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

UK 100 Index called to open +20pts at 7285, extending yesterday’s rally and break back above 7255, embarking on the second leg of a bullish flag pattern towards last week’s highs of 7345. An overnight re-test of 7255 bodes well in terms of confirming the level’s reversion to support. And while the hourly RSI is overbought, this is not the yet the case for longer-term charts. Bulls need a break above 7287 overnight highs; Bears are watching for a breach of rising lows around 7270 but really require a breach of that now pivotal 7255 level. Watch levels: Bullish 7290, Bearish 7270.

Calls for a positive open come after US bourses put on over 1% amid a French election inspired relief rally and Asian counterparts (Ex-Australia + NZ for holidays) followed suit, extending their positive start to the week, risk appetite fueled by rising optimism about a tax reform announcement from Trump tomorrow that could revive the US reflation trade and global rally.

Japan’s Nikkei is helped by fresh Yen weakness overnight (despite BoJ governor Kuroda talking about simulation of stimulus exit) along with another bounce by Oil, albeit still technically in a downtrend, helping Energy. In spite of Australia’s ASX absence for ANZAC day, note industrial metals Copper and Iron Ore are higher while precious metals are off their overnight best in spite of yet more sabre-rattling from North Korea.

US equity markets rallied on Monday in reaction to the favourable French election result, with Financials regaining some of the swagger that had previously helped them lead US bourses to all-time highs. All three major indices closed over 1% higher, although the Tech-focused Nasdaq took the plaudits, rising to fresh intraday and closing highs. The Dow Jones closed over 200 points higher, steered by Banking behemoths Goldman Sachs and JP Morgan, while the Financial sector as a whole led the S&P500.

Crude Oil prices, having traded at their lowest level in April, are recovering in earnest, although now face pressure from falling highs resistance and a stronger US dollar overnight. As a lack of OPEC production cut extension rhetoric on Monday resulted in a  6th straight session of declines, Brent Crude has fallen below $52 for the first time since 29 March, while the US benchmark failed to retain a $50 handle. Should tonight’s API inventory data confirm rising US production levels, both benchmarks could face renewed bearish headwinds.

After starting the week sharply lower, Gold has since begun trading in a tight $1268-1278 range, unable to show either bullish or bearish bias as investors await the next driver for the precious metal. Having bettered Monday’s highs overnight, touching $1278, the yellow metal has since sold off to the mid-range of its trading channel on the back of US dollar strength, testing weak support at $1272.50.

In focus today will be continued build up to the second round of the French Presidential election as well as our edging closer to what Trump has billed as a ‘massive Tax cut plan’ on Wednesday.

Note US earnings season continues at breakneck speed as a sixth of all Dow Jones components - 3M, Caterpillar, Coca Cola, DuPont and McDonald’s - publish their Q1 report cards.

Macro data this morning includes March UK Public Finances with net borrowing set to continue to rise following January’s seasonal drop on corporation tax receipts and accounting revisions.

This afternoon, House prices data from US FHFA and S&P/CS Core Logic at 2pm may see the former holding flat around break-even, its weakest in 5 years. The latter, however, may deliver solid gains in February, maintaining its annual pace of growth.

Thereafter, US Consumer Confidence may have given up ground in April along with US New Home Sales (back from Feb’s 5-month peak) and the Richmond Fed, the latter seeing a 7-month recovery trend scuppered, echoing disappointments from Chicago and Dallas yesterday.

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

• Virgin Money gross mortgage lending slips in the first quarter
• St James's Place says Q1 net inflows £2bn
• Amec Foster Wheeler reports bigger – than – expected FY pretax loss of $542m
• Premier Oil announces refinancing update
• Petrofac says secured a series of contract awards worth more than $70m
• UK's CMA accepts undertakings in Menzies – BBA Aviation deal
• UK's Carpetright nudges profit forecast down as market deteriorates
• Tullow Oil announces results of rights issue
• Virgin Money Q1 gross mortgage lending £2bn, slips in the first quarter
• Whitbread says full – year underlying profit before tax up 6.2%
• Gold eases in French election afterglow; safe – haven demand supports
• Copper eases as French euphoria fades
• Oil edges up after 6 days of straight losses