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

UK 100 Index called to open -5pts at 7405, trading in a narrow 7400-7410 band since the wee hours, having narrowed in from yesterday’s 7395-7420 range. Bulls are happy to be holding above 7400, needing a break above 7420 to challenge 2-week falling highs and give hope of a rebound towards 7500. Bears need a breach of both 7400 and yesterday’s 7390 lows to open the door to last week’s 7340 lows. Watch levels: Bullish 7420, Bearish 7390.

Calls for a negative European open (more so for DAX than UK Index ) follow a mixed US close and a negative session in Asia overnight with financials and miners weighing on sentiment in response to results, and a stronger US Dollar causes Oil to give up some of yesterday’s US stockpile data inspired gains. Overnight PMI Services data from China has had limited impact despite being stuck around 2017 lows.

Standard Chartered shares fell sharply in Hong Kong, echoing yesterday’s London losses following results. HSBC shares remain under pressure following its recent results. Oil’s overnight easing has dampened sentiment towards Energy names in the region. Rio Tinto shares (down in London yesterday after results) are lower as they react for the first time in Australia.

UK Index corporate news this morning includes Next budgeting for H2 full price sales -1.2% while it narrowed FY sales guidance to -3.0% to +0.5%. Aviva has increased its dividend on higher profits. Mondi outlook broadly positive but H2 to be impacted by planned maintenance. Randgold Resources profits +50%; trending towards top end of 2017 production guidance range.

The Dow Jones closed above 22,000 for the first time yesterday, however bullish sentiment was not shared by other US equity markets.  While Apple’s impressive Q2 results helped to lift the 30-stock index above 22k, it failed to inspire confidence in the wider Tech sector, consequently seeing the Tech-focused Nasdaq finish unchanged while the S&P500 closed only a single point higher.

Tesla shares jumped 8% in after-market trading yesterday as the electric car maker announced its EPS loss and revenue both beat market expectations thanks to sales of its new SUV. US companies reporting today include Unilever predator Kraft Heinz, Pharma giant Allergan and fast food colossus Yum Brands.

Crude Oil benchmarks are trading just shy of overnight highs as both Brent and US benchmarks encounter emergent falling highs resistance following EIA data-inspired gains yesterday afternoon. While both measures remain a distance from Tuesday’s highs of $53 (Brent) and $50.50 (US), they remain supported by week long rising lows support which could pave the way for a challenge of resistance at $52.50 and $49.50 for Bent and US crude respectively.

Gold has fallen from yesterday afternoon’s $1273 highs as the US Dow Jones rallies to a fresh record high, denting appetite for the non-yielding safe haven asset. While the US dollar briefly traded a fresh 13-month low, it has since recovered to trade back within its trading range since Tuesday, a bearish factor for the precious metal. However, ongoing heightened geopolitical tensions and the Bank of England’s monetary policy update could add to the bullish melting pot.

In focus today is the Bank of England’s latest monetary policy update. The threat of a rate hike, we believe, has subsided after recent UK inflation data eased. This allows the Threadneedle team time to see whether it cools further, something that a stronger GBP may help with n spite of Brexit uncertainty. Let’s see what Carney & Co have to say in the accompanying quarterly Inflation report (QIR).

PMI Services may show Spain (8.15am) and the UK (9.30am) ticking higher, the former to a fresh 2yr high but the latter barely off 2017 lows. Italy (8.45am) may reverse a 3-month downtrend, however, France (8.50am) and Germany (8.55am) likely extended theirs. Both the Eurozone (9am) and US (2.45pm) are expected stagnant, much like Eurozone Retail Sales growth (10am).

This afternoon’s US data includes ISM Non-Manufacturing (3pm), seen retreating to May’s 56.9 after a June’s spike close to fresh 2017 and 2-year highs, whilst Factory Orders return to growth after the first consecutive contraction since 2016 and June Durable Goods Orders are expected to receive a slight downward revision to its preliminary reading.

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

• British retailer Next returns to quarterly sales growth
• Amazon picks its first Australian warehouse, a step towards launching
• ConvaTec profit falls as costs rise; CFO to step down
• Serco first – half results on track, pipeline gives room for optimism
• Mondi posts HY pre – tax profit €462m
• Amerisur Resources says 2017 production guidance under review
• LSE's H1 profit up 19.5%, helped by growth in clearing
• Australia's Rio Tinto slips as earnings miss estimates
• Satellite group Inmarsat reiterates outlook despite uncertain markets
• Randgold says HY profit up 53% while cash costs for quarter was $192.4m, down 7%
• South Africa's Mondi Group H1 profit falls 6%
• LV= in advanced talks with Allianz for general insurance stake
• Insurer Aviva H1 operating profit up 11% to $1.9bn
• Aviva announce ten – year general insurance agreement with HSBC
• UK insurer esure's H1 profit surges 44.6%
• Centamin interim dividend up 25 % to $0.025 per share as Q2 pretax profit nearly halves on lower gold output
• Ferrexpo HY pellet production falls to 5,160 kt
• Cobham says reviewing wireless unit as first – half profit falls
• Ofgem confirms separation plans of National Grid's electricity system operator role
• Gold prices fall as investors turn to risk assets
• Oil dips on high OPEC supplies, defying falling U.S. crude stocks