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

UK 100 Index called to open -20pts at 7265, having eased back overnight for a successful re-test of key 7255 support. Holding its 2-day sideways channel bodes well for another up-leg following natural consolidation of Monday’s sharp rebound. However, limited overnight progress from the channel floor keeps a breakdown within reach should sentiment deteriorate. Bulls need a break above 7270; Bears require a breach of 7255. Watch levels: Bullish 7270, Bearish 7255.

A negative opening call comes after US bourses closed lower, disappointed with an underwhelming Trump tax announcement, and Asian stocks had a lacklustre session overnight as a consequence. Nice ideas, but far from a done deal, merely adding to investor frustration about the lack of progress on all those pledges that helped fuel risk appetite and markets to recent highs.

Japan’s Nikkei is under water in spite of a weaker Yen (BoJ policy unchanged, but growth outlook upgraded). Energy sector still under pressure from oil prices around recent lows after mixed US inventory data, and uncertainty about the global outlook for demand and production. Australia’s ASX is just the right side of break even in spite of Energy weakness from the government restricting  gas export restrictions and oil under pressure while Metals remain range-bound.

Lloyds Q1 results look to be a beat across the board, benefiting from lower conduct costs and the UK economy holding up in the face of Brexit. Schroders posts increased assets under management. Persimmon made a good start to 2017, Taylor Wimpey says “positive customer demand and good mortgage availability is supporting a strong sales rate”.

AstraZeneca profits fell as it fights declining sales of its cholesterol blockbuster Crestor now that the patent has expired and Travis Perkins says Q1 sales rose but trading conditions looks mixed for the rest of 2017. Weir Group is on track to achieve full year profits in line with current market expectations.

US equity markets slipped as Trump’s tax proposals disappointed investors, dashing hopes that the President’s economic council would offer some surprises alongside the preannounced tax plan. The Dow Jones closed 0.1% lower, as disappointing Q1 figures for Procter & Gamble offset gains from Verizon and United Technologies, while the S&P 500 closed just over a point shy of breakeven and the Nasdaq once again outperformed, closing flat around recent record highs.

After initially rallying to test week long falling highs resistance, Crude Oil prices pared gains after the release of official US government inventories yesterday to hover above support at $51.50 and $49 for Brent and US benchmarks, respectively. Despite a larger than expected drawdown in headline crude stocks, greater than expected builds in both Gasoline and Distillate stocks more than offset the bullish crude inventory figures, raising yet more concern about rising US production levels.

Gold rallied yesterday as Trump’s tax reform announcement disappointed visitors, however after the Bank of Japan updated its growth forecasts to show improved growth in the economy, the interest rate sensitive safe-haven asset has pared its gains. An early test of $1265 support will provide an indication of investor sentiment, with support at $1260 and resistance at $1270 eyed as the next significant trading levels.

In focus today will be fallout from Trump’s tax announcement, having disappointed by being merely a proposal framework and still facing the same Congressional hurdle (deficit hawks on both sides of the aisle) that he was unable to clear with Healthcare reform.

In the afternoon, expect no change to ECB interest rates but the QE bond buying stimulus programme is set to be trimmed from €80bn to €60bn per month. The real meat on the bones, however, will surely come from President Draghi’s 1.30pm press conference; all eyes on the tone of his message (and answers to journalists) regarding improving Eurozone macro data versus French election risk, and what it means for the future of its still highly accommodative monetary policy.

Data of note today includes Eurozone Confidence figures (10am), although little change is expected in April, while UK CBI Retail Sales give up ground. German Consumer Price Inflation is seen falling in April, but recovering some of its lost ground on an annual basis, back near the ECB’s 2.0% target.

This afternoon, US Durable Goods Orders are forecast to have continued slowing in March, although remaining solid on an ex-transport basis while Pending Home Sales normalise after a very strong February. After the Richmond Fed surprised to the upside yesterday, there is potential for Kansas to do the same, at odds with recent disappointments from Chicago and Philadelphia.

Results-wise, US earnings are expected from big guns Alphabet, Amazon, American Airlines, Dow Chemical, Expedia, Ford, Intel, J&J, Microsoft, Starbucks, Under Armour and UPS.

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

• Aggreko says Q1 revenue up 2%
• Mediclinic announces Abu Dhabi regulatory update
• Taylor Wimpey says had a good start to 2017
• Plus – size clothing company N Brown says markets to remain tough
• Lloyds bucks expectations of post – Brexit dip as Q1 profit holds up
• Lloyds bank CEO says does not expect any rate hike in 2017
• Weir Group says full year profits to be in line expectations
• Weir Group's Q1 orders rise as drilling activity picks up
• DS Smith says business performing in line with expectations
• Hochschild Mining Production posts 4.1m ounces of silver in Q1
• Schroders Q1 assets up 5% to £416.3bn, led by retail, wealth management
• Persimmon posts total forward sales revenue £2.56bn
• WPP sales held back by weak U.S., sees improving momentum
• Howden Joinery says on track to open 30 new depots in UK this year
• Countrywide Properties posts Q1 total group income £162m
• Airbus says yet to see proof of Pratt & Whitney engine fix
• KAZ Minerals says on track to meet 2017 production guidance
• Heathrow sees record number of passengers, increase in cargo volumes in Q1
• AstraZeneca sales fall further as generic competition bites deep
• Travis Perkins says start to 2017 in line with expectations
• Cobham Group's Q1 trading in line with board's expectations
• Meggitt's Q1 trading in line with expectations
• Deutsche Bank Q1 profit surges on debt trading
• Airbus Q1 core profit down 52%, reaffirms targets
• Gold slips, but Trump tax reform doubts cap losses
• Oil prices fall on lingering oversupply concerns