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

UK 100 called to open +15pts at 6725, with an overnight bounce from 6700 adding to yesterday's afternoon rebound from 6690. This maintains July’s uptrend, following a retreat from tests of 6750 that saw the index make fresh 11-month highs. The bounce bodes well for Bulls hopeful of seeing the impressive post-Brexit bounce get a second wind towards 7100 all-time highs. Bears are focusing on a slower pace of advance since mid-month, paying close attention to any signs of the index topping out which would likely need 6700 and 6650 to both give way first. Watch levels: Bullish 6745, Bearish 6715.

A positive opening call comes despite stateside losses yesterday evening and a mixed Asian session overnight derived from concerns that the Bank of Japan (BoJ) might disappoint on Friday, not delivering quite as much stimulus as markets have been gearing up for. This comes after government officials said the size of any fiscal package has not yet been decided on while monetary intervention is a matter for the BoJ. A weak oil price is not helping either, nor Copper being held back by long term resistance.

Japan’s Nikkei is thus in the red again with exporter equities suffering from a stronger JPY, hindered by a combination of revised stimulus expectations (see above) and hindered by chart technicals (USD/JPY in defined falling channel). This despite markets expecting further divergence in central bank policy rhetoric with the US Fed seen sounding more hawkish on Wednesday in light of positive economic data of late.

US equities fell foul of energy sector declines as the oil price retreated on those rotund gasoline inventories that just don’t seem to be going down - right in the middle of the US ‘driving season,’  which is actually a thing. It’s now all eyes on the Fed’s statement on monetary policy tomorrow, with investors concerned about more hawkish commentary stifling stock market gains.

A bearish mood in the oil space, as mentioned above, with both Brent and WTI still in falling channels since last Thursday and both trading near their respective ceilings, a potential indicator of more downside to come, although note that weekly API inventories this evening should tell us whether the market is indeed still hung up on gasoline.

Gold is still in a tight range with traders awaiting central bank updates from both the US (tomorrow) and Japan (Friday) that have potential to move the USD. Note support fairly solid around $1312, but that could be both tested and broken if we get a more hawkish tone from the Fed (fairly likely given positive recent US data) combined with a more dovish BoJ (perhaps not so certain).

Today’s focus will see BBA Home loans eyed for clues about the state of the UK’s precious housing market, with consensus suggesting an understandable referendum-inspired slowdown in approvals in June. Thereafter it’s over to the the pond to the US Housing market where growth may also have slowed in May, but annualised gains may in fact have accelerated.

Following a run of positive US data, and solid PMI’s from Europe (expect the UK which plunged) let’s see if US PMI Services can edge higher in July and drag the composite read up to. Note US Consumer confidence seen lower, and US New Home Sales only a shade better in June. But after that US Dallas Fed beat yesterday (best in 18-months), it’ll be interesting to see of the Richmond Fed can follow suit and rebound from its 12-month lows.

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

• Veolia wins three waste treatment contracts for total of £71 million
• Ofcom orders BT to run network division as separate company
• Virgin Money sees pressure as interest rates stay low after Brexit
• Ladbrokes/Coral must sell stores to get merger clearance – UK competition regulator
• Datwyler bid for Premier Farnell cleared by German authorities
• AB InBev offers 45 stg in cash for each SABMiller share
• Canon cuts profit forecast as post – Brexit yen strength bites
• BP misses Q2 profit expectations as weak refining margins, oil price bite
• Unilever prices $1.25 bln bond on U.S. market
• UK's Drax sees 2016 earnings at lower end of forecast range
• Engineer GKN sticks to 2016 forecast for growth
• Segro Plc appoints Soumen Das as CFO
• Man Group says H1 funds under management fall 3 pct yr – on – yr
• Anglo American says Themba Mkhwanazi appointed CEO of Kumba Iron Ore
• Vodafone Qatar reports flat year – on – year loss for Q1