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

UK 100 Index called to open +15pts at 7540, building on rising lows support since yesterday morning for a test of intersecting resistance at 7540. Having railed to overcome the key level twice overnight, Bulls will be hoping to build on overnight momentum at the market open for a comprehensive break above 7540 for a return to all-time highs, while Bears will be looking for rising lows support at 7535 to give way for a return to yesterday’s lows of 7495.  Watch levels: Bullish 7545, Bearish 7530

A positive opening call comes as investors digest a YouGov/Times election model that forecasts the possibility of a hung parliament in the UK snap general election next week. The possibility that Theresa May’s Conservatives could lose their parliamentary majority saw Sterling briefly fall back below €1.145 overnight, while Cable trades below $1.28.

After an ICM poll gave the Tories a 12-point lead yesterday, at odds with YouGov’s figures, investors will be on the lookout for further election polls today to either confirm or dispel calls for a hung parliament.

This Sterling weakness has offered a helpful translational boost for the UK Index ’s army of foreign earning stocks as the index brushes off weakness in Commodities overnight (Iron Ore -4.2%; Nickel at 11-month lows) as Chinese Manufacturing PMI was reported in-line with expectations.

Markets in Asia had suffered as a result of commodity sector weakness, with Japan’s Nikkei trading 0.2% lower on account of Energy sector weakness, although strength in Australia’s ASX heavily weighted banking sector as the Australian government delays the date of the first payment of its bank tax has offset materials weakness, leading the index 0.2% higher. Hong Kong’s Hang Seng trades 0.2% lower as Chinese traders return from their extended 4-day weekend.

US equity markets closed lower on Tuesday as major bourses snapped their 7-session winning streak on their return from the Memorial Day holiday. The S&P 500 fell back from Friday’s record closing high as investors took risk off the table with political uncertainty continuing to weigh on sentiment, while the Nasdaq also took a step back from record highs despite Amazon surpassing $1000/share for the first time. The Dow Jones underperformed as Financial giants Goldman Sachs and JP Morgan led laggards.

Crude Oil prices have fallen overnight as both Brent and US benchmarks fail to overcome falling highs resistance since OPEC agreed on a 9-month production cut extension. Global benchmark Brent is trading below $52, although may see support at $51.70 offer some respite, while US trade $49.20. Gold, having fallen back to intersecting support at $1260 overnight, has recovered to $1262, although this remains some $10 from yesterday’s 1-month highs. Bulls will be hoping for safe-haven seeking amid global geopolitical tensions or US dollar weakness to inspire a return, while bears will be pining for greenback strength to take the precious metal below $1260.

In focus today will be the May flash Eurozone CPI reading (10am), expected to fall from 1.9% to 1.5%, given further significance following the ambiguous rhetoric emerging from the ECB. Chief Mario Draghi will be hoping that current accomodative policy measures will keep the Core measure at April’s 4-year high, rather than its forecast fall to 1%. However, an upside beat may lend emphasis to reports yesterday that policymakers will discuss removing easing measures at their June 8 meeting, at odds with Draghi’s dovish comments to EU lawmakers on Monday.

Other data of note this morning includes UK Mortgage Approvals (9:30am) which are seen falling marginally in April (watch UK Housebuilders) while German Unemployment (10am) is forecast to fall on a seasonally-adjusted basis. This afternoon, US Chicago PMI (2:45pm) is expected to ease from April’s highest reading since 2011, before US Pending Home Sales (3pm) are expected to turn positive in April.

Euro traders will be hoping for greater clarity from the ECB as members Coeure (8:20am), Visco (9:30am) and Lautenschlaeger (1:30pm) all speak today, while the Fed’s Kaplan (1pm; centrist voter) takes part in a moderated Q&A session in New York and EU President Juncker (5:30pm) addresses a tax avoidance committee in Brussels.

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

• Saudi Aramco signs joint venture deal to build shipyard
• UK's IG sees FY pretax profit modestly ahead of last year
• Telford Homes says full – year revenue up 19%
• AstraZeneca appoints Nazneen Rahman as a non – exec
• Oil falls as rising Libyan, U.S. output undermines cuts
• Gold set for first monthly drop since Dec as Fed rate hike likely