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

UK 100 Index called to open +15pts at 6910, back above 6900 following an overnight recovery from 6890 thanks to 1-month intersecting rising support. An overnight rising channel and breakout to 6910 bodes well for recovery to Monday’s 14-month highs. Note, however, falling highs resistance lurking around 6920-6925 as well as the daily RSI still flirting with a bearish signal in the wake of a near 20% post-Brexit rally. Watch levels: Bullish 6915, Bearish 6895.

Positive calls for equity indices come after a green session in Asia outshone a negative finish on Wall St, the latter taking a breather from fresh all-time highs. Note Japan’s Nikkei doing well in the face of a strong Yen, a product of a weak USD (see below) which is normally a hindrance. Japanese officials suggesting they were watching FX markets ‘with a sense of urgency’ likely has investors comfortable that intervention will prevent the situation worsening ahead of  surely more stimulus from the BoJ next month.

Australia’s ASX is holding just above breakeven with commodities including Oil on the back foot in spite of USD weakness. Note Chinese markets solid on the back of news that a new trading link between Shenzhen-Hong Kong link is a step closer to going live, adding to an successful one already in place with Shanghai. The move would open the country more to outside investment and liberalisation, and improve prospects for more young start-up/tech/biotech/energy names.

US stocks closed in the red with losses cushioned by a still buoyant oil price  (though off its highs) which helped energy stocks. Hawkish Fed commentary also played its part, with New York’s Dudley and Atlanta’s Lockhart both talking about one rate hike in 2016 and both entertaining talk of a potential September job.

Neither really offered much real substance though, which smacks of the usual ‘keep markets on their toes’ game (the phrase ‘broken record’ springs to mind). Muted inflation data from the US added to the melange of drivers that pushed the Dollar lower yesterday afternoon, which could have a knock-on for commodities today.

The weaker USD has helped push Crude prices higher, the latter finding additional support in production freeze chat which, although everyone knows it’s absolute rubbish, has left a bullish residue that continues to drive oil back towards $50.

Gold has not benefitted from USD weakness to quite the extent one might have expected with risk sentiment still high. Note this is as much down to big investors being herded into equities due to low interest rates as it is down to the mere desire to take more risk. Therefore look out for safe haven seeking to creep back in as a major driver

In focus today: UK Unemployment is expected to show a mild increase in Jobless Claims in July which it still likely too early to attribute to the Brexit referendum result and associated economic uncertainty. What may be more interesting is whether Wage Growth meets a consensus acceleration that would support yesterday's firmer inflation prints that helped a weak GBP find its feet again vs USD, even if the pound sterling remains weak vs EUR.

In the afternoon, US Oil Inventories are seen delivering another build (+900K barrels) making it a fourth straight week of rising stockpiles. The trend, however, remains one of shallow decline from the highs of mid-July. Watch for any bigger than expected build to check the recent oil price bounce, one that has been based on hopes (and dreams?) of an OPEC agreement on production freezes.

In the evening, comments from the Fed’s Bullard are sure to attract attention after what peers Dudley, Lockhart (both hawkish) and Williams (dovish) have already said. July Fed Minutes will also be dissected with the usual forensic delicacy, markets ever hopeful of uncovering clues about the timing of the next US rate hike.

We still say no hike, not until end-Q1 next year (at the very earliest, and only if the stars, moons and  planets are all perfectly aligned). Not with markets facing myriad event risk, data is hit and miss and certainly not while peers are doing precisely the opposite, taking easy policy to new depths to fight both deflationary and recessionary risk.

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

• Dechra Pharma poaches finance head from Consort Medical
• Carlsberg CFO expects limited direct effect from Brexit
• Construction company Balfour Beatty restarts dividend, says no Brexit impact yet
•  Admiral 1H Pretax Profit Rises; Raises Dividend
• Cobham CEO to be replaced by Laird boss by end of year
• Lookers says Brexit vote has not had significant impact on car sales
• Moody's maintains stable outlook on Switzerland's banking system amid solid operating environment
• London metals broadly softer as dollar posts slight rebound
• Oil prices fall on doubts producers can agree output restraint
• BHP Billiton's fiscal 2016 performance in-line with expectations; ratings unaffected
• BP’s Whiting refinery flaring due to minor upset – sources
• Indivior Announces Positive Top-line Phase 3 Pivotal Study Results
• Independent Oil & Gas Skipper Well Update