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

UK 100 Index called to open +25pts at 7190, again trying to break above 7180 to confirm a bullish ascending triangle that could get us back above last week’s breakdown at 7220 and open the door for a rally back towards 7365 all-time highs. While this rebound has killed off a 2-week bearish Head & Shoulders, note that it could yet morph into a bearish flag that ushers the index back below 7000. Bulls likely want to see a more meaningful test of 7200 while Bears need to see a breach of overnight rising lows at 7180. Watch levels: Bullish 7195, Bearish 7175.

Calls for a positive open come thanks to a solid session in Asia overnight after Wall St saw the Dow Jones finally get the monkey off its back and crack 20,000 to make fresh record highs. More importantly, the broader S&P500 followed suit to confirm both belief in the Trump reflation trade as well as general satisfaction with the Q4 earnings season thus far.

Sentiment is on the front foot in spite of USD weakness that normally translates to unwelcome GBP, EUR and Yen strength, but a look at the charts shows only Cable (GBP vs USD) really advancing, having broken above 4-month falling highs. Fresh Wall St highs appears to be more significant and it remains to be seen whether fresh buoyancy in metals prices (industrial rather than precious) via the weaker USD can provide enough of a boost to UK Index listed Miners given the currency hindrance.

Japan’s Nikkei is outperforming thanks to the combination of a positive lead from Wall St, a generally supportive earnings season and Trump optimism. Note Australia’s ASX closed for a market holiday, but China nicely in the green.

After a long wait, yesterday was the day that the Dow Jones finally broke the 20k barrier following over a month of trying, however all-time highs for its peer indices, the S&P 500 and Nasdaq, should also be noted as the Trump reflation train rolled back into town. This triple record for the three main US bourses can be attributed to Financial strength on hopes that the new President will soon set his sights on industry deregulation coupled with fresh strength in Materials as he pledges to build that wall.

Crude Oil prices have fallen back once again as increased official US government inventories showed a build for third consecutive week. A trend of one week rising lows support suggests some bullish sentiment remains in the marketplace, although three failures to overcome $55.75 (Brent) and $53.50 (US) resistance this week reflects the overriding bearish sentiment as Trump turns on the taps.

Gold price has continued to slide, falling back below the $1200 mark as weak Chinese macro data in the run up to the country’s New Year celebrations negates the bullish impact of the US Dollar at 7-week lows. As investors move away from non-yielding assets in the wake of the resurgence of the Trump reflation trade, a breakdown of $1195 support (currently being tested) could see precious metal fall further as the world’s second largest economy takes a long weekend.

In focus today will be preliminary UK GDP (9.30am) as well as David Davis fielding questions from MPs on the latest twist in the Brexit saga. From the latter, the hope is that we learn more about the timing of any supposedly straightforward bill to trigger Article 50 and begin the UK’s divorce from the European Union, but to which a whole host of amendments look set to be attached.

Data-wise UK GDP is expected to have eased slightly in Q4, the same likely on an annualised basis. The metric is key in light of the Brexit scenario and other macro data proving so resilient. The Index of Services (almost 80% of GDP) is seen having held firm in November

UK Home Loan Approvals can help or hinder the housebuilders depending on whether they are up or down. UK CBI Industrial Trends data may have surprised to the upside yesterday but CBI Retail Sales may well have deteriorated, echoing Tuesday’s disappointing UK Retail Sales figures.

In the afternoon US PMI Services may tick back up towards 2016 highs while Wholesale Inventories cool,  New Home Sales hold firm, the Leading Index bounces and Kansas City Fed pulls back. With results season in full swing, listen out for updates from Alphabet/Google, Caterpillar, Citigroup, Ford, Intel and Microsoft. How did they fare in Q4? More importantly, how’s the outlook?

Other speakers of note today include Germany’s Finance Minister Schaeuble and ECB member and Bundesbank head Jens Weidmann, as well as the ECB’s Knot, Mersch and Villeroy.

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

• Whitbread says Q3 total sales growth of 8.6% as Costa strengthens
• Card Factory says trading for Christmas period good as CFO to retire
• Jimmy Choo sees 2016 underlying profits in line with expectations
• RBS sets aside $4bn for US mortgage mis-selling
• UK's Kier says half – year underlying organic growth stays strong
• Diageo reports better than expected half – year sales growth, expectations unchanged
• Sage Group says exploring possible sale of U.S. payments business
• Sage Group says group organic revenue increased by 5.1% for first three months of year
• St James's Place gets Q4 asset boost from inflows, market gains
• Britain's 3i Group posts 24% Q3 return on assets
• Unilever Q4 underlying sales growth 2.2%, below estimates
• Precision engineer Renishaw see FY revenue and profit growth
• Kaz Minerals exceeds copper guidance with 73% output growth
• Property firm Great Portland sees ‘healthy’ interest despite economic uncertainty
• Sky reports dip in H1 operating profit on increased football costs
• Spreadbetter CMC sees sector challenges while regulatory changes confirmed
• Brewin Dolphin funds grow to £36.4bn in Q1
• Lonmin keeps 2017 sales target, says to review capital expenditure
• Anglo American reports overall increase in copper output for 2016
• Johnson & Johnson to buy Actelion for $30bn
• Co – Operative bank expects core capital ratio to fall below 10 pct
• 3I Goup posts NAV per share 558p, total return 24.1% at end – 2016
• UK's Rank Group H1 pretax profit down 9% amid increased costs
• BHP launches online freight platform to sink shipping costs
• Gold falls as equities rally offset US policy concerns
• Oil prices rise on weakening dollar, but plentiful supplies cap gains