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

UK 100 Index called to open -45pts at 6130, kicking off the new month and quarter on the back foot, returning to the lower half of March’s 6100-6200 sideways channel. The bulls remain hopeful of this representing an extended consolidation before another leg higher. The bears will be looking for a break below 6060 to increase bearish momentum and engineer a bigger retrace from recent 6220 resistance and prolong the long-term 12-month downtrend. Watch levels: Bullish 6155, Bearish 6120.

The negative opening call comes after negative sessions in both the US and Asia despite a surprise jump in Chinese PMI data for the first time in 8 months suggesting Beijing stimulus doing its job, although sceptics point to a seasonal rebound from the Lunar New Year. Weak Japanese Manufacturing data is likely taking its toll on risk appetite along with an oil price struggling around recent lows.

Japan’s Nikkei broken down from March narrowing pattern to underperform regional peers with poor manufacturing sentiment data coupled with some Yen strength hindering exporters. China equities failing to benefit from PMI data with the same true of Australia's ASX which would usually do well on improved China data that has given a small lift to commodity prices.

Yesterday marked the start of water-treading for Wall Street Bourses ahead of today’s US jobs report which could tip the balance in favour of a June rate hike. The Fed’s Evans, a usually dovish FOMC member, suggested we’re still on for 2 hikes this year while adding that one could come mid-way through 2016 and one towards the end. That puts June in the spotlight given April is all but off the cards. So while a good Non-Farms number has potential to strengthen the USD, note that Jobless Claims missed consensus yesterday while Challenger Job Cuts rose 31% YoY, with layoffs spreading beyond the oil & gas sector.

The USD Basket (DX) is just about holding up after bouncing from 15-Oct lows, but looks weak this morning and technicals indicate a potential break down through support around 94.6. This is helping both Gold and oil prices in the short term, though things could change very quickly with today’s US jobs data.

Longer term, we’re seeing Brent and WTI struggling around their March lows ahead of the next ‘OPEC production cut announcement’ (note this is said with tongue firmly in cheek), while Gold is heading up towards the ceiling of a potential bullish falling wedge pattern that could see an eventual continuation of the 2016 uptrend. As always, this is all sensitive to USD strength.

In focus today will be the US Jobs report, even though the Non-Farm Payroll job additions number has potential to buoy markets whatever the outcome. A good number means US recovery. A bad number supports the need for continued accommodative policy and a cautious path for rate hikes just as Fed Chair Yellen confirmed this week. Watch out for European and US PMI Manufacturing reads as well as US ISM and Consumer Confidence.

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

• Debt collection company Arrow Global to buy InVesting B.V.
• Drax sees 2016 profit at top end of forecasts on National Grid deal
• UK house prices rise at fastest pace in a year, Nationwide says
• Argos owner Home Retail Group backs $2 billion Sainsbury's takeover
• Britain's Co – op bank annual loss more than doubles to 610 mln stg
• RSA completes sale of Colombia business
• Elegant Hotels appoints Jones as CFO
• Euromoney sells energy publishing businesses for $18 mln
• Standard Life gets regulatory approval to up stake in India's HDFC Life
• Brexit risks taking multi – trillion euro trading from London
• Aegon Announces Second Tranche of EUR 400 Million Share Buyback Program
• Oil prices fall on stronger dollar, further oversupply worries
• Avanquest sells software publishing activity in England to Maximum Games group