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

UK 100 Index called to open -15pts at 7420 having completed a bearish double top pattern from 7445 overnight, however losses are limited thanks to the emergence of shallow rising support at 7410 providing a springboard to test 7420 intersecting resistance. Bulls hope the break above 7420 continues to mount a test of yesterday’s 7445 highs. Bears, however, will hope this is a only temporary reprieve from pressure that will ultimately see aforementioned 7410 and 7400 support give way. Watch levels: Bullish 7430, Bearish 7410.

Calls for a negative open come as less hawkish than expected Fed minutes and the disbanding of President Trump’s business councils hammer the US dollar overnight.

The abrupt break up of Trump’s Manufacturing and Strategic councils, coming as pressure mounted from US business leaders (including the CEOs of Blackstone, Pepsi and GM) over Trump’s inadequate response to events in Charlottesville, has exposed cracks in corporate American’s confidence in the President. With business-friendly policy measures including tax reform and sector deregulation still yet to be enacted by the administration, it appears patience in the Republican leader is wearing thin.

While some US policymakers felt the time was right to announce a date to begin the unwinding of it bloated balance sheet, others sought confirmation that recent weak inflation prints were only temporary. Expectations remain that the Fed will announce a firm date in September, however investors will first have to gauge the sentiment from FOMC members at their Jackson Hole meeting later this month.

Note, UK 100 stocks that are ex-dividend today include Ashtead (22.75p), British American Tobacco (56.5p), Imperial Brands (25.85p), Reckitt Benckiser (66.6p), Schroders (34p), Merlin Entertainments (2.4p), Pearson (5p), Legal & General (4.3p), and Segro (5.3p).

US indices closed the session higher across the board, although finished off session highs as the break-up of the Trump corporate councils rattled investor confidence. The S&P500 was the most notably impacted by the sudden disbanding of both the Manufacturing and Strategic business councils, falling from session highs (+0.4%) to close just 0.1% higher. The Nasdaq was the top performer, while Home Depot reversed Tuesday’s losses to lead the Dow Jones higher.

Crude Oil prices have ticked marginally higher overnight following the US dollar sell-off, countering an EIA production data-induced sell-off yesterday evening. However, pressure remains on both Brent and US benchmarks after both measures failed to capture any meaningfully gains. Global benchmark Crude has fallen from overnight highs of $50.50 while its US equivalent failed to recapture a  $47 handle.

Gold was a major beneficiary of the Trump council closures and less hawkish Fed minutes, rallying from close to session lows of $1268 to overnight highs of $1289.5 on account of increased safe-haven demand and the US dollar sell-off. Having retreated from those overnight highs, investors in the precious metal will be keeping a keen eye on US events this afternoon.

In focus today, completing this week’s trifecta of UK macroeconomic data, will be UK Retail Sales (9:30am). The street is expecting monthly and annual prints to retreat from June, the former to its 2017 average while the latter dips below. Following Tuesday’s weaker than expected Inflation prints and yesterday’s marginally, however, which may spell an opportunity for an upside surprise as the pinch on consumer's pockets lessens. Watch UK Retailers and GBP.

The final reading of Eurozone July CPI (10am) is released shortly before minutes from the ECB’s July policy meeting (12:30pm). The annual rate of Inflation is expected confirmed at 1.3% for a second consecutive month, while the monthly print declines for the fourth time in succession close to 2017 lows.

The ECB minutes will be scrutinised for any concerns that policy normalisation - most likely in the form of QE tapering - will be delayed as price growth marches back from the bank’s 2% target. Watch reaction from the Eurozone’s common currency.

This afternoon’s US data begins with the Philly Fed, seen retreating for a fourth consecutive month, and weekly Jobless Claims (both 1:30pm). Thereafter, Industrial Production is expected to retreat from June’s 0.4% while remaining above its 2017 average, however Manufacturing Production is expected unchanged (both 2:15pm).

Fed speaker representation comes from Dallas Fed Governor Kaplan (centrist; 6pm) and ‘uber’ dove Kashkari of the Minneapolis Fed (6:45pm).

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