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

UK 100 Index called to open +10pts at 7440, holding a 2-week uptrend, pushing recent highs, but still within a 7400-7450 3-day range. Bulls hope this is merely consolidation before another attempt at fresh record highs; Bears have spied a 36-hour bearish rising wedge whilst on the lookout for waning momentum and/or the index becoming overbought. Bulls need a break above 7448; Bears require a breach of 7420. Watch levels: Bullish 7450, Bearish 7420

Calls for a positive open come in spite of a poor close on Wall Street (ex-Tech) last night and a mixed showing from Asia overnight. The UK Index is bid thanks to a weaker GBP (Brexit negotiation uncertainty), despite the US Dollar giving up much of yesterday’s gains overnight (FBI dealing Trump a blow). Germany’s DAX, however,  outperforms, even as the Euro trades its strongest versus the Dollar since early February, after last night’s French Presidential debate in which independent centrist Macron fared well versus controversial Fillon and Le Pen although the electorate remains split.

Japan’s Nikkei underperforms on its return from a long weekend as a weaker USD strengthens the Yen, to the detriment of exporters, while the Financial sector is weak. Australia’s ASX is also down, but only just, as an oil price bounce helps the commodity space and Chinese regulatory delays help select corporates. China and Hong Kong outperform.

US equity markets began the new week mixed, as outperformance from the Nasdaq led the Tech-heavy index to a fresh intraday high, while the Dow Jones and the S&P500 both edged lower. The former couldn’t be helped into positive territory despite Apple also reaching a record high, with Home Depot and Goldman Sachs contributing most losses, while financials also weighed on the S&P.

Crude Oil prices have attempted overnight to build on a bullish reaction to reports that OPEC could consider extending its production cut agreement beyond June should global stockpiles remain above the 5-year average, as per the Saudi oil minister, helped by another dose of US dollar weakness. Today’s focus will be tonight’s API industry data for further signs of increasing US production, as Brent crude looks to regain its $52 handle while US crude continues towards $49.50 and beyond.

Gold has fallen sharply overnight as the precious metal failed to overcome $1237 resistance. This comes despite the US dollar remaining in a weak position, suggesting some investors engaging in profit taking after the safe-haven asset’s strong rally after the US Fed’s meeting last week. Having found rising lows support at $1227, investors remaining long will be hoping for a quick challenge of $1231 resistance before a return to $1237.

In focus today will be the latest UK Inflation reads. CPI is seen rebounding in Feb (0.5% vs. -0.5% in Jan) to accelerate the annual pace of price growth above the Bank of England’s (BoE) 2% target (2.1% vs. 1.8%), continuing an upward march since last April fueled by a Brexit weakened GBP.

Even Core UK CPI is expected to have crept closer to the 2% target, up to 1.8% following a 2-month plateau at 1.6% which will give rise to concern about potential for future rate hikes if sustained, echoing BoE dissenter Kirsten Forbes comments last week. RPI is seen closing in on an annual 3.0% while PPI moves up from 3.5% to 3.7%. DCLG House Prices will be looked to for any changes on last month’s 7.2%, which could influence Housebuilders’ shares.

BoE Governor Carney speaks alongside the Fed’s Dudley to speak at  panel discussion of the Banking Standards Board (“Worthy of Trust? Law, ethics and culture in banking”) which takes place at the BoE. The Fed’s George  speaks in Washington about the “US economy and Fed” at a Women in Housing & Finance event just before the European close while colleague Mester talks about outlook and communications at the Uni of Richmond, Virginia after the US close.

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

• London copper hits 1 – week low as talks resume over Chile strike
• Shell to drill new wells by end – 2018 to shore up Australia gas supply
• UK's gaming firm 888 to pay special dividend as 2016 profit jumps
• Faroe Petroleum posts FY pre – tax loss of £61.5m
• BP awards Schlumberger contract for a Gulf of Mexico project
• EnQuest reports small rise in annual profit despite weak oil price
• Builder Bellway to raise dividend as half – year profits rise
• Mears Group says full – year revenue up 7%
• Goals Soccer Centres posts FY pre – tax profit of £3.7m
• Independent Oil and Gas announces board changes
• Gold slips on technical selling; Fed stance lends support
• Dollar slips on doubts Fed will speed rate hikes, euro edges up
• BHP Billiton announces final results of BHP Billiton Bond Repurchase Plan
• Oil prices rise on talk that OPEC could extend supply cut