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

UK 100 Index called to open -20pts at 6170, back testing 9-month falling highs and the 200-day moving average. The bears see potential for a retrace, which may concern those bulls hoping to see 6450 again, although we remain in an uptrend from mid-February and a sideways channel from early March. Breakout or breakdown in this shortened Easter week? Watch levels: Bullish 6180, Bearish 6150.

The negative opening call comes after a mixed start to the week for Asian markets as oil retreats from multi-month highs to hurt energy-focused stocks. This amid USD strengthening from recent Fed-inspired lows, making dollar-denominated commodities more expensive, coupled with a surprise rise in US rig numbers. While Gold, Silver, Copper, Nickel and Zinc all drop back, however, note Iron ore at fresh highs.

Chinese equities at 2-month highs on plans to loosen margin lending/trading curbs, helping brokerages and financials and offsetting weekend comments from the People’s Bank of China (PBOC) governor who warned about the nation’s high level of corporate debt and risks that zombie companies pose to the slowing and transitioning economy. A flat MNI Business Indicator print is also  helping, even if the macro indicator remains just below the 50 level separating growth from contraction.

Australia's ASX held back by weakness in the commodities space while Japanese bourses are closed for the vernal equinox public holiday. After a largely positive close for European and US stocks last week, markets are shrugging off the Dow Jones and S&P Indices regaining positive territory for 2016, and the UK Index only just lagging.

US bourses closed higher on Friday, though note energy and materials stocks limiting gains with commodities under pressure from a still-resilient USD. This comes even as the Fed takes a more dovish stance with respect to monetary policy, citing global economic concerns. Things seem OK closer to home though, with St Louis Fed President Bullard saying he thinks both the US labour market (unemployment currently 4.9%) and headline inflation (1% in Feb) are nearly where they need to be for some normalisation to take place.

In focus today we have UK CBI Orders and Prices which will be eyed for improvement from February’s negative reads. In the afternoon, watch out for the US Chicago Fed National Activity Index especially after the surprise jump back to growth for the Philadelphia Fed last week. US Existing Home Sales may have slowed a little in Feb and Eurozone Confidence will be of interest after the ECB bazooka and continued migration debate. Note Fed speakers Lacker and Lockhart bookending the European trading day.

US Crude prices are showing weakness this morning having sold back from Friday’s production-freeze-hope highs after the US Baker Hughes rig count went up by one. This indicates market concerns are resurfacing about global oversupply, with the resilient US shale industry the swing producer. USD off lows also adding pressure.

Gold has broken through key weekend support $1250. It’s now given up about half of the gains it made post-Fed meeting, completing Friday’s bearish head & shoulders reversal pattern. Support looks to be in the region of $1237 and $1225 as the yellow metal heads sideways in a circa $50 range.

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

• UK's Synthomer to buy US adhesives & coatings firm for $226 mln
• Epistem Holdings – Funding award from US Department of Defense
• Mondi says not affected by EU Competition Commission inspection at its premises
• JKX Oil & Gas says FY revenue down 39 pct
• Centamin says FY pretax profit down 28 pct
• Pets at Home says Ian Kellett to succeed Nick Wood as CEO
• Petroneft Resources reaches deal with Oil India for 2016/17 work programme
• BP strikes deal for China's biggest carbon permit buyback contract