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

UK 100 Index called to open +5pts at 7280, holding a trend of falling highs since Wednesday’s Feb peak which, along with 5-day rising lows, means a narrowing pattern into 7270. Bulls want to see falling highs at 7280 overcome to open the door for a rally back to 7300. Bears need overnight lows at 7273 give way so the index can fall back to test support at 7265. Watch levels: Bullish 7285, Bearish 7270.

Calls for tepid European start to the final session of the week come after a mixed close on Wall street as the Trump trade appeared to lose steam into a long weekend following a record run and a lively Presidential press conference. This morphed into a down day for Asia overnight. This despite the USD finding support to quell yesterday’s currency strength hindrance among peers (GBP, EUR, JPY) that hampered equity sentiment yesterday..

Japan’s Nikkei is underperforming despite welcome Yen weakness, but beware a potential USD/JPY bearish flag that could mean the Yen set to strengthen again meaning a fresh headwind. Declines for Toshiba (troubled nuclear business) and Softbank (US acquisition being badly digested) are clearly outweighing any currency benefit.

Australia’s ASX is struggling with 5800 as base metals prices hinder miners (copper, zinc and lead continuing to give up ground, aluminum peaked) and Oil looks undecided as US production and inventories rise but talk of deeper OPEC cuts keeps the recovery story alive.

The winning streak for US equity markets came to an end yesterday as the S&P 500 and the Nasdaq edged back from Wednesday’s highs, although the blue-chip Dow Jones narrowly avoided breaking its run of closing highs. The Energy sector weighed across all indices, leading both the S&P and Nasdaq 0.1% lower, while Cisco outperformed having reported Q2 earnings, helping the Dow to close 0.05% stronger.

Crude Oil prices have recovered from yesterday afternoon’s sell off based upon US production concerns, to trade slightly stronger overnight. Brent is bouncing from one month rising support as it looks to mount a fourth challenge of $56.20 resistance this week, while US Crude is already challenging resistance at $53.50 having recovered more strongly than its global counterpart.

Gold price has been boosted by the weaker USD dollar, although was unable to overcome last week’s highs of $1245 overnight as the greenback managed to find support. FX movements again are likely to act as a catalyst for further price movements as the precious metal looks to post its third consecutive weekly gain.

In focus today - another light one for macro data - will be UK Retail Sales growth, forecast to have rebounded to positive in January although the annual pace likely continued to slow from October’s 10yr peak. This would add to hotter inflation data and slower wages growth earlier in the week, suggestive of a weaker GBP beginning to bite via higher import prices.

Meanwhile, day two of the G20 meeting of Foreign Ministers (Bonn, Germany) may elicit further commentary as US Secretary of State Rex Tillerson finds his feet within the diplomatic arena. In Berlin, German Chancellor Merkel will host Canadian Prime Minister Trudeau at a joint conference shortly after midday.

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

• AstraZeneca reports positive results from breast cancer drug trial
• Kingspan CEO says may be a lag in passing on higher costs
• Kingspan FY trading profit up 33%, says outlook encouraging
• BP to shut Kwinana refinery in Australia for turnaround
• Australia's BHP Billiton, Rio Tinto fall as iron prices drop
• Enquest: Kraken FPSO in field and hooked up
• Unite Group sells 13 student properties for £295m
• Gold steady on weaker dollar, set for third week of gains
• Segro says FY pretax profit falls to £426.4m
• Essentra reports 9% drop in FY LFL sales
• Italy's Mediaset, Sky in advanced talks over pay – TV unit sale
• Copper prices edge up on supply worries, weaker dollar
• Oil firms as OPEC floats extended output cut; markets still bloated