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

UK 100 Index called to open +25pts at 7175 having bounced from yesterday’s close near the lows of the day. This means rising lows since Monday’s worst, which, coupled with 2-day resistance around 7180 means we could be in the midst of a bullish ascending triangle bottom that could deliver a reversal of last week’s downtrend. Especially with the 4-hourly RSI attempting to escape from oversold. Bulls will be looking to better overnight highs while Bears need to see a breach of 2-day rising lows support. Watch levels: Bullish 7185, Bearish 7155.

Calls for a positive open comes after a positive day for Wall St (S&P fresh record high) a baton which has been passed to Asian bourses overnight. One element of help comes from the USD rallying back to the highs of yesterday, delivering mildly helpful weakness in GBP, EUR and Yen.

However, it is strength in base metals that is really driving sentiment, Copper in particular up on restricted supply (BHP Billiton cut guidance; prolonged strikes could make matters worse) and growth/inflation expectations from US infrastructure spending plans as Trump sticks to his campaign hymn sheet. Note Aluminium, Iron Ore, Lead and Zinc all tagging along while Oil holds around $53/55, near the mid-point of a $50-60 range as US production increases challenge OPEC cuts.

Japan’s Nikkei is outperforming after shares in Takata (air-bag problems) jumped thanks to it choosing bankruptcy over a disruptive restructuring. Australia’s ASX is helped by Miners shining under the gaze of higher metals prices and lower inflation expectations reducing the chance of a rate hike down under. Chinese equities are performing in-line with Australia.

As Trump continues to plough through his executive orders list, a reversal in President-related sentiment for US equity markets saw the S&P 500 reach an all-time high on Tuesday. The confirmation of oil pipeline projects saw the Materials and Energy sectors outperforming on hopes that more infrastructure-related orders will be signed soon. The Dow Jones saw a breakout from 2 week falling highs resistance to regain a 19,900+ handle, as Du Pont led risers thanks to a positive earnings report and Dow Chemicals merger chatter, while the Nasdaq also reached an intraday and closing high, up 0.9%.

Crude Oil prices have edged back from their highs reached yesterday evening as President Trump’s executive orders to complete two key oil pipelines in the US increase concerns that a US production uptick in early 2017 could offset the impact of OPEC’s production cuts on global supply. This coupled with industry data showing another weekly build in inventories promises this evening’s official government inventories will be closely scrutinised for a confirmation of increasing US production.

Despite the US Dollar continuing its post-inauguration weakness, Gold is once again on the back foot as concerns that Chinese demand is weakening as we approach Chinese New Year weigh. A technical rebound from 1 week $1202 rising lows support this morning could be short-lived if trading volumes today remain muted.

In focus today will be German IFO Business Surveys (9am) which are expected to show marginal improvement in January. Business Climate should continue edging towards a test of early 2014 highs while both Expectations and Current Assessment creep higher.

UK CBI Industrial Trends (11am) data is forecast to regain positive territory in January for the first time since early 2015 although the reading for Business Optimism may have remained sub-zero for a fifth straight month on account of Brexit uncertainty, and still technically in a downtrend since early 2014

Thereafter it’s to the other side of the pond where we have US FHFA House Prices (2pm) forecast to deliver another month of solid growth in-line with the average over the last few years. US Oil Inventories (3.30pm) will be of interest in light of builds over the prior fortnight as US producers ramp up production while OPEC strives to cut to buoy prices.

At the European markets close (4.30pm) BoE Governor Carney delivers a keynote speech on fintech from the G20 conference on "Digitising finance, financial inclusion and financial literacy” in Germany where Finance Minister Wolfgang Schaeuble and Bundesbank Chief, ECB Governing Council member and hater of all that is accommodative Eurozone monetary policy Jens Weidmann also speak.

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

• Oil eases on rising U.S. inventory, market looks to EIA data
• Vedanta Resources announces result of 2018 and 2019 bonds tender
• UK's Restaurant Group sees cost pressure this year
• WH Smith sees full – year profit slightly ahead expectations
• Chilean miner Antofagasta sticks to 2017 copper production target
• Antofagasta FY copper production rises
• Fresnillo sees 2017 silver production in range of 58 – 61 moz
• Johnston Press wins Daily Mail print contract
• Santander UK sees more challenging macro environment in 2017
• Aluminium rises to near 20 – mth high on hopes for China capacity cuts
• Mccarthy & Stone says trading in line with expectations