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

UK 100 called to open -50pts at 6115, having fallen sharply overnight from 6150 to find support at 6100 intersecting falling support dating from April 21 highs. The Bulls are hoping a minor bounce to 6115 has legs to retrace declines from recent 6200 highs. The Bears are eyeing any further test of 6100 given the retrace potential to 2-month lows 6060. The range traders are content to remain in the 6060-6200 range while more patient Bulls and Bears await triple-bottom or triple-top breaks at 6220 or 6050, respectively. Watch levels: Bullish 6120, Bearish 6095.

The negative opening call comes as Asian bourses struggle under the weight of a mixed US close impacted by updated expectations that June may in fact be a 'live' meeting for the Fed in terms of a rate hike albeit, as usual, still dependent on improving data. The resulting stronger USD has hurt the commodities space, and most notably seen oil pull back from its assault on $50. Note sentiment also hampered by the overnight disappearance of an Egyptian aircraft over the Med.

Japan's Nikkei at breakeven thanks to a rebound in Machine Orders offsetting Yen strength derived from safehaven seeking. Australia's ASX underperforming on account of the strong USD denting commodities space (notably oil) as well as questions regarding the quality of jobs being added to improve unemployment data.

To elaborate on our Fed thinking; 1) Every meeting is ‘live’. 2) The minutes are 3 weeks old and we have had some mixed data since. 3) The UK referendum (a week after the Fed next meets) was for the first time explicitly mentioned as an influential factor.

So, June may indeed be a ‘live’ meeting, but we remain of the opinion that it ain’t gonna happen. For more, see what we wrote yesterday for Hot Commodity ahead of the latest minutes, which just add to recent mixed Fed commentary, all part of the regular effort to rein in complacency about lower rates for longer which markets desire to support their appetite for risk.

US bourses ended the day flat after a hawkish set of Fed minutes which, although they were just the minutes from the April meeting and thus old news, served to keep potentially ‘over-pessimistic’ (or is is ‘over-optimistic’?) markets in check. While a June rate hike is on the cards, opinion remains split as to whether there will be enough US data between now and then to make a strong enough case for action.

Crude prices are now well off their recent highs, jeopardising chances of a break back above $50 after US inventories increased unexpectedly and the USD strengthened on above mentioned Fed rate hike chatter. Profit taking will no doubt have played a part also, with oil’s impressive upmove through the second half of May making 6-month highs this week. Gold has understandably suffered at the hands of the USD - that seeing the yellow metal retreat to April rising support. Note technicals are now oversold.

In focus today will be UK Retail Sales seen rebounding in April although Brexit risk could yet impede growth as decisions are postponed amid uncertainty as to the outcome. Thereafter markets will surely be watchful of every piece of US data for signals that things might be improving enough for the Fed to pull the trigger next month. The Chicago Fed National Activity Index is seen improving but remaining negative while the Philly Fed could rebound to positive as the US Leading Index growth accelerates. How will Chicago and Philly compare to the Empire State reading that cratered on Monday?

Away from data we have the G7 meeting of finance ministers and Central Bank Governors which kicks off today before we get what is sure to be a highly contrasting set of minutes from the European Central Bank (ECB) in terms of growth and inflation before the Fed's Fisher and Dudley speak mid-afternoon to surely contribute to market volatility attached to US rate rise expectations.

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

• Grainger expects FY profit ahead of expectations
• Mothercare full – year profit jumps on turnaround plan
• Cineworld says revenue up 9.8 pct in 19 week period ended May 12
• National Grid posts higher pretax profit
• Dairy Crest says FY revenue down 5.8 pc
• Pittards names new chief financial officer
• Informa says board remains confident of meeting FY outlook
• Bloomsbury Publishing says FY pretax profit rises 8 pct
• Royal Mail says outlook for UK letter, parcel market unchanged
• Thomas Cook summer bookings down 5 percent on Turkey slump
• Britvic H1 revenue up 5.1 pct to 678 mln pounds, guidance unchanged
• Brewin Dolphin holdings H1 pretax profit fell 42.2 pct to 21.5 mln stg
• EnQuest says production in four months to end April up 39 pct year on year
• Merlin Entertainments trading in line with expectations
• 3i Group unveils bond buyback plan