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

UK 100 called to open -15pts at 6680 having edged back steadily overnight from yesterday’s highs and 6700. The July uptrend of supportive rising lows, however, remains intact keeping the Bulls happy about the prospect of another up leg higher via a brace of bullish patterns. Bears, though, are focusing on falling highs since last Thursday which could put the July uptrend in jeopardy if 6650 can be breached to the downside. Watch levels: Bullish 6695, Bearish 6665.

The negative opening call comes despite US markets delivering fresh all-time highs after decent Q2 scorecards from major banks. A mixed session in Asia overnight comes as markets might actually be starting to worry about the prospect of more central bank intervention (Australia and New Zealand too?). When added to existing expectations (BoJ, BoE, ECB) it begs the question about whether we are facing a potential race to the bottom in terms of stimulus and more currency wars. A weaker oil price is not helping either on oversupply concerns despite output cuts.

Japan is in the green, playing catch-up after a long weekend, boosted by weaker Yen and a tech sector buoyed by the ARM takeover. Poor results from Yahoo and Netflix are however, weighing on regional sentiment. Australia's ASX is faring well despite a strong USD and weak commodity space, while China stocks are underperforming (note iron ore down another 1.5% after a 5% drop) which some see as a signal of economic concern when coupled with Copper stuck at $4900/tonne.

US stocks closed up (meaning more record highs…), led by the tech sector following the announcement of the ARM / Softcat transaction while consensus beating earnings from Bank of America also helped after peers Citigroup and JPMorgan beat last week.. Losses in the energy sector (on dashed hopes that the Turkish situation might usher the oil price higher) saw the Dow underperform the Nasdaq to settle just north of neutral.

Crude prices remain in a July downtrend, though have picked up support at rising lows since 10 July. Bearish drivers outweighing bullish ones over the past 24 hours with those global supply glut worries resurfacing on demand concerns. Note data from the API today and EIA tomorrow expected to show more draws on US inventories though, such that if current support levels hold, we could see a bounce.

Gold is tightly range bound and remains well supported by geopolitical factors. However note falling highs since 11 Jul a concern for bulls while the USD basket is potentially set for another leg higher. A break above $1332 could see $1340 revisited, while a pullback below $1327 puts $1320 on the cards.

In focus today will be UK inflation data with expectations for the key Consumer Price Inflation (CPI) headline to hold growth in June and have improved on an annual basis. Importantly, the annualised Core print is also seen improving. As for Producer Price Inflation (PPI) - Output prices probably improved while Input prices slowed, but deflation was likely much improved since last year. Not inflation is hardly a worry in terms of potential BoE rate rises when we are more likely to see a rate cut next month after Brexit.

Later in the morning, ZEW Surveys  may show a drop in sentiment linked to Brexit, while in the afternoon, US Building Permits and Housing Starts are seen showing accelerated growth for the former, and a rebound for the latter. Listen out also for the Bank of England’s (BoE) Broadbent for any clues about what we should expect from the UK central bank in terms of stimulus in early August.

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

• BCA Marketplace buys UK automotive services group
• IG says Brexit vote heralds challenges for European business
• Sinclair Pharma says second interim period revenues of 17.2 mln stg
• Centaur Media appoints interim chief financial officer
• Gem Diamonds says at Leteng in H1 recovered 57,380 carats
• Alliance Pharma says does not see any issues over market access
• Secure Trust H1 underlying pretax profit rises
• IG Group full – year proft rises
• Arbuthnot says H1 underlying pretax profit 2 mln stg
• Royal Mail says quarterly trading met its expectations, revenue grows 1%
• Dairy Crest says Q1 trading in line with expectations
• Hammerson sells Manor Walks Shopping Centre for 78 mln stg
• MHP Q2 poultry production volumes 149,935 tonnes, up 9 pct YoY
• Legal & General completes 750 mln pound pension buy – in for ICI
• ITE Group appoints Andrew Beach as CFO
• SSP Q3 underlying sales up 3 pct
• Gateley full – year profit up 12 pct, says trading encouraging
• Russia's Evraz says Q2 crude steel output down 10 pct q/q
• SoftBank untraded with glut of sell orders after $32 bln ARM purchase