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

UK 100 Index called to open -5pts at 7335, giving up a little ground overnight but still ultimately in an accelerated uptrend since Friday. A bullish pennant to 7400 may have petered out early, however, the pullback from yesterday’s high, and overnight bounce from 7320, may yet prove a bullish flag to 7380. Bulls need a break above 7350 highs of late yesterday; Bears would like to see 7320 overnight lows troubled again. Watch levels: Bullish 7350, Bearish 7320.

A slightly negative opening call comes after a mixed US finish (Nasdaq record closing high; S&P intraday high) and despite gains in Asia overnight amid still exceptionally low volatility. Note Trump throwing another spanner in the works, however, by firing FBI director Comey, begging questions about his impartiality towards ongoing investigations. This could impact the approval of stimulus policy markets are hankering after.

Japan’s Nikkei is higher on continued Yen weakness and Oil holding its recent bounce on API data that supports Energy names. Australia’ ASX outperforms as Banks shrug off proposals for a levy on liabilities. Energy and Materials also contributed, with commodity prices off recent lows, in spite of a bearish outlook on global growth uncertainty coupled with oversupply fears.

US equity markets, with the exception of the Tech-focused Nasdaq Composite, pared early gains to eventually trade in the red. The S&P 500 traded above 2,400 points for the first time ever, although gave back initial gains alongside the Dow Jones as it was reported North Korea will undertake a further nuclear test. However, this was not enough to hurt the Nasdaq, as it careered to yet another fresh record closing high following a 0.3% rally on the day.

Note Disney shares down 2.4% after hours as Q1 figures disappointed, rising profits offset by high costs, falling subscribers and the continuing underperformance of its sports broadcaster ESPN.

UK corporate news this morning includes ITV which says it is on track to meet FY guidance despite a drop in Q1 revenues. BAE Systems also reported trading in-line with guidance and housebuilder Barratt Developments sees FY17 pre-tax profits at the top end of views, however, AstraZeneca has said an asthma drug did not meet its primary end-point in a clinical trial.

Crude Oil prices are continuing to trade in tight narrowing patterns, avoiding a test of week-long support as API inventory data reported the largest drawdown in crude stocks so far this year. A 5.8m barrel draw easily topped analysts expectations of 1.8m, helping Brent and US benchmarks to regain $49 and $46 handles overnight, although both continue to face downward pressure with week-long falling highs resistance looming.

Gold price continues to face downward pressure amid the lack of market volatility, although overnight news that North Korea will undertake a sixth nuclear test have helped to lift the safe haven asset from fresh 8-week lows of $1214. May falling highs resistance persists, providing a hurdle for the precious metal at $1223, which it will need to overcome to break its current downtrend and avoid another test of January rising lows support at the aforementioned $1214 mark.

In focus today - another quiet one for data - will be ECB President Mario Draghi who participates in an exchange of views on the impact of ECB monetary policy at the Dutch House of Representatives in The Hague. Any hints about policy (rates, QE tapering) would be most welcome and could influence the Euro with a knock on for european equities (DAX, CAC etc.)

Headline data release US Import Price Index may offer clues about stateside inflationary pressures, forecast up in April after March’s easing from a 19-month high. An annual pace (4.2% in March) holding well above the Fed’s 2% marker would merely add to the weight of evidence supporting a June Fed rate hike that futures markets are pricing in as a certainty.

After oil’s rebound on supportive rhetoric about an OPEC production cut extension at month-end, EIA Crude Oil Inventories will be looked to for the state of affairs on the other side of the global supply glut equation - the US. Especially after a bigger than expected US API drawdown last night (-5.8m barrels vs -1.8m est). This means potential for an upside surprise for EIA consensus of -2.1m  that could engineer a break above $47/50 (WTI/Brent) resistance levels of this week.  As we have seen all too often recently, however, the widely watched Crude number can easily be overshadowed by Gasoline and/or Distillates.

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

• ITV sees ad revenue down by as much as 20% in June
• Compass proposes $1.3bn special dividend after strong sales growth
• Compass Group HY revenue rises; keeps FY outlook
• National Express says on track to meet FY profit view
• Renishaw hikes full – year revenue and profit guidance
• Avocet says received presidential decree on TRI – K project
• AstraZeneca says asthma drug fails late stage trials
• Saga announces refinancing of existing bank facilities
• Strong Belgium, Europe performance boosts Ageas Q1 profits
• TalkTalk cuts final dividend in drive to grow customer base
• BAE Systems says new financial year has started well
• UK's Barratt sees profits at top of range despite flat completions
• Avon Rubber appoints Nick Keveth as group finance director
• Wood Group says FY expectations remain broadly unchanged
• LGO Energy's Neil Ritson steps down as chairman and CEO
• Just Eat says to cooperate with competition watchdog over merger
• Paddy Power Betfair enters U.S fantasy sports market
• Aviva sells stakes in some Spanish JVs for €475m
• Ireland's ptsb increases mortgage market share to 10.4%
• Gold inches up from 8 – week low as dollar slides
• BHP starts process to sell its Cerro Colorado copper mine
• Oil prices rise in Asia in expectation of Aramco supply cut