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

UK 100 Index called to open +15pts at 7315, extending Friday’s 7250 bounce and having tested 7320 overnight. This takes it a step closer to regaining last month’s 7365 all-time highs, but Bulls likely want to see 7325 cleared for fresh 1-month highs before getting too excited. Bears likely want to see rising support around 7310 give way, if not a breach of Friday’s 7300 close. Watch levels: Bullish 7325, Bearish 7305.

Calls for a positive start to the new trading week, one without the US today on account of President’s Holiday, come after US bourses closed positive on Friday and despite a mixed session in Asia overnight. While the UK Index is called higher this morning, note Kraft-Heinz has withdrawn its offer for Unilever, news which helped the latter rally over 13% on Friday and contribute over 24pts to the index which gained only 22pts itself.

Whilst Asian markets have failed to be derailed by the above news, existing USD strength from Friday’s bounce has helped Japan’s Nikkei post gains via a weaker JPY. Further benefit comes from more M&A, after reports that telco Softbank (which acquired the UK’s ARM) may approach T-Mobile US about a potential merger with US Sprint in which it holds a majority stake.

Australia’s ASX is the long underperformer, posting small losses in response to some disappointing corporate reporting and despite buoyant oil prices in the face of rising US production and metals starting to show a bit more life again for the Miners.

US equity markets managed to begin their long weekend at record highs, but only just, as a late rally gripped Wall Street. The Dow Jones closed only 4 points higher as gains for Verizon, Boeing and Home Depot helped to offset losses for UnitedHealth, while the Telecoms sector outperformed to help the S&P 500 strengthen by 0.2% and the Nasdaq by 0.4%.

Despite the Baker Hughes Rig Count increasing for a fifth straight week on Friday to a 16-month high, Crude Oil prices have climbed steadily higher overnight as the USD softens in Asian trading. Investors will continue to weigh up the impact of rising US production in offsetting OPEC’s cuts, however reports showing record compliance by the cartel’s members is helping to keep prices supported.

Gold remains in a sideways channel, holding steady at $1234 support as the US dollar rally falters overnight. This comes after Friday’s sell-off from $1244 as US Federal Reserve Chair Janet Yellen once again showed her hawkish hand, prompting a greenback rally while demand for the non-yielding precious metal declined. With no Fed speakers scheduled today on account of the US holiday, investors will have to wait until tomorrow for any further comment from the States’ central bankers.

In focus today, one likely to prove quiet on account of President’s Day holiday in the US, is likely to be a combination of withdrawal of Kraft-Heinz Bid for Unilever and any sound bites from the first of a 2-day second reading of the UK Brexit Bill in the House of Lords (Upper house), where over 190 are set to participate, highlighting the bill’s significance.

The EU’s Tusk and US Vice-President Pence speak at 10am, the later having offered diplomatic rhetoric at the weekend’s Munich Security Conference meeting, helping counter some of his Boss’s more aggressive chat since taking office.

Data wise, releases are limited to UK CBI Trends Orders, seen holding positive for two consecutive months for the first time since 2015, while Selling Prices will look to better last month’s 28 mark driven by a weaker GBP. Eurozone Consumer Confidence is seen marginally lower at -4.8 after January’s 2-year best reading of -4.7.

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

• Interserve more than doubles provisions for loss to £160m
• UK builder Bovis posts profit fall, to build fewer homes
• Builder Bovis says pre – tax profit to fall in 2017 along with volumes
• Petra Diamonds H1 revenue rises, forecasts stable conditions for H2
• Hammerson full – year NAV rises
• Vedanta Resources Plc third – quarter core earnings rise
• AstraZeneca sells U.S. Zoladex rights to tersera
• Supply concerns push London copper above $6,000 per tonne
• RBS takes £750m provision for new Williams & Glyn sale plan
• Centrica announces outage at UK's Rough gas storage site on Feb. 20
• Morgan Stanley says cheap momentum positive signal for BHP, Origin Energy, ANZ
• Amazon to create more than 1,500 jobs in France this year
• Gold prices steady, focus shifts to timing of US rate hikes
• Oil rises, but U.S. drilling drags on prices