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

UK 100 Index called to open -15pts at 7310, having bid farewell to a 14-session winning streak and all-time highs to break below 2017 rising support. This results from a bearish wedge breakdown yesterday combining with completion of a 9-month 900pt bullish inverse H&S pattern, and RSI indicators finally beginning to correct from overbought. Bulls want a break back above breached 2017 support at 7330 while Bears need to see 7290 give way. Watch levels: Bullish 7315, Bearish 7305.

Calls for a negative open come as GBP rallies on some short-covering to the detriment of the UK Index ’s international-exposed members. This is on the premise that the big news is already out there, and surprises limited, following what must be have been a ‘strategic leak’ of the PM’s Brexit blueprint speech today, one which confirms a clean-break from the EU and suggests a roadmap for Brexit does exist. The leak was clearly designed to offer some clarity (hard Brexit), making up for recent criticism of government muddling and designed to counter recent volatility in the UK currency.

With US markets closed, Asia’s influence came from a negative European close. Japan’s Nikkei is underperforming, hindered by a strong Yen fuelled by a weak USD (as GBP rallies), and safehaven seeking based on political uncertainty. Australia’s ASX is lower in spite of the weak USD that normally helps the commodity space, with AUD strength its bugbear overnight and commodities off their best levels.

US equity markets reopen today after yesterday’s NYSE closure to observe Martin Luther King day.

Crude Oil prices remain unable to overcome 2017 falling highs resistance at Brent $55.70, US $52.50, although further reaction is expected to the Saudi Arabian Oil Minister’s comments that high compliance from members may see crude oil supply rebalanced within the group’s 6-month production cut window and that no further cuts are needed. A weaker USD adds to positive sentiment within the market, however some sceptics may contest that after just over a fortnight it may still be too early to comment on the effectiveness of the cuts.

Safehaven Gold has extended its rally to $1210, having cleared the $1200 hurdle, with political drivers dominating. How tough a stance will UK PM May’s Brexit blueprint speech will take at 11.45am. What policies President-elect Trump will follow through on from Friday? A weaker USD is also helping as some bullish bets on the greenback unwind, the GBP rebounds amid some short-covering and the Japanese Yen is sought out as an alternative to the traditional precious metal havens.

Today’s main event will be UK Prime Minister Theresa May’s long-awaited ‘Brexit plan’ speech at 11:45am which is likely to hog UK headlines given the potential for updates on the government’s hitherto muddled stance on divorce from the EU, especially regarding retention of single market access. Keep an eye on GBP and the UK 100 .

Data-wise UK Consumer Price Inflation (CPI) is seen continuing to accelerate to 1.4% YoY from 1.2% prior, although Core CPI may hold firm at 1.4%. Producer Prices (PPI) are seen quickening their increase to 2.9% YoY from 2.3% prior, highlighting the rising cost of a weaker GBP.

German ZEW Surveys are expected to show improvement for both the Current and Expectations readings, while US Empire State Manufacturing may have given up a little ground.

Speakers on the agenda include the Fed’s Dudley (1.45pm), US Treasury Secretary Lew (3pm) and the Fed’s Williams at 11pm. All have potential to move the USD and thus influence the UK Index .

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

• BAT agrees terms to buy Reynolds for $49.4bn
• UK's Greggs has strong Christmas but cautions on 2017 outlook
• Oil shares knock Saudi, Qatar bolstered by banks
• Cairn says net cash at $355m at December – end
• Tullow discovers oil at northern Kenya block
• PPC notes cash inflow of 1bn rand after BEE deal concludes
• Hotel Chocolat says trading since Dec has been in – line with expectations
• AstraZeneca refines endpoints for Mystic cancer drug trial
• UK subprime lender Provident Financial sees FY results in – line with market expectations
• Dechra Pharma expresses confidence about its FY expectations
• Mears sees FY results in line with management expectations
• Standard Life Investments property income trust completed sale of quadrangle in Cheltenham for $13m
• Rio Tinto payout hopes brighten on solid outlook for 2017