading activity this morning is allowing the index to test resistance 7100 with Bulls seeing a breakout past 7110 and Bears a pullback to support 7030 and beyond.

The essentially flat open comes as Asia trade experiences a quiet Monday ahead of imminent monetary policy meetings in the US (the FOMC on Wednesday) and Japan (BoJ policy meeting Thursday). In the Eurozone, the phrase ‘Plan B’ has begun to be used by those taking part in Greek bailout negotiations, indicating a growing sense of hopelessness in that camp. Elsewhere, the ECB QE program is forecast to go the distance and end abruptly in Autumn 2016, with the possibility for a smoother slowdown if inflation levels hit their target 2% before then.

US markets had varying degrees of success on Friday with the Dow, S&P and NASDAQ all posting sub 1% gains (the latter two making new all-time highs in the process) following healthy earnings reports from US tech companies and disappointing macro data that narrowed the chances of an early Fed rate hike. Low interest rates mean more spending power for businesses and individuals since money is cheap to borrow.

Asian bourses followed Wall St’s cues on Monday – the Hang Seng gained 1.1%, Shanghai Composite added 1.6% and the Aussie ASX climbed 0.8%. Japan’s Nikkei was flat.

In focus today we have CBI business optimism from the UK while this afternoon sees the ECB announce its progress on Eurozone QE and the US releases its PMI data. The US will be one to watch in particular after last week’s poor prints.

US Light crude ($57) is seeing rising lows and falling highs converge Monday. Meanwhile, Brent ($65) is heading into the apex of its own pennant pattern this morning with any breakout likely to mirror a similar move by its US counterpart. Will they break up or down? Note both benchmarks remain in an April uptrend yet both are off their 2015 highs hit mid-month.

Gold ($1180) recovered from 5-year lows over the weekend but remains very much in a downwards trending channel and trading nicely either side of its 200-day moving average. Now miles below $1200 – will a pullback in the US dollar index help the yellow metal this week? A little uncertainty ahead of the FOMC meeting did bolster safe haven demand, however whether or not that will be sufficient to see a revisit of $1200 remains in itself uncertain.

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Key Overnight Macro Data: (Source: Reuters/DJ Newswires)

• China                     Industrial Profits (YoY)      Improved (Less Negative)

See Live Macro Calendar for full data line-up, incl. consensus expectations

UK Company Headlines: (Source: Reuters/DJ Newswires)

• Playtech says Q1 revenue up 31%
• Diageo to consider its position on United Spirits chairman Vijay Mallya
• Great Portland JV sells West End building for £222.4mn
• Tullow Oil says work on TEN oil field continues
• Ranger Direct Lending vaued at £135mn after placing
• CRH finance chief to take global group transformation role
• Centrica trades in line after cold weather boosts energy demand
• Steve Wadey starts as new Qinetiq CEO
• VPC Specialty Lending Investments makes investments in three lending platforms
• RBS sells further North American loan portfolio to Mizuho
• Petroceltic enters rig contract with Groupement and Sinopec
• British mobile operator EE on track for 14 million 4G customers
• K&C Reit intends to raise £6mn via listing on London's AIM