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

UK 100 Index called to open +10pts at 7380, holding above 2-week support at 7358 after a brief test on Friday, although has been unable to overcome 7380 intersecting resistance compounded by falling highs since Thursday overnight. Bulls will be hoping a sharp move higher on the open paves the way for a charge towards 7400. Bears will be looking for 7360 to give way for a return to Friday’s 3-week lows of 7340. Watch levels: Bullish 7385, Bearish 7355.

Calls for a positive European open come after Chinese PMI data overnight comes in as expected despite a weather-affected month, aiding a base metals rally (Iron Ore at 4-month high), while Crude Oil extends its rally from June lows.

This offsets the negative impact from visible divisions emerging within the US Republican Party on legislation, subsequently seeing the US dollar hovering above 13-month lows (although off its worst levels), the US-Russian diplomatic spat continuing and the ongoing fallout from the latest North Korean missile test.

Note, HSBC announces a $2bn share buyback scheme to see its Hong Kong-listed shares  climb 3% while Tobacco majors British American Tobacco and Imperial Brands will be closely watched following Friday’s late sell-off on proposals from the FDA to make new products non-addictive. Finally, the audit watchdog has announced an investigation into Deloitte’s 2016 audit of outsourcer Mitie Group.

Asian equity markets are mostly higher, with Hong Kong’s Hang Seng leading proceedings thanks to HSBC’s well-received Q2 report, while the Chinese PMI data has helped its domestic Shenzhen index higher. Australia’s ASX is stronger on the data-inspired base metals rally, however Japan’s Nikkei underperforms as investors react to Friday’s North Korean missile launch.

US equity markets closed the week on a mixed note as weaker-than expected Amazon results dragged down the wider market. This initially weighed on the Tech-focused Nasdaq, however the index closed off its lows (-0.1%), while the tech weakness also filtered through to the S&P500 (also -0.1%). The Dow Jones was the only index in positive territory (+0.2%) as positive results for Chevron offset peer ExxonMobil’s losses, helped by gains for UnitedHealth and Goldman Sachs.

Crude Oil has rallied further on expectations that the US is readying sanctions against OPEC member Venezuela in reaction to the political unrest that has left protesters dead. This, alongside Brent Crude moving away from contango (spot prices < forward contracts) has helped the global benchmark consolidate its position above $52, while its US equivalent approached a $50 handle for the first time since May.

Gold has fallen from fresh 6-week highs overnight as investors take stock of the 5.5% rally. The precious metal is underpinned by ongoing global geopolitical tensions, however the US dollar coming off its lows has seen the greenback-denominated asset come off its highs.

In focus today will be the July estimate of Eurozone CPI (10am), given particular pertinence after Germany’s equivalent data beat expectations on Friday. The latest inflation reading will be closely scrutinised by the ECB after very little information was offered by President Draghi on how soon policymakers may look to taper their quantitative easing programme. Will an upside beat excite hawks (Germany) once again?

Closer to home, UK Mortgage Approvals and Consumer Credit (9:30am) will offer the latest insight into the state of lending to house buyers. With inflation weakening in June, the low interest rate environment looks set to continue. But will this have filtered through to consumers? Watch Housebuilders.

This afternoon, the Chicago PMI (2:45pm) is expected to cool from June’s 3-year high, before Pending Home Sales (3pm) look to extend the bounce from 3-year lows. Rounding things off is the Dallas Fed Manufacturing Index (3:30pm), expected to fall to a 2017 lows.

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

• Chemring awarded $28m contract
• Utilitywise sees FY revenue £4–4.5m below previous expectations
• Underwriter Hiscox's H1 profit rises 12.5% on retail push
• Hiscox reports HY PBT of £102.6m
• Premier Oil provides drilling update at Zama – 1 exploration well offshore Mexico
• HSBC Holdings says HY reported profit before tax of $10.24bn versus $9.71bn
• HSBC's first – half profit rises 5%, beating estimates
• Keller Group says H1 underlying revenue £991.1m
• Newspaper publishes Trinity Mirror steps up cost cuts, reiterates outlook
• India's Max Financial calls off merger with HDFC Standard Life Insurance
• Prudential is set to launch £10bn sell-off of annuities - the Times
• AstraZeneca's Imfinzi cancer drug granted breakthrough therapy designation by FDA
• London copper hovers near two – year peak after China data
• Gold steady around highest in nearly 7 weeks on N.Korea tensions
• Oil hits highest since May on tighter U.S. market, Venezuela sanctions risk