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

UK 100 Index called to open +10pts at 6365, holding on to the gains it posted yesterday following the bounce off a 2-week trendline of rising support that maintains the Feb uptrend. The overnight sideways shift 6340-6360 may merely have been a pause before another up leg towards December highs of 6450.  The bears will likely need a breach of 6300 to develop a retrace of any interest. Watch levels: Bullish 6385, Bearish 6335.

The positive European opening call comes after Asian bourses took a positive lead from a solid stateside finish (Dow Jones back >18,000, 9-month highs) amid the post-Doha Crude oil price rebound to $40 and despite mixed Q1 results (Morgan Stanley, Netflix, IBM) amid a tough earnings season. Note Japan’s Nikkei outperforming (+3%) on a weaker Yen giving a much-needed fillip to exporters after the finance minister suggested intervention to counter excessive currency moves.

Overnight, the Reserve Bank of Australia (RBA) governor Stevens said he was in no hurry to cut interest rates despite a strengthening Aussie dollar and a revised observation that policy was already ‘very’ accommodative leading some to suggest a 2% floor for rates ahead of a July 2 election. The higher oil price is boosting the index’s Energy constituents as is a surge in consumer confidence.

US bourses reversed yesterday’s early weakness to make fresh YTD highs - the Dow in particular managing to bed in above the psyche level 18,000. This mirrored oil’s performance as crude prices themselves showed alarming resilience in the face of a failed Doha production meeting. Note however that a 3rd day of strike action by oil workers in Kuwait could well be supporting things for the moment.

We heard from a couple of Fed speakers, both doves yet one more dovish than the other. Rosengren repeated his ‘pessimism’ mantra, suggesting policy is too easy and should be tightened more aggressively lest full employment be reached in the US - you read right, but full employment can lead to runaway inflation, which would mean even more aggressive action required to bring things back to optimum levels. Kashkari had another take, saying we’re actually in uncharted waters and as such should be walking cautiously, a la Janet Yellen.

Corporates-wise, IBM pleased markets after the close by posting not-as-bad-as-expected Q1 results in what is set to become somewhat of a ‘clearing a low bar with ease’ theme this earnings season. Netflix reported earnings that beat, but the revenues missed and management gave lower-than-expected guidance for second quarter subscriber growth.

Crude oil’s rebalancing act could now be pushed back to 2018 with Doha a stark indication that OPEC can no longer be relied upon by the wider market to ‘do the right thing’ in using its clout to control the oil price. There are serious cracks appearing in OPEC’s unity this week which suggests a more aggressive battle for market share between the world’s biggest players could ensue.

Gold didn’t get a chance to catch those risk-off tailwinds yesterday, since they were somewhat short lived. Do note, however, that this strike in Kuwait is likely supporting oil prices (daily output -60%), which could in turn be buoying risk sentiment and thus equity markets this morning.

In focus today we have the German ZEW Surveys seen improving marginally in April while US Housing Starts and Building Permits are seen largely flat in March. Speakers include BoE Governor Carney mid-afternoon (anything on Brexit?). Listen out for results from Goldman Sachs. Can it take the positive tally of US bank results to six out of six?

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

• Credit checker Experian to buy CSIdentity for $360 mln
• Meggitt sticks to annual guidance, says cost cutting on track
• MHP Q1 poultry sales of 117,716 tonnes, up 4 pct YR/YR
• Zoopla to acquire Property Software Group
• AB Foods maintains full – year guidance after first – half growth
• Ashmore posts third quarter asset boost, still sees outflows
• Australia shares rally on commodities, NZ hits yet another record high
• McCarthy & Stone Posts Small Fall in 1H16 Pretax Profit; Backs FY Guidance
• Saga Posts FY16 Earnings Growth; Ups Proposed Dividend Payout
• Telecom Plus Sees FY Adjusted Profit in Line With Views