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

UK 100 called to open +30pts at 6725 with futures delivering a breakout above this week’s 6715 highs. This opens the door to revisiting last Thursday’s 11-month highs of 6744 and maybe even going on to make fresh 12-month highs circa 6800. The Bulls are content to see our two bullish patterns (flag, inverse H&S reversal) still valid in terms of regaining (even exceeding) last year’s 7100 all-time highs. Continued rising support now means Bears need a breach of 6700 to jeopardise the July uptrend. Watch levels: Bullish 6735, Bearish 6715.

A positive opening call comes after a mixed session in Asia following stateside losses as the global rally lost a bit of momentum with the IMF cutting growth forecasts and investors contemplating upcoming central bank action. Nonetheless, positive US corporate results have maintained optimism overnight to suggest a positive European open. Geopolitical risk still stewing in Turkey.

Japan in the red, but only just, despite a weaker Yen while Australia's ASX is positive even if consumer confidence dropped and commodities are hurting from a stronger USD. The latter comes as some revisit the potential for a Fed rate hike as early as September, even in the face of more stimulus from peers (BoE, BoJ, ECB).

US Dow Jones futures are breaking out strongly to make fresh all-time highs this morning, with a technical boost from a bullish triangle assisted on fundamental grounds by a buoyant oil price and more consensus beating earnings from Goldman Sachs (GS) (although shares are lower), Microsoft (MSFT) and Johnson & Johnson (JNJ). Note, however, US homebuilding stocks failed to benefit from good June housing starts.

Brent Crude futures are looking healthier than their US Crude counterpart with the latter trading down near support at $44.54, despite a 2.3mn barrel drawdown in US inventories. Markets are more concerned about waning demand for crude and a glut of refined products, something the traditional summer driving season in the US has seemingly failed to dent. As always, EIA data this afternoon is sure to give traders more food for thought.

Gold continues into the apex of its narrowing pattern with bears looking for a breakout by the USD basket from its July bullish ascending triangle pattern to put downwards pressure on the yellow metal, while support should continue in the form of geopolitical tensions. Which will win out?

In focus today will be UK Unemployment data with claims seen rising only slightly in June and the unemployment rate holding at its post-crisis lows. However, continued acceleration in average earnings growth in May could suggest inflationary pressure even before a June Brexit vote that saw sterling plunge and may deliver upward pricing pressure in the second half of the year.

In the afternoon, macro data offerings are thin on the ground. Eurozone July Consumer Confidence is expected to have edged back towards its Q1 lows, but it does remain in a long-term trend of rising lows from the depths of the financial crisis. The print will be a key gauge as to how the Brexit vote has impacted consumer sentiment on the continent?

Thereafter it’ll be all eyes on US Weekly Oil Inventories which have led to some significant volatility of late with even a slight miss on a drawdown resulting in a sell-off. Will we see a ninth weekly drawdown in a row? Note also that API stocks last night showed a 2.3m barrel drawdown last week, just above expectations, and offsetting last week’s first build in four.

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

• Miner Fresnillo hikes full – year gold production guidance forecast to 850–870K ounces
• Hikma Pharma announces U.S. launch of two generic tablets
• Just Eat sells stake in Mexico business
• Anglo American trims full – year guidance on Brazilian iron ore
• Electrocomponents sees FY annualised net savings of at least £15m
• Moody's says negative outlook on uk's banking system reflects uncertainty following Brexit vote
• Johnson Matthey sees FY in line with expectations at constant rates
• Gulf Keystone says to hold special general meeting on Aug 5
• TalkTalk's customer base down 9,000 in first quarter
• Wizz Air cuts UK growth plans on Brexit weakness
• IQE sees significant increase in H1 revenues, profits
• Severn Trent sees trading performance consistent with its expectations
• Anglo American cuts FY copper, iron ore Brazil production guidance
• Burberry to start share buy back of up to £100m
• Electrolux ups European market outlook, says UK demand uncertain
• London copper, nickel slip as strong dollar sparks profit–taking
• Unilever acquires Dollar Shave Club
• Auroch Minerals announces deed of settlement with Xtract Resources
• QinetiQ First Quarter in Line with Management Expectations