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

UK 100 called to open flat at 6265, with overnight trading holding up above the now key 6250 level which gives weight to the argument that the Bulls remain in control. As suggested, the 24-hour sideways shift is likely a pause before continuation of the bullish triple-bottom breakout to 6350. A break above 6280 would kick start the second leg of a 3-day bullish flag pattern to 6430 highs of 2016. Watch levels unchanged: Bullish 6285, Bearish 6240.

The flat opening call comes as Asian bourses struggle to emulate US gains, even with Brent Crude Oil conquering $50 to lock in an 80% rally to 6-month highs and US Crude knocking at the door to boost economic sentiment (welcome inflation on its way?) following a US Stockpile drawdown and growing belief in a supply/demand rebalancing.

Energy-related stocks are understandably benefiting Japan’s Nikkei and the Aussie ASX, although limited by a slightly weaker USD resulting in strength for the Yen and Aussie dollar. Note Financials also holding firm on the prospect of a June US Fed rate hike. Optimism is, however, lacking elsewhere as worries about a slowing China creep back in to send its equities to 2.5-month lows depsite the slightly weaker USD helping raw material metals.

US markets tracked oil higher again (Brent Crude breaking above the key $50 level) after the EIA data showed a bigger than expected 4mn barrel drawdown in US inventories. We heard from a slightly dovish Kaplan who said he’d likely not vote for either a June or July rate hike, yet his outlook was still in agreement with the hawks on the number of rate rises this year - about 2. Kashkari, meanwhile, called negative interest rates ‘perverse.’

The Fed’s annual survey on economic wellbeing found that most American households are better off financially than they were last year, yet nearly half said they wouldn’t be able to find $400 for an unexpected emergency. Is now the time to raise their borrowing costs then?

While oil prices continue to tick higher, note that the prospect of an OPEC-led deal to control output looks ‘dead,’ even as Iran approaches pre-sanctions production levels - which it had previously said would make it more at home to participating in discussions. It seems not...

Gold bounced up off $1218 with some potential short covering kicking in as the USD basket turned over. Now off its recovery high which coincides with 17 May falling resistance. With a positive mood remaining in the equities space, it’s only really the  USD that’s driving demand for gold currently, and while Kaplan was a bit dovish, note he wasn’t that dovish which should keep at least some expectations of a June hike alive. Back to $1220 today?

In focus today will be UK Q1 GDP growth expected to be confirmed at 0.4% QoQ and 2.1% YoY, slower than the 0.6% QoQ posted in Q4 but steady over the year. UK BBA Home Loans are seen higher in April supporting a solid housing market even in the run-up to an uncertainty-filled UK referendum on EU membership while comments from the G7 Leaders meeting in Japan may attract market attention.

In the afternoon, those notoriously volatile Durable Goods Orders growth is seen calming in April after a strong March while US Pending Home Sales consensus is looking for a slower April, at odds with those very strong New Home Sales figures we saw on Tuesday. Remember Homes are most people's biggest asset so has an impact on consumer confidence.

After a run of poor US regional manufacturing prints (Empire, Richmond, Philly) the Kansas Fed may add to the fray with a still negative number expected, adding to scepticism about a Summer US Fed rate hike. Note the Fed’s Bullard (an actual FOMC voter, so what he says counts for more) up mid-morning while Powell (Another voter? That’s two! Listen up folks!) graces the airwaves after the European close.

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

• ASOS founder Robertson raises about 46 mln stg via stake sale
• Sophos Group sees free cash flow doubling in year ahead
• Imagination Tech warns on full – year revenue and loss
• Pets at home says FY total revenue up 6.7 pct
• Tissue converter Accrol Group plans listing on London's AIM
• UK's Tate & Lyle posts higher full – year profit, pretax profit +5%
• Daily Mail downgrades outlook on print advertising slump
• Legal & General says Chairman Stewart to retire from June 1
• Oil prices top $50, Asian shares struggle as China sags
• Origin Enterprises sees FY EPS of 43 – 46 cents
• PayPoint FY adj oper profit up, plans 25 mln stg capital return over 5 years
• Debenhams names Amazon's Sergio Bucher as new CEO
• Darty Q4 revenue rises nearly 13 pct
• Car dealership Inchcape says 2016 performance in line with expectations
• Foxtons says Mark Berry from Hays to become new CFO
• United Utilities FY16 Pretax Profit Rises; Confident of Reaching Targets
• Balfour Beatty Secures GBP130M Construction Contract
• B&M European Value Retail Reports 31% Rise in Fiscal 2016 Pretax Profit
• Mosman Oil and Gas Operations Update