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

UK 100 Index called to open 5pts at 7190, rebounding from 7160 to break above 7180 overnight. This opens the door for recovery to yesterday’s 7225 fakeout highs, keeping alive an accelerated Feb uptrend. Bulls want to see 7200 cleared to build confidence in another leg higher. Bears likely need to see overnight rising lows at 7175 breached. Watch levels: Bullish 7200, Bearish 7175.

Calls for a positive open come after a cautiously positive US close and solid gains in Asia overnight although held back by Energy names weighed on by a surprisingly large US API oil inventory build and fears that US shale production increases will outweigh OPEC cuts.

Geopolitical and economic fears also persist in the run-up to multiple elections in Europe and with a US President both lighting and fighting fires, helping usher Gold back to 3-month highs and encourage investors to take a fresh look at bonds.

Japan’s Nikkei is higher thanks to a weaker Yen versus the Dollar as the Greenback recovers from overnight lows to push the Japanese currency back, the BoJ trying to maintain its policy stance without giving Trump ammo for accusing it of manipulation before a meeting with Abe. US inventories nonetheless hampering Energy names, the same being true on Australia’s ASX.

US equities closed higher overnight despite falling oil prices once again weighing on Energy names, as the Dow Jones and Nasdaq posted fresh intraday all-time highs shortly after market open while the S&P 500 finished within single digits of a fresh all-time high.

Boeing and IBM led the Dow Jones higher (+0.2%) while the tech focused Nasdaq also finished 0.2% higher for a fresh all time high close. Note Disney reported an earnings beat after hours. The S&P was the regional underperformer, closing only marginally higher (+0.02%) on account of Energy weakness, meanwhile, despite topping both earnings and sales forecasts, General Motors fell as investors worry that the auto sales may have peaked in the US.

Crude Oil prices have taken another leg lower, as US industry (API) inventories yesterday evening showed a build of 14.2m, 11m more than expected, reigniting concerns that US crude production will offset OPEC’s attempt to redress global oversupply. Despite Brent and US crude mounting a steady overnight recovery from lows of $54.50 and $51.20 respectively, this afternoon’s official DOE EIA Crude Inventories (3:30pm) could see prices fall to fresh two-month should it mirror the API data.

Gold has fallen back to the bottom of its $1230-$1236 overnight  trading range, having been unable to overcome the latter mark for the third time this week. Fresh safe haven demand amid heightened political uncertainty is helping to offset the downward pressure of a stronger USD, while any weakness in the latter could spur the precious metal to fresh 3-month highs keeping the bullish flag pattern alive.

In focus - top tier data distinctly lacking today - will likely be US Oil inventories (3.30pm) after last night’s API data suggested a huge 14.2m barrel build (vs +2.5m est), putting pressure on US and Brent Crude prices overnight, with a knock-on to global risk sentiment. Another big build would add to last week’s disappointment and an uptrend since Christmas, reinforcing concerns about rising US shale production overpowering OPEC cuts.

Until then we’ll have to make do with December Spanish Industrial Production (8am) which has potential to echo Germany’s disappoint yesterday, especially after November’s jumped to a 3-month high. India is expected to cut interest rates by a quarter point and US Mortgage Applications may give an idea about the US housing market.

While we have the BoE’s Cunliffe (1pm) speaking today after the hawkish Forbes yesterday we also have the final day of Parliamentary debates on Article 50 amendments. Having defeated a tight vote on a Labour motion requiring the PM to return to the EU negotiating platform if no deal is reached, the Government is expecting to see the final vote on the amended bill pass without incident.

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

• Confident Rio Tinto hands back cash as iron ore booms, says full – year net earnings $4.62bn
• Rio Tinto CFO says would like to see more debt reduction
• Hargreaves Lansdown H1 profit buoyed by equity trading after Brexit vote
• Hargreaves Lansdown says H1 pretax profits up 21% year – on – year
• Homewares retailer Dunelm raises interim dividend, says HY sales up 2.8%
• AVTECH and easyJet agree on way forward for Aventus NowCast
• Playtech and Warner Bros sign film and television content deal
• Grainger reports total LFL rental growth of 3.4% year to date
• Tullow in the red for third year on further exploration write – offs
• UK property firm Capital & Regional announces top management changes
• Victrex says comfortable with full – year 2017 expectations
• WS Atkins reports in – line trading for Q3
• AA trading in line, paid memberships return to growth
• London copper rises on impending strike at world's top mine
• Gold slips from 3 – month highs on dollar strength
• Oil prices slump on bloated U.S. fuel inventories, stalling China demand