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

UK 100 Index called to open -10pts at 7370 following a failed overnight test of 7400, however remaining underpinned by the 2-week falling highs resistance conquered yesterday having now turned support. Bulls will be hoping the newfound support provides a springboard for a fresh test of 7400. Bears meanwhile hope this is only a temporary reprieve from the overnight sell-off, with a break below support at 7360 coming shortly after the open. Watch levels: Bullish 7380, Bearish 7360.

Calls for a marginally negative UK Index open come after a tale of two Trumps entertained US traders overnight. On the one hand, reports of significant progress towards the long-awaited tax reform look to have rekindled the so-called ‘Trump trade’ in the US overnight, with many now expecting a proposal - including a significant change to the repatriation tax to encourage overseas profits to be returned to the US - to be put to Congress in October.

On the other, Trump not only threatened to derail NAFTA, but also to bring the US government to the brink of shutdown in order to force congressional budget approval for his proposed Mexican border wall, a cornerstone of his election pledges. The world waits with bated breath to see which side of President Trump will prevail.

The lone UK 100 corporate release this morning comes from WPP, with the advertising giant announcing a notable cut to revenue and sales growth forecasts (0-1% vs 2% previous) as companies’ dial back on advertising spending in the second quarter.

Asian equity markets are noticeably mixed, with Japan’s Nikkei looking set to break a run of five consecutive negative sessions for the first time since April 2016, while Australia’s ASX is offside as a result of corporate results. Note Hong Kong’s Hang Seng is closed as Typhoon Hato forces traders to stay home.

US equity markets closed sharply higher yesterday in reaction to the update on the Trump administration’s tax reform plans, with the Dow Jones enjoying its best trading session since April with a gain of 196 points. The S&P 500 closed 1% higher as Tech names led the index higher, buoyed by the prospect of cheaper profit repatriation costs, whilst unsurprisingly the Nasdaq outperformed, closing 1.4% stronger

Crude Oil prices remain underpinned by 1-week rising lows support, despite paring yesterday afternoon’s gains as API inventory data disappointed. Whilst reporting an almost 3m barrel draw in crude oil stocks, roughly a third of last week’s drawdown, a gasoline inventory build offset bullishness. Brent remains supported at $51.50, while US sees support at $47.60.

Gold continues to trade at rising lows support around the $1286.5 mark having traded sideways overnight. The US dollar’s recovery rally has paused, helping the precious metal to rally from its overnight lows of $1283, however the wider US equity rally has kept the safe-haven asset’s gains capped at $1287.

In focus today will be a range of preliminary August Manufacturing and Services PMI prints from across the world. Starting in Europe, French Services are seen continuing a two month slowing while Manufacturing halts two months of acceleration (8am), before Eurozone engine room Germany (8:30am) expects Services to end a 6-month decline, however Manufacturing is seen falling for a second month. Headline Eurozone (9am) Services are seen unchanged, while Manufacturing continues to fall from June’s 2017 6-year high.

This afternoon, both US prints (2:45pm) are seen unchanged in August after encouragingly strong July prints, before Eurozone Consumer Confidence (3pm) is seen retreating for a second consecutive month. As always, US EIA Crude Oil Inventories (3:30pm) will add the usual dash of excitement into oil markets on a Wednesday afternoon, with the official government figures looking to go one better than the API print overnight.

Speaker-wise, ECB President Mario Draghi warms up for his appearance at Jackson Hole on Friday with a keynote speech at the Lindau Meeting on Economic Sciences in Germany (8am), whilst the Federal Reserve’s centrist voter Kaplan participates in a moderated Q&A session in Midland, Texas (6:05pm).

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

• British oil firm EnQuest cuts full – year production forecast
• Michael Kors enters bridge credit deal on Jimmy Choo acquisition
• Costain Group says HY underlying operating profit up 34% to £21.2m
• Laura Ashley Holdings posts FY pretax profit of £6.3m
• Vedanta's quarterly core earnings rise about 48%
• BHP Billiton names new board members
• Bupa to sell part of UK care home business for £300m
• WPP acquires independent brand design agency, Design Bridge
• Gold edges higher on softer dollar; focus on Jackson Hole conference
• London metals consolidate on stronger dollar ahead of Jackson Hole
• Oil prices fall on concerns of oversupply as Libyan output recovers