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

UK 100 Index called to open +25pts at 7545 having recovered from yesterday’s lows of 7510 shortly after the market close and building once more on rising lows support above 7520. Note, however, intersecting resistance has kept the overnight rally capped below 7550. Bulls will be pining for 7550 to give way for a march towards yesterday’s all-time highs, while Bears will be hoping for a breakdown of rising lows support at 7540 for a return to Tuesday’s 7495 lows. Watch levels: Bullish 7555, Bearish 7530.

A positive opening call comes as investors keep the UK snap election at the forefront of sentiment, digesting performances from last night’s BBC leaders’ debate. The notable absence of Theresa May saw Home Secretary Amber Rudd face the wrath of other parties, although no damaging blows were landed in the onslaught. Sterling has come off yesterday afternoon’s highs of $1.292/€1.149, however remains above its lows that inspired yesterday’s all-time high.

Note, UK 100 companies going ex-dividend today include Marks & Spencers (1.9p), National Grid (29.1p) and Taylor Wimpey (9.2p).

The UK Index is also helped by Crude Oil prices coming off their lows after a bullish inventory report from API overnight, priming this afternoon’s official US Government Inventories for an upside surprise, while a private sector Chinese Manufacturing print moving into contractionary territory (and an 11-month low) has left base metals weaker, albeit not to the same degree as yesterday.

Asian equity markets are mostly lower this morning with the notable exception of Japan. Positive Capital Spending and Manufacturing figures have helped the Nikkei climb by 1%, its strongest day since the start of May, at odds with Australia’s ASX and China’s Shanghai Composite, the former struggling on account of another down day for Commodities while the latter reacts to the Caixin print.

US equity markets continued to fall from record highs, despite the Nasdaq opening at a new record high, as investors engaged in profit taking while keeping tabs on political uncertainty. The S&P500 fell by a single point, remaining within a stone’s throw of all-time highs, while the Dow Jones recovered from early lows to close 0.1% weaker on account of a poor session for Financials.

Crude Oil prices have rallied from yesterday afternoon’s lower after API inventory data reported its largest drawdown so far in 2017. This gives hope that this afternoon’s US Government inventory data could surprise to the upside. Brent crude has moved back above $51 while US crude gains have been capped below $49. Gold has fallen from yesterday evening’s highs, although remains above key rising lows support at $1266.

In focus today will be the reaction to last night’s BBC UK election debate, as well as the latest opinion polling, especially after yesterday’s YouGov poll-derived Sterling weakness saw the UK Index rally to record highs. Should polls continue to show Labour closing the gap to the Conservatives or, indeed, questioning if Theresa May’s party will win a majority at all, we could see yesterday’s Sterling relief rally come under pressure.

Datawise, investors will be eying a deluge of global Manufacturing PMI readings. In mainland Europe, weaker final May readings for Italy (08:45am) and France (8:50am) are set to be offset by the a confirmed strong German (8:55am) performance, helping the headline Eurozone (9am) reading to further build on April’s highest reading since 2011, while the UK reading (9:30am) is expected to retreat from April’s 3-year high.

This afternoon, US Non-Farm Payrolls curtain raiser ADP Employment Change is seen recovering after April’s disappointing showing, while Manufacturing (PMI & ISM; 2:45pm & 3pm, respectively) is expected to be confirmed a touch weaker in May. A holiday-delayed US Crude Oil Inventories (4pm) print could provide an upside beat to the expected 3 million barrel drawdown, much to the relief of crude bulls, after industry data overnight showed the largest draw of the year.

A packed speakers roster today sees multiple ECB speakers (Villeroy - 8:15am, Harkkarien & Costa - 10am) paraded before reporters a week before policymakers meet in Brussels. EU President Juncker speaks alongside German Finance Minister Schaeuble (9am) in a speech likely to be laden with Brexit rhetoric, while EU colleagues Dombrovskis (10am) and Moscoivci (1pm) also take to the stand. Finally, the Fed’s Powell (centrist voter; 1pm) rounds things off after colleague Williams’ speech overnight.

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

• Barclays finishes Africa business sell down with bumper $2.8bn stake sale
• Amec Foster Wheeler wins Aramco oilfield expansion deal
• BA board members to request inquiry into IT outage – BBC
• Jimmy Choo year to date trading strong and in line with management's expectations
• Johnson Matthey reports rise in profit (£461.6m) after cost – cutting
• UK house prices fall for 3 months in a row, first time since 2009 – Nationwide
• FirstGroup FY adjusted operating profit growth up 12.7%
• BHP lifts force majeure declaration at Escondida copper mine
• Oil futures rise on U.S. stockpile draw, doubts over climate accord
• Gold holds near five – week highs, but potential U.S. rate hike weighs