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

UK 100 Index called to open -15pts at 7235, nearing the apex of a narrowing pattern formed from 2-week rising support and 4-week falling resistance. Whichever way it breaks offers potential for a 100pt move sure to interest both bulls and bears, the former looking for a break above 7250; the latter watching for a breach of 7232 overnight lows. Watch levels: Bullish 7255, Bearish 7230.

A negative opening call comes after losses in Australia and China (Japan + Hong Kong closed) overnight and in spite of a positive US finish (another Nasdaq record). Sentiment has been impacted by apprehension ahead of the Fed’s latest update and Apple shares trading lower after hours on news of slowing iPhone sales. Another leg lower for oil hasn’t helped nor base metals turning south again.

Australia’s ASX is down almost 1% as Miners are hurt by fresh China jitters putting base metals prices back into reverse while precious metals remain under pressure. Energy took another hit from global oversupply concerns although a US API inventory drawdown has brought prices off their lows as has some positive OPEC extension comments from Nigeria.

In a busy morning for UK 100 results, Sainsbury FY profits -8% and results look light of consensus; ITV CEO Crozier to step down; Direct Line Group pleased with positive start to 2017, continuing 2016 momentum; Marks & Spencer appoints Halfords CEO as Non-Food Chief.

Imperial Brands will meet FY guidance and also upped its dividend. Paddy Power Betfair Q1 profits jump on FX boost to revenues, trading in-line with FY outlook. INTU Properties reports 5% Q1 rental growth and backed FY guidance. Sage confident can beat 2017 revenue guidance, upped dividend.

US equity markets closed marginally higher on Tuesday as markets paused for breath ahead of the Fed’s May monetary policy update and awaited key Q1 earnings updates. Despite underperforming peers, the tech-focused Nasdaq Composite posted yet another all-time record high, while the blue-chip S&P500 closed within 10 points of a fresh high. The closely followed Dow Jones outperformed, up 0.2% on account of the latest deluge of Q1 earnings and despite poor Auto sales.

Note, a disappointing after hours earnings release from tech giant Apple saw the world’s most valuable company’s share price trade around 2% lower in after-market trading. The company missed analysts’ revenue expectations while reporting only its second quarterly iPhone sales decline ever. For those interested in banks, note that this morning French giant BNP Paribas reported an increase in Q1 profits powered by trading rebound offsetting weak retail.

Crude Oil prices have rebounded overnight following bullish industry inventory data, however remain in a technical downtrend ahead of this afternoon’s official government data release. Overnight, API inventory data showed a 4.2m barrel drawdown, helping to lift US crude benchmark from 5-month lows of $47.40, while global benchmark Brent recovers from 1-month lows of $50.50.

Gold price is virtually unchanged overnight as investors look ahead to the result of this evening’s FOMC meeting. While Fed fund futures place only a 13% probability of a hike this evening, the course of further hikes in 2017 will be the key focus for investors. A marginally stronger US dollar has seen the precious metal fall from overnight highs of $1257, however it remains in a tight $1252-1258 channel.

In focus today will be this evening’s Fed monetary policy update (7pm), not for any rate change, rather the accompanying statement and what we can decipher of the outlook for further rate hikes, while tonight we also eye the TV debate between French Presidential candidates Marine Le Pen and Emmanuel Macron (8pm) ahead of Sunday’s second and final round of voting.

Data-wise, the advance read for Eurozone Q1 GDP (10am) is seen improving slightly in the quarter (0.5% vs 0.4% prev) but holding its annual gains at 1.7%. With inflation still key in the region, PPI for March is of interest, possibly negative in March as the annual pace falls from Feb’s 5-year high.

This afternoon, US ADP Employment is forecast to drop sub-200K, its lowest since October. The number is often considered a hint about what we might see from Friday’s US Non-Farm Payrolls. For US PMI Services consensus expects a slight pullback in April, although the print for ISM non-Manufacturing may in fact go the other way.

US Oil Inventories are important given the situation of rising US production while OPEC tries to cut, to help overcome a supply glut. Lately, however, price reaction has been less about Crude stocks and more what’s going on with Gasoline and Distillates.

Stateside results today include Garmin, Time Warner, Reynolds American, YuM! Brands, Kraft Heinz, AIG, Transocean, MetLife and Facebook.

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

•         UK will not pay 100 bln euro EU exit bill, says Brexit minister
•         British shop prices fall at slowest rate in 3 – 1/2 years – BRC
•         M&S appoints Halfords boss to run clothing division
•         Profit falls at UK's Sainsbury's for third straight year
•         Direct Line posts 4.2 pct rise in Q1 gross written premiums
•         Miner Centamin's first – quarter pretax profit falls 28 pct
•         Pubs operator JD Wetherspoon reports higher sales, warns on costs
•         Sage Group first – half earnings per share rise 2 pct
•         Onesavings Bank reports strong Q1 performance
•         Mitie Group says revenues remained flat in FY 2017, says to write down up to £50m after account review
•         Imperial results hurt by slow-down, investment
•         Britain's ITV says Chief Executive Adam Crozier to step down
•         Russia's Evraz says to sell Nakhodka port for $354.4 mln
•         Paddy Power Betfair Q1 profits double on revenues, merger savings
•         Hugo Boss quarterly results underline luxury recovery
•         London copper drifts as dollar firms on rate rise potential
•         Gold trades near three – week low on higher risk appetite as US Fed meets
•       Oil rebounds on U.S. stocks drawdown, declining OPEC compliance weighs
•         BNP Paribas reported an increase in Q1 profits powered by trading rebound offsetting weak retail.