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

UK 100 Index called to open -30pts at 6170, back from the 6220 highs of Friday but still in an uptrend for March with a bounce off 6160 this morning. This maintains the rebound from mid-February’s 2016 lows and holds the breakout beyond 9-month falling highs at 6130. Sideways since Wednesday’s highs, increases the chance it having been consolidation before further upside towards 6400. Watch levels: Bullish 6185, Bearish 6145.

The negative opening call comes as Asian markets make it a mixed start to the new week in spite of Friday’s positive US close following a mixed US jobs report (jobs strong but pay weak) which supported the case for economic recovery but not necessarily another Fed rate hike. Investors already looking towards a monetary policy update from the European Central Bank (ECB) on Thursday which is seen taking rates further into negative territory whilst simultaneously being reassured by an oil price which continues to climb.

Over the weekend an optimistic Chinese GDP growth target (6.5 to 7.0%) from the National People’s Congress has served to nurture bullishness about an emerging market and commodity sector recovery with hopes raised of more stimulus. Note, however,  renewed Yen strength hindering Japanese stocks out of the blocks. Equities in Australia outperforming on a combination of China optimism and rising commodity prices.

US bourses benefitted from non-farm payrolls (NFP) coming in with a good beat, while seemingly ignoring a fall in average hourly earnings - that probably seen as a black swan in the sense that the labour participation rate actually broke out strongly from of a 4yr downtrend in early 2016. The Fed’s Kaplan spoke in bullish tones regarding the US economy, indicating he’s expecting a year of ‘solid’ growth and not a recession.

Together with the S&P500 closing north of its 100-day MA for the first time in 2016 (joining the UK 100 ), this all paints a nice picture on Monday morning. Note, with the focus returning to Europe, the potential for further risk asset strength in the run up to what’s more likely to be reassuring rhetoric from Mario Draghi and more negative interest rates rather than a ramping-up of Eurozone QE.

In focus today, on the data front, will be Eurozone Sentix Investor Confidence seen improving in March, while US Labour Market Conditions will be looked to for additional clues after Friday’s mixed US jobs report. The Eurozone Finance Ministers monthly meeting in Brussels will discuss the troubled negotiations between Greece and its lenders about reforms. Note the Fed’s Fischer and Brainard speaking after the European close.

The baker Hughes rig count added to Friday’s pleasing US data flow, posting an 11th straight decline to levels not seen since 2009. Such a reading finally gives us something that could be called a fundamental basis for the rise in oil prices, although note US shale producers ready to switch on their fracking rigs at around $40 crude.

Gold is still supported at March rising lows (ETF demand and short covering helping) with technicals indicative of a return to Friday’s highs if that continues, but note recent demand could be late to the party, especially with markets expectant of dovish ECB chat this week.

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

• Metro Bank shares to trade conditionally from March 7
• London copper slips from four – month high as traders take profit
• Fastjet expects 2016 results to be materially below market expectations
• Old Mutual says considering all options for strategic review
• AstraZeneca says influenza A treatment is fast – tracked in U.S.
• GSK says Advair had safety profile comparable to fluticasone propionate in study
• Oil jumps as sentiment turns bullish, but analysts warn of false rally
• Xtract Resources – Update on Manica Gold Project