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

UK 100 called to open -10pts at 6275, having weakened back steadily from the highs of yesterday although declines were held up overnight thanks to 6260 intersecting support from 25 May. This could help deliver the platform for a rebound to maintain the uptrend from late May and keep alive a bullish inverse head & shoulders reversal towards 2016 highs. The bears hope to see persistent weakness result in a break of rising lows since 19 May. Watch levels: Bullish 6285, Bearish 6250.

The negative start follows a mixed performance by US and Asian bourses, although the rebound from overnight lows suggests optimism after Chinese Trade data offered a bright spot via Import growth almost holding breakeven, suggesting significant stabilisation that supports the argument for economic transition from exporter to consumer. A confirmation of improved Japanese GDP growth has also helped keep the Nikkei above water even while a weaker USD sees the Yen strengthen.

US markets rallied yesterday, piggybacking the oil price with the S&P500 hitting an 11-month closing high. Since we’re now subject to a Fed blackout, the drivers are somewhat simpler to analyse - Crude oil doesn’t possess the advanced linguistic abilities of the Human speechwriter after all.

This morning note Oil is the beneficiary of speculative buying ahead of this afternoon’s US EIA stockpiles report. Prior prints (Genscape, API) have indicated another drawdown, but if recent weeks are anything to go by there’s no guarantee today’s data will confirm that.

Gold is currently testing $1250 with nothing Fed-wise in the near term pipeline to change the current outlook, which is pretty dovish. It’s therefore still about safe haven seeking (Brexit fear), which could well see the yellow metal back to 5 week falling highs around $1266. Bullish Flag pattern? Note also the stronger Japanese Yen.

In focus today will be UK Industrial & Manufacturing Production which consensus has falling back to flat growth, if not giving up a little ground, in April. While contraction could deliver a dent to GBP, any data strength may simply be offset by Brexit fears.

In the afternoon, the May NIESR UK GDP Estimate will be looked to after slowing in April to repeat February’s lowest read in 3 years while the dominant Brexit debate intensifies and we meander towards the home straight on the lookout for each and every poll and update by the bookies.

With Oil in the spotlight having broken back above $50, the US’s latest EIA oil inventories will attract much attention after API data last night suggested another weekly drawdown (-3.6m barrels). With  last week’s EIA drawdown making it two weeks on the trot for the first time since September 2015, a hat-trick will add to hopes of markets moving a step closer to rebalancing even if supply issues (Nigeria, Canada) are providing artificial buoyancy.

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

• Sainsbury's sees no let – up in tough market conditions as sales fall
• Workspace full – year profit rises
• Boohoo.com sees FY sales growth of between 25-30%
• CMC Markets profit rises as volatile markets boost volumes
• Fenner CEO Nicholas Hobson steps down with immediate effect
• AO World full – year operating loss widens to 10.6 mln stg
• 3i Infrastructure raises £385m pounds in capital
• London copper revives from two – week lows as dollar softens
• Oil stays near 8-month high on U.S. inventory draw
• HSBC announces issuance of subordinated notes due 2028
• Sky Network confirms tie – up talks with Vodafone NZ
• Domino's Pizza invests 24 mln stg to buy minority interests
• UK energy regulator consults on National Grid's cost recovery request