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

UK 100 Index called to open flat at 7175, unmoved from yesterday afternoon’s 7165-7185 sideways range. Both bulls and bears need to see a break beyond their current confines to open the door for either a rally back to end-Jan highs of 7210 or a sell-off to 7130 where 3-month rising support resides. Bulls need the index to trade 7185 or better, while Bears need to see 7160. Watch levels: Bullish 7185, Bearish 7165.

Calls for a flat open come after small losses in the US last night and another mixed session in Asia overnight as investors continued to plump for bonds over equities amid political uncertainty. Base metals (dollar denominated) remain under pressure from the US Dollar rallying back to fresh Feb highs while Oil prices have given up a $1/barrel from recent highs. The commodity space may be hindered by the USD rally, but the UK Index may benefit from persistent reciprocal GBP weakness.

Japan’s Nikkei is in the red as a stronger US Dollar weighs on Oil prices and Energy names while safe haven seeking (Gold rallying) benefits the Yen (hindrance to exporters) in spite of USD strength (they often move inversely). Australia’s ASX is the lone outperformer having recovered from initial losses (financials, energy) to trade with small gains after the RBA left rates unchanged, citing global economic improvement, and a precious metals advance helped offset losses for base and Oil.

Wall Street closed yesterday nursing minor losses, as rising concerns surrounding the implementation of Donald Trump’s pledge to pump a $1tn fiscal stimulus in the US begin to weigh on investor sentiment, while falling Oil prices hurt Energy names. The Dow Jones closed 0.1% lower as Tech strength could not offset losses in the Retail sector while the S&P 500 underperformed, down 0.2%, as aforementioned Energy names weighed on the index. The Nasdaq was the best performer of the day, however was still 0.1% lower at US market close.

Having fallen significantly yesterday (Brent -1.8%, US -1.4%), paring last week’s gains made onhopes of increased Iran sanctions by the US, Crude Oil prices have halted the sell off after finding some support. However, should the US Dollar continue to rise further bulls may struggle to justify investment ahead of tonight’s industry-produced US inventories data.

The Gold rally remains alive, having reached a fresh 3-month high yesterday despite the US Dollar rising marginally. Yesterday’s 1% gain for the precious metal has signalled the emergence of a bullish flag pattern following a breakout from $1220 resistance which, if completed, could see Gold top the $1270 mark for the first time since the US Presidential election.

In focus today, will be UK Halifax House Prices (8.30am) given the bearing that the UK’s housing market has on consumer confidence coupled with plans for a new £3bn government and tweak of planning laws to solve the housing shortage. Watch for reaction in share of from UK Housebuilders.

Thereafter, today’s US data is limited to the US Trade Balance (1.30pm), the deficit seen unchanged in December, while JOLTS Job Openings will give us an additional piece of evidence about the state of the US Jobs market.

Speakers today include the BoE’s Forbes, whose remarks from a visit to Yorkshire & the Humber will be released at 2pm. After the European close (4.35pm) Jens Weidmann wears both hats (ECB Governing Council Member + Bundesbank President) to lecture German entrepreneurs on the prospects of the German/European economic prospects.

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

• BP expects OPEC cuts to have limited impact on output
• BP misses forecasts as annual earnings slide for second consecutive year
• Paysafe Appoints Oscar Nieboer as Chief Marketing Officer
• Builder Bellway says on track to build more homes
• DCC sees FY earnings in line with market expectations
• New Look says expects UK trading conditions to remain challenging
• Genel says received payment for Tawke oil exports from KRG
• Diageo may need to make open offer to United Spirits' shareholders – Economic Times
• Deutsche Boerse says clears CEO after analysis of talks with LSE
• Oil firm DNO books $35m payment from KRG
• Rentokil buys Allgood Pest Solutions
• Playtech buys Eyecon for up to £50m
• London copper drifts as dollar revives on hike timeline
• Oil prices firm, but kept in range by mixed price signals