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

UK 100 Index called to open +15pts at 7190, holding close to yesterday’s 7205 record all-time high but back from overnight highs just shy of the round number. 2017 rising support is still valid at 7180 after yesterday’s breakout from a 10-day up channel but note falling highs since yesterday’s European open. Bulls likely need to see 7200 again to inspire confidence in fresh highs. Bears probably want 2-day rising support at 7180 to give way, maybe even the recent rising channel ceiling at 7170. Watch levels: Bullish 7200, Bearish 7165.

Calls for a positive open come courtesy of solid gains for Wall Steet's first session back and Asian equities advancing overnight. Solid US data has boosted optimism about global growth while Oil off its lows after yesterday’s $3/barrel sell-off (USD rally induced) is helping the general commodity space.

Japan’s Nikkei has returned from holiday to 2% catch-up gains fuelled by US Dollar strength sending the Yen lower to the benefit of exporters, while a solid PMI Manufacturing print made for a positive start to the day’s macro line up ahead of a PMI Services deluge from the Eurozone.

Australia’s ASX is just the right side of break even, on the cusp of a bull market (near 20% bounce from last Feb lows), as metals prices find support and Chinese consumer sentiment (biggest Aussie export market) beat expectations to move back towards 2016 highs.

US Markets reopened yesterday to post gains during the first trading session of the year, however closed short of session highs as the stronger Dollar and sliding oil prices hampered sentiment into the close. The Dow Jones came within 65 points of the hallowed 20k mark, however eventually closed 120pts short (+0.6%) with Goldman Sachs’ post-election advance continuing. The S&P 500 closed 0.8% higher, a figure mirrored by the Nasdaq, as Telecoms and Healthcare names outperformed.

Crude Oil prices pared early 3% gains (and 18-month highs) to sell-off sharply during the US trading session as the US Dollar posted fresh 14-year highs. The subsequent fall to two-week lows came despite the first report of OPEC members cutting production as part of November’s Vienna deal. With the Dollar coming off its highs failing to provide a significant recovery for prices, further production updates from OPEC may be required to reverse yesterday’s losses.

Gold has rebounded from lows of $1146 to continue its December rebound revisiting yesterday’s highs of $1163 overnight in spite of persistent USD strength. Expectations for higher Chinese demand ahead of the Lunar New Year are helping offset some of the weakness from India where physical demand is suffering from a cash crunch linked to Modi’s fight against corruption, the black economy and counterfeit notes.

In focus today will be Eurozone PMI Services with both Spain and Italy pulling back from recent highs, while Germany and the region as a whole give up more ground but France maintains its recovery. After strong figures from Germany yesterday, Eurozone Consumer Price Inflation (CPI) has potential to surprise to the upside for December, much to ECB president Draghi’s relief given his plans to reduce the size of his bond-buying QE stimulus program as of April.

After blowout PMI Manufacturing yesterday, UK housebuilders could get a boost from UK Construction PMI creeping higher and supportive UK home lending and mortgage approvals data. Further acceleration of M4 Money supply can be indicative of inflationary pressure, something the UK is already having to live with via a Brexit-induced weaker GBP.

In the evening the latest Fed Minutes from its December rate-hike meeting will be of interest with analysts scouring the text for any hidden clues about the pace of rate rises and consideration of a Trump presidency and policies.

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

• Zambia Vedanta mine workers strike over delayed pay talks – union
• Retailer B&M says record Christmas drives strong third quarter
• Ryanair says December load factor rose to 94%
• Competition watchdog has concerns with Mastercard's acquisition of Vocalink
• British retailer Next cuts 2016/17 profit guidance, warns on 2018
• Temporary power provider Aggreko wins contract for 2018 Winter Olympics
• Hilton Food says to form JV with Sonae Modelo in Portugal
• Carillion JV awarded £160m contract in Dubai
• Grainger names Mark Clare as new chairman
• Wizz Air passenger numbers rise 23.3% in December
• Ultra Electronics wins £9.7m contract extension with Royal Navy
• UK shop prices fall by smallest amount since mid-2015 as price pressures build - BRC
• Gold inches up as physical demand offsets stronger dollar
• Copper extends losses on strong U.S. dollar
• Oil prices edge up tighter supply outlook, but strong dollar weighs