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

UK 100 Index called to open +10pts at 7435, continuing to challenge yesterday’s 7440 highs, looking to break beyond 2-week falling highs resistance. Coupled with 3-day rising lows, this may result in another bullish ascending triangle that extends last week’s late bounce. Bulls need a break beyond 7440; Bears need a breach of 7425. Watch levels: Bullish 7450, Bearish 7420.

Calls for a positive European open follow another record close for the Dow Jones fuelled by banks (10yr highs) on hopes of US deregulation making up for a lack of Trump progress on healthcare and potential struggles with tax reform. Additional help came in the form of better-than-expected after-hours results from Apple giving the tech sector a lift in Asia overnight.

A weaker oil price following a US API inventory build (before official EIA data this afternoon) has also weighed on commodities and natural resources names to see the Australia’s ASX underperform (sole loser), something which may have a read-across to the UK 100 this morning.

UK Index corporate news includes Rio Tinto increasing its share buyback by $1bn after H1 profits almost doubled; confident in China outlook; raises dividend. AstraZeneca says the FDA has granted priority review to its blood cancer drug. BAE Systems H1 profits +36% thanks to currency moves; maintains FY outlook; raises dividend; but cyber security operations need restructuring.

William Hill H1 adj pre-tax profits +2% on revenues +3%; sees good progress in 2017 and beyond. Travis Perkins to reorganise its struggling plumbing unit after profits fell by 4.5%. Royal Mail may face a class action class suit from sub-postmasters.

US equity markets closed higher across the board on the first trading session of August as Tech rebounded after recent weakness. This fresh bullishness helped the Tech-focused Nasdaq and S&P500 to both close 0.2% higher having underperformed on Monday, with Financials aiding the latter. The Dow Jones closed within 40 points of the 22,000 mark as 3M and Banking names helped the index to a fresh record closing high.

Apple reported a sharp increase in both sales and income as it appeared to benefit from greater demand for core iPhone and iPad products. As a result, shares rallied 6% in after-market trading and are expected to open at a fresh record high. US companies reporting today include electric car-maker Tesla, snack powerhouse Mondelez and multimedia giant Time Warner.

Crude Oil benchmarks have held steady overnight having fallen below key price levels in late trading yesterday. US crude initially retreated below $50 a barrel as OPEC reported rising production in the month of July, news which also saw Brent crude fall below $52. Adding to bearish sentiment was a surprise build in US API inventory data, with the industry report showing a 1.78m barrel increase last week. Look for official US EIA Inventories data at 3:30pm to either

Gold has pared gains made yesterday afternoon which had helped the precious metal close the London session at a fresh 7-week high, falling back to week-long rising lows support at $1264. The initial rally had come as a result of weak US macroeconomic data, however this positivity was eventually eroded as all three major US indices closed stronger. The USD will likely remain a key driver of sentiment today.

In focus today is US ADP Employment (1:15pm), oft considered a warm-up for Friday’s Non-Farm Payrolls jobs report. With US Unemployment of 4.8% around 10yr lows, ADP may reinforce the recent jobs market confidence allowing the Fed to hike rates, even if inflation does still lag.

Closer to home, UK Construction PMI (9:30am) is expected to continue slowing from May’s 18-month high, although still holding its 4-month average. Eurozone PPI (10am), however, is forecast to have slowed - on a year-on-year basis - to a fresh 2017 low.

This afternoon, US Weekly EIA Oil Inventories (3:30pm) will add the usual excitement to proceedings as US government figures look to avoid the same fate as last night’s API data which showed a surprise 1.7m barrel build. Although once again the devil may be in the detail with changes in gasoline, distillates and overall production having potential to shift the bull/bear balance and send prices higher or lower.

Finally, with the Fed speaker blackout now over, Cleveland President Mester (7pm; non-voter, hawkish) and the influential San Francisco President Williams (8:30pm; non-voter, neutral) both share thoughts. The former is a keynote speaker at an Ohio Bankers’ event while the latter discusses sustainable growth in Las Vegas.

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

• Argentina hit drags down Aggreko's first-half profit
• Aggreko HY revenue rises; maintains full year guidance
• RSA H1 operating profit rises 15% to $475 mln
• Next says John Barton has stepped down as Chairman with immediate effect
• Genel Energy says Taq Taq field production for July 2017 14,705 bopd
• Travis Perkins profit falls on tough plumbing and heating market
• Rio Tinto H1 earnings more than double on higher commodity prices
• BAE beats first – half earnings forecasts, says on track for the year
• Johnston Press HY profit falls as tough trading persists for newspapers, revenue up 4.6% to £103.3m
• Lufthansa eyes stable pricing in late summer months
• Astrazeneca says US FDA accepts submission of Acalabrutinib
• SocGen reports Q2 profit fall, as litigation provisions weigh
• Hurricane Energy updates on proposed pre – emptive offering
• UK's William Hill H1 profit shrinks on poor football results
• Wizz Air says grows passenger numbers by 24% in July
• Ryanair traffic grows 11% y/y in July, load factor up to 97%
• Hugo Boss reports first U.S. growth in two years
• Gold edges away from 7 – week high as dollar steadies
• Oil down 1% on surprise rise in U.S. inventories, high OPEC output