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

UK 100 Index called to open +15pts at 7295, having rebounded from 7260 overnight for an unsuccessful re-test of yesterday’s 7315 breakdown. With the level having since turned resistance, the index has fallen back towards 7300 under the weight of falling highs since yesterday mid-morning. Bulls and Bears require breaks above and below 7315 overnight highs and 7295 lows, respectively. Watch levels: Bullish 7320, Bearish 7290.

Calls for a positive open come in spite of a negative US close and a mixed bag from Asia overnight as fixed income rallied on event risk (Trump-Xi meeting, Fed minutes, US Non-Farm payrolls), all the while markets continue to re-evaluate the validity of the Trump trade.

Note South Africa’s Rand has taken another dive overnight after S&P cut the country's sovereign credit rating to junk in light of recent political upheaval. Keep an eye on the likes of UK Index -listed Old Mutual, Investec and Mondi which are all exposed to the currency and have been troubled of late as a consequence.

Japan’s Nikkei underperforms, hindered by further Yen strength (vs USD, GBP and EUR) hurting exporters while Toshiba shares dropped another 10% on reports it may need financial assistance and miss yet another results reporting deadline. Down under, Australia’s ASX is in the red. Of note are materials names positive in spite of Copper having taken another leg lower and Oil breaching its rebound uptrend.

US equity markets began Q2 by closing lower on Monday, albeit finishing well off session lows as a macroeconomic data deluge gave investors plenty to digest. The Dow Jones outperformed, rallying to close only 0.1% lower as UnitedHealth led risers, while the S&P 500 closed lower as seven sectors finished weaker, led by Consumer Discretionary names. The tech-focused Nasdaq at one point reached a fresh intraday all-time high, although eventually underperformed peers, down 0.3%.

Crude Oil prices have come under fresh pressure as a Libyan production recovery following recent disruption saw the sell-off from Friday's 3-week highs continue. A US dollar rebound this morning is also adding to bearish sentiment in the market for crude, which is seeing US Crude test the key $50 support level while global benchmark Brent hovers marginally above $52.80.

Gold has finally overcome 9-month falling highs resistance as it rallies back above $1255/troy oz., reaching a fresh 1-week high as geopolitical concerns come to the fore. A weak US Manufacturing PMI print raised fresh concerns that the US Federal Reserve may not stick to its hawkish forecasts for three rate hikes over the course of 2017, seeing the non-yielding safe haven asset subsequently benefit.

Data in focus today includes Eurozone Retail Sales, forecast back to growth in Feb, having been negative since October. Annually however, growth likely edged back to its slowest since September.

This afternoon we have ISM New York and Durable Goods Orders (both no consensus) while Factory Orders are expected slightly slower for a second month in a row and IBD/TIPP Economic Optimism continues to turn down from February’s 10/11yr peak.

Speaker-wise, ECB President Mario Draghi headlines as he launches the new €50 note in Frankfurt at 2:30pm, while colleague Liikanen speaks about post-crisis financial regulation at 3pm. This evening the Fed’s Tarullo, who retires tomorrow, delivers “Departing Thoughts” and a Q&A at Princeton University (9:30pm).

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

• Provident Financial updates guidance for medium – term potential of its businesses
• Topps Tiles says H1 revenue of £106.5m
• Laird says received acceptances for 95.5% of new shares offered
• Asos raises full – year sales forecast after strong H1
• Bowleven plc announces termination of strategic review
• Nanoco Group reports H1 pre – tax loss of £6.4m
• Ryanair says March traffic grows 10% to 9.4m customers
• Bunzl says acquired 2 safety businesses in U.S. and Italy
• Standard Chartered to double minimum wealth for private bank clients- FT
• London copper treads water with China on holiday
• Libya output return weighs on Crude Oil
• Shell's Wetselaar says LNG contract destination clauses “not really crucial”
• Gold hits 1 – week high on geopolitical worries, weaker dollar