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

UK 100 Index called to open +5pts at 7125, having found support at 7110 overnight but failed to overcome 7140 which extends the trend of falling highs since Friday. It also means a bearish flag is still in play, potentially taking the index back below 7100. Bulls want a breakout to 7130 to overcome said falling highs. Bears want to breach overnight lows. Watch levels: Bullish 7130, Bearish 7105.

Calls for a positive open come despite a largely negative session in Asian overnight that followed a  down day on Wall St (Dow Jones back below 20000) as markets factor in uncertainty about how new US President will govern and the impact it could have on global growth.

Many Asian bourses are still closed for Lunar New Year holiday. Japan’s Nikkei is underperforming under the weight of Yen strength (and a Utilities profits warning). The Bank of Japan (BoJ) left policy unchanged and hiked growth forecasts while the currency also benefits from demand as an alternative safehaven alongside Gold and Silver continuing to bounce, assisted by yesterday’s turnaround and retreat by the US Dollar as the Trump travel ban was digested.

Australia’s ASX is struggling from a weak oil price due to production concerns (more US drilling offsetting OPEC cuts) denting sentiment towards Energy names while Materials stocks are hindered by a stronger Aussie Dollar offsetting welcome US Dollar weakness for most commodity prices.

US stocks recorded their worst trading day for the new year as equities reacted to the trump travel ban and reappraised the effects it could have on the economy. Energy suffered from a waning oil price as US drilling activity continues to rise.

In focus today will be overnight escalation of the Trump travel ban after he fired the US attorney general for refusing to enforce his legal order, ordering Justice Department lawyers not to enforce it. Politicians get hired and fired daily, but markets don’t like uncertainty and rushed politics like world saw this weekend. After the Mexican wall, the risk is such protectionist events become too regular.

In the UK, today sees MPs begin a two-day debate on Brexit, discussions extended to midnight to allow for more speakers before a vote on Wednesday. The Times reports that The PM wants to trigger Article 50 on March 9.

Today sees a deluge of global macro data, beginning with multiple European Consumer Price Inflation readings from 7:45am onwards. France kicks off proceedings, with the monthly figure retreating into negative territory while accelerating annually, a scenario expected to be mirrored in Spain.

Provisional headline Eurozone CPI is seen advancing to 1.5% YoY from 1.1% previous, although the core metric - the one ECB chief Mario Draghi and colleagues consider more important - is seen flat. Shortly before the EU inflation release, UK Mortgage Approvals at 9:30am are seen increasing from 67.5K to 68.9K in December, while Net Consumer Credit falls by £0.3B to £1.7B but mortgage lending holds up at £3.2bn. Watch the Retailers and Housebuilders.

This afternoon, US Employment Cost Index is forecast steady at 0.6% while House Price growth decelerates marginally both monthly and yearly. If confirmed, this could suggest the Trump reflation trade is waning. The Chicago PMI is seen advancing to 55.0 from 53.9 previously, while Consumer Confidence edges back from 113.7 previous to 112.9 in January.

Speakers of note today include the aforementioned ECB President Draghi at 8am, while his colleagues Mersch and Coeure both speak this afternoon. The Fed also prepares to meet while we prepare for results from the likes of Apple, Mastercard, Pfizer, UPS, Xerox, Exxon Mobil and Andarko Petroleum. 

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

• Severn Trent Says Trading In Line With Expectations After Strong Quarter
• SSE Reiterates FY Adjusted EPS Guidance
• Shell to Sell Package of UK North Sea Assets to Chrysaor for $3.8B
• Cambria Africa PLC FY17 Trading Update Leads to Open Offer Extension
• Britvic Makes Strong Start to Fiscal 2017
• Polymetal Lifts Stake in Copper Deposit License Holder to 100%
• Profits rise at UK online supermarket Ocado, no update on overseas deal
• UK energy supplier SSE loses another 50,000 customers
• SSE sees 2016/17 capex of about 1.75 bn stg
• British Land says 7 Clarges Street office over 80 pct let
• Wood Group secures new contract with Hess in Malaysia
• Charles Stanley says client funds at 22.7 bln stg at end – Dec.
• Britvic says Q1 revenue up 4.3 pct
• Shell sells Thailand gas field stake to Kuwait's Kufpec for $900 mln
• Carpetright returns to quarterly sales growth in the UK
• FCA hands Deutsche Bank record 163 mln stg fine for Russia trades
• Vodafone Qatar posts narrower Q3 loss as revenue rises
• Jaguar Land Rover shelves India small SUV project – Economic Times
• Gold rises as Trump policy fuels safe – haven demand
• Copper edges up in holiday – thinned trade as dollar drops
• Oil prices fall as rising U.S. output offsets OPEC – led cuts.