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

UK 100 Index called to open -40pts at 7360 having broken below 7375 overnight to extend the downtrend from last week’s 7440 highs. This puts the index back in the middle of the 2-week 7300-7440 range, holding the lower half a 2.5-month 7300-7550 channel. Bulls need a break above 7375 to rekindle confidence in seeing 7400 again. Bears require a test of the 7350 lows of the past hour. Watch levels: Bullish 7370, Bearish 7350.

Calls for a negative start in Europe come after North Korea took its provocation to a 20 year high by firing a ballistic missile over Japan into the Pacific ocean, undermining US attempts to bring Kim Jong-un to the negotiating table.

This has understandably seen an overnight preference for safe havens such as Gold, the Swiss Franc, Japanese Yen and Bonds, at the expense of equities with Asian bourses which are firmly in the red after a mixed close on Wall St. Beware the impact of additional USD weakness (2.5yr lows) which could way on both the UK UK Index and German DAX by way of a stronger GBP and EUR.

Japan’s Nikkei is lower due to weakness in financials and as a result of the stronger Yen. Australia’s ASX is the underperformer while Hong Kong is just offside as lower oil prices hurt energy and a mixed showing for metals (precious and copper up, iron ore down) impacting Miners.

US and Brent Crude Oil prices are off their lows after falling sharply yesterday afternoon, beginning to digest the impact of as Hurricane Harvey and refinery shutdowns in Texas. Gold has hit a 9.5-month high of $1324 amid geopolitical uncertainty regarding the ramifications of North Korea’s missile firing.

In focus today after the UK long weekend will be North Korea’s overnight ballistic missile firing over Japan and what it means for an already tenuous geo-political situation regarding the reclusive, hostile and highly provocative nation. A UN security council meeting has already been called.

Beware also soundbites from the third round of Brexit negotiations in Brussels where the UK’s Davis yesterday called for flexibility while EU counterpart Barnier expressed concern at the pace of talks. Plus ça change…..

Data points today are limited to French Q2 GDP (second estimate) and Consumer Spending this morning (7.45am), the former seen unchanged from the first estimate while the latter rebounds from a weak June. This follows a solid GFK Consumer Confidence reading from Germany this morning.

This afternoon we have US House Prices (2pm) and Conference Board Consumer Confidence (3pm) this afternoon. The former is expected to maintain its monthly growth rate of 0.1% (seasonally adjusted) in June while the latter holds firm around last month’s 4-month high.

Don’t forget also tonight's US API oil inventories (9.30pm) before tomorrow’s official EIA print with flooding from Hurricane Harvey devastating parts of Texas.

In terms of central bank speakers we have only the Fed’s Evans (dovish, voter) late this afternoon meaning the focus may remain on the lack of policy timing hints from Fed Chair Yellen and ECB President  Draghi’s steady as she goes message on QE withdrawal from last week’s Jackson Hole symposium.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.

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

• Bunzl's first–half adjusted pretax profit +18%; completed an acquisition in China
• Fastjet says payment to EasyGroup over brand IP has been made
• Premier Oil says vessel for Catcher field on route to North sea
• Avocet Mining updates on discussion with SMB creditors
• WPP acquires majority stake in Danish digital agency, DIS/PLAY
• Hunting appoints John Glick as non–executive chairman
• AstraZeneca says Faslodex gets US FDA nod for expanded use in breast cancer
• AstraZeneca strikes $400 mln Parkinson's drug deal with Takeda
• UK financial watchdog investigates Mitie over September profit warning
• UK house price growth eases to 3–month low in August – Nationwide
• Oil - Flooding knocks out US refineries, crude hit by supply disruptions
• Gold climbs to 9-1/2 month high on rising North Korea tensions