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

UK 100 called to open -25pts at 6655, having steadily crept back from yesterday’s teasing test and failure at 6700. Nonetheless, the sell-off is thus far limited (-0.8%) and the post-Brexit rebound is still very much valid. And help is at hand via an intersecting trend line from June 16 lows, through last Wednesday, offering support at 6640 to stem the current breather. Bears point to a breakdown from a bearish double-top reversal that could take it back to 6620. Our  watch levels are Bullish 6665, Bearish 6635.

A negative opening call comes as Asian bourses trade off session highs in contrast to US indices posting more record highs. This after aluminium giant Alcoa (AA) made for a positive start to US Q2 earnings season and investors cut expectations of a Fed rate hike by year-end. Hopes are still high that the BoJ will follow the BoE with policy easing end-July to stimulate its flagging economy although the Yen has strengthened for the first time in 3 days to the detriment of exporters.

Japan’s Nikkei off its best levels due to a Yen rebound while Australia's ASX benefits from a rebound in commodity prices, notably Oil. However, the black stuff is off its highs after API inventories showed a rise in weekly Crude stocks. Chinese stocks are testing April highs trying to break beyond 3-month horizontal resistance and overcome a 12-month series of falling highs.

US equity markets closed in the green with the Dow and S&P 500 indices making record intraday highs. Gains in both the basic materials and energy sectors were evidence of a return of risk appetite to the markets, although note Crude oil prices took a knock overnight following some US stockpile data from the API that showed a 2.2m barrel build in US crude inventories. The EIA reports its own (more ‘official’) version of that later on today, with forecasts seeing a drawdown…

So the downtrends on both Brent and WTI have intensified somewhat on that data, and if today’s EIA print confirms a build when analysts expected a draw, we could be back towards recent lows of $46 and $44 respectively.

Gold has recovered back to $1340 after falling through support yesterday on renewed bullish sentiment in equity markets. $1341 now serving as resistance. A break above puts the yellow metal back into July’s sideways range with a ceiling at recent highs $1375, while a pullback could see it re-test $1327 before pushing on down towards $1320.

In focus today will be China Trade data around the European open where exports contraction is seen worsening and imports set to plunge again after the prior month’s much improved figure. Overall this should deliver a slightly smaller trade surplus.

Thereafter, we have June Spanish and Italian Consumer Price inflation seen confirmed but Eurozone Industrial Production may have deteriorated in May. In the afternoon, US Import Prices are expected to show less inflationary pressure in June but an easing in annual deflation.

US DoE Oil Inventories will be of interest today given that last week’s smaller than expected build sparked an oil market sell-off, and we note last night’s API data signalling a stockpile build, at odds with consensus for another DoE drawdown.

In terms of speakers and events, the main event has to be Theresa May taking over at 10 Downing St, but chat from the Fed’s Kaplan and Harker and the Fed Beige Book this evening could well move stateside sentiment on growth and monetary policy outlook with a knock-on for the USD.

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

• Barratt Fiscal-Year Pretax Profit Rose 20%, Upbeat on Outlook
• Burberry Warns on Revenue Amid Sales Pressure
• Burberry Q1 like–for–like sales -3%
• AstraZeneca Resolves Faslodex Patent Litigation in US
• JD Wetherspoon Targets Modestly Improved Outcome for Fiscal 2016
• ICAP Made Good Start to Year; Cautiously Confident
• ICAP sees Brexit ‘windfall’ from sterling slump
• Barratt says will reassess future land, build programmes after Brexit
• GVC Holdings says trading in Q2 has been strong
• Speedy Hire sees full year results ahead of previous expectations
• GW Pharma says to raise $252m via public offering
• Bloomsbury sees FY trading to be in line with its expectations
• South Africa's Steinhoff purchases Poundland for $793m
• Fenner says Q3 trading reflected further improvements
• Russia's MMK lifts steel output 5.2 pct in second quarter
• Playtech buys Best Gaming Technology for €138m
• Shire U.S. launch of Xiidra planned for Q3 2016
• Tesla Exploration provides update to credit facility negotiations