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

UK 100 Index called to open +10pts at 7285, having traded sideways 7275-7290 overnight into the apex of a narrowing pattern. Bulls need a break above 7290 to overcome 2-day falling highs resistance and revive hopes of a rally back to 7365. Bears require a breach of overnight rising lows at 7280 to open the door for a drop to support at 7250. Watch levels: Bullish 7295, Bearish 7275.

Calls for a firm open come after US bourses posted a solid return from a long weekend. Helped by corporate results, fresh record highs come via continued investor optimism about Trump policies that has now kept the S&P 500 Index from anything worse than a 1% fall for more than 90 days. A stronger USD suggests expectations of hawkish Fed minutes banking up this view this evening. DAX called to open +0.3% thanks to a weaker EUR.

Bullishness has been echoed in Asia overnight with only Japan’s Nikkei spoiling the party, flirting with breakeven on account of a slightly stronger Yen. Hong Kong is outperforming despite a continued drag from HSBC’s disappointing results yesterday. Australia’s ASX is higher thanks to a buoyant oil prices offsetting weakness among metals while retail sector results buoy and China property price growth maintains confidence.

UK Index sentiment may be impacted by Lloyds Banking Group results which appear to have beaten at the underlining profits before tax level (highest in 10 years; lower PPI) and the dividend being increased. Housebuilder Barratt Developments says it is confident with its FY outlook thanks to forward sales +17% and has announced special dividends of £175M for both Nov 2017 and Nov 2018.

Having enjoyed a long weekend, US equity markets continued where they left off, with the four major bourses of Wall Street all notching fresh record closing highs as corporate earnings once again impressed. The Dow Jones rallied 0.6% as Retail names Home Depot and Wal-Mart reported positive FY earnings, while the S&P also closed 0.6% stronger as all 11 sectors represented on the index finished firmer. The Nasdaq finished 0.5% higher and the small-cap Russell outperformed, up 0.65%.

Crude Oil prices broke out from 2017 falling highs resistance yesterday morning, as optimism that OPEC’s production cut is effectively rebalancing the supply glut saw fresh bullish sentiment in the marketplace. However, US dollar strength in the face of the Euro at 6-week lows could see potential investors deterred as the relative value of both Brent and US crude decrease.

Gold, having recovered from a one week low of $1226 yesterday, was unable to overcome weekly high of $1238, further hampered by a trend of falling highs resistance that began on Friday. While political tensions in the US and Europe - most notably France - may harbour fresh demand for the safe haven asset, emergent US dollar strength today (Fed minutes this evening could be a key influencer) may see the precious metal test support at $1233.

In focus today will be UK Q4 GDP (9.30am) for which the second estimate is seen unchanged at 0.6% QoQ for a third straight quarter and 2.2% YoY for the second quarter in a row as the Index of Services and Business Investment both cooled into the end of last year.

Fed Minutes may also garner a smidgen of attention this evening given the hawkish rhetoric from the central bank of late (“unwise to wait to long”) and decent US data, although political uncertainty could yet play a part in delaying, even scuppering, plans for multiple hike stateside interest rate hikes this year.

Elsewhere this morning German IFO surveys (9am) may show all three components edging back again in February. The final reading for January Eurozone Consumer Price Inflation (CPI) is forecast to show a monthly figure plunging following last month’s jump while an annual jump is confirmed and the core print holds firm, albeit still well below the ECB’s 2.0% target.

This afternoon the China Leading Economic Index may add to this morning's solid property prices data to give us an update on the state of play in the world’s #2 economy, before US Existing Home Sales are expected to show an increase in January after December’s fall to add to the message of solid US consumer confidence.

Speakers today include the Bank of England’s (BOE) Cunliffe (11am) followed by his colleague Shafik (11.30am) before this evening sees the Fed’s Powell (6pm, voter, neutral) tee us up for the Fed Minutes (7pm)

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

• US oil holds near 7-wk high; OPEC upbeat on output curbs
• UK Barratt Developments' first – half profits rise but builds fewer homes
• Airbus CEO says Pratt & Whitney needs to improve on A320neo engine
• Metro Bank posts 64% growth in FY asset growth year – on – year
• HSBC to start share buy – back of ordinary shares
• McBride posts H1 pretax profit £18.8m
• Amazon introduces latest generation fire TV stick in the UK, Germany, and Japan
• Capital & Counties Properties records FY EPRA net asset value per share of 340p
• Serco's full – year trading profit falls 14%, outlook unchanged
• Unite Group posts FY adjusted EPRA earnings up 24% to £61.3m
• Staffing firm Hays reports 3 % rise in H1 net fees
• Weir reports 22% fall in FY pretax profit on weak oil market
• Weir Group appoints Geetha Dabir CTO
• Lloyds profit hits 10 – year high as bank approaches full recovery
• Petrofac reports FY net profit of $463m
• BBVA agrees to buy 9.95% stake of Turkey's Garanti Bank
• Hotel Chocolat first half profit rises 28%
• Australia's Woolworths' first half sales growth improves, but EBIT is still falling
• Diageo's India business centre could serve 70 global markets – Economic Times