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

UK 100 Index called to open +20pts at 7225, having rebounded from a weak Friday finish to maintain its uptrend of the prior week. Bulls need a break above overnight highs of 7239, but may even want to wait for the more pivotal 7250 to be bettered. Bears likely want to see a challenge on rising support around 7200 to be convinced that a two-week downtrend has legs. Watch levels: Bullish 7240, Bearish 7215.

A positive opening call comes as investors return from a long weekend with optimism in spite of disappointing China PMI prints - Manufacturing falling to a 6/7-month low as the rebound moderates - and a mixed session from the US that flowed to Asia overnight as geopolitical risk keeps simmering.

Sentiment nonetheless remains biased positive, evident in the Nasdaq Composite posting fresh record highs, the Dow and S&P still close and the VIX volatility index (a.k.a. the fear gauge) at near 10yr lows suggesting an easing of recent geopolitical jitters. This despite Trump saying he wants to look at breaking up the big banks, one of the best performing sectors based on deregulation hopes since the new President was elected.

A mixed session in Asia has seen Japan’s Nikkei outperform thanks to dovish BoJ minutes that kept the Yen on the back foot versus the trio of Dollar, Euro and Sterling. Australia’s ASX suffered from the banks having a bad day after ANZ results disappointed. Mining overlooked a bullish breakout by Copper and Iron Ore, perhaps offset by weak oil and precious metals prices.

This morning, BP has swung to a Q1 profit, the latest oil major to report a sharply improved financial performance after a prolonged slump in crude prices.  Aberdeen Asset Management has also said that its net outflows have narrowed

US equities closed mixed with the tech heavy Nasdaq Composite posting its sixth consecutive record high, although the Dow gave up a little ground on Trump ‘big bank break up’ fears. Markets were perhaps more focused on the US government remaining funded for another 5-months, avoiding another awkward shut-down like in late 2013, and optimistic rhetoric from Mnuchin offsetting  mixed macro data (easing inflation, lower PMI and ISM manufacturing).

Crude Oil remains under pressure, the downtrend of the last two weeks still very much in play as US Crude holds below $49 and Brent struggles to get back above $51.5. The drivers are unchanged as increased US drilling counters OPEC-led production cuts focused on ending a global glut. Beware any test of the lows of last week ($48.5 and $51, respectively) which could open the door to declines to March lows at least another dollar lower.

Gold and fellow safe haven Silver remain on the back foot, understandably so as the VIX gauge of market fear falls to 10-year low and the US dollar holds firm. Gold’s break below $1260 could see it drop back to end-March lows of $1240, however, Silver has already found support at $1680 from mid-March.

In focus today will be the fallout from the infamous May-Juncker dinner and what it means for the future of Brexit negotiations. They may have been at the same table, but it sounds like they were nowhere near being in the same ball park on several issues.

Remaining with politics, we are just days from the second round of the French Presidential Elections (Sunday) with campaigning from both Macron and Le Pen having stepped up over the long weekend and the issue of tactical voting and abstentions having potential to decide the outcome.

In terms of data, we are limited to a deluge of PMI Manufacturing prints with Eurozone, France, Italy and Spain all expected to have gained ground in April, while Switzerland edges back and both Germany and the UK hold firm. Unemployment in both Italy and the Eurozone may have improved a shade in March.

We have results today from US big guns Ford, General Motors, Delta Airlines, Western Union, Andarko Petroleum and Apple.

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

• BP Swings to Profit as Oil Sector Shakes Off Woes
• Smiths Group Sells Microwave Telecoms for £85m
• Lloyds Banking Directorate Change
• NMC Health Sees 2017 Ebitda at Top End of $335M-$350M
• Shawbrook Group 1Q in Line with Management Views
• Aberdeen Asset Management Net Outflows Narrow; Set to Deliver £70M Cost Savings
• Bovis Homes Year-to-Date Trading in Line; to Book One-Off Costs
• Entertainment One Appoints Joe Sparacio As CFO
• JUST EAT Q1 2017 Update
• SolGold Cascabel Exploration Update
  Moody's Downgrades Standard Chartered's Deposit and Senior Unsecured Debt Ratings
• BT Group COMPLETES ACQUISITION OF IP TRADE
• AstraZeneca DURVALUMAB RECEIVES US FDA ACCELERATED APPROVAL.