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

UK 100 Index called to open +10pts at 7420, holding the mid-point of yesterday’s 7400-7440 range, awaiting a catalyst to engineer a break higher or lower. Bulls need a break above yesterday’s 7437 highs before being able to think about a challenge on Friday’s highs of 7460 or indeed August‘s 7550 peak. Bears need to see another test of support at 7400 if they want to see a retrace to 7300. Watch levels: Bullish 7440, Bearish 7400

Calls for a positive albeit muted start come as US rhetoric on North Korea tries to shift focus to getting UN counterparts on board with even harsher sanctions, all the while maintaining the option of military intervention. Add to this economic barometer Copper at 3yr highs, positive China PMI Services and some more M&A (tie-up between UK’s Aveva and France’s Schneider Electric) and risk appetite remains refreshingly upbeat in light of the geopolitical uncertainty in play.

A mixed session in in Asia overnight sees Chinese equities gaining on positive macro data. Australia’s ASX is just above water as financial sector weakness weighs, but metals price strength and China data help Miners. Japan’s Nikkei underperforms amid continued Yen strength fuelled by the same NK-inspired safe haven demand keeping Gold just shy of 12-month highs.

Results this morning: UK housebuilder Redrow has announced FY revenues +20%, pre-tax profit +26%, operating margin expansion of 50bps, Order book +14%, Net debt -47% and a final dividend +83% to 11p. Halfords has posted higher same store sales thanks to strong retail growth and Ryanair has maintained a 97% load factor through August.

US equity markets are reopening today following yesterday’s Labor Day holiday.

Crude Oil prices are rallying from overnight lows of $52.05 (Brent) and $47.35 (US) having pared most of yesterday’s gains, now needing to overcome $52.30 intersecting horizontal resistance (Brent) and $47.6 falling highs resistance (US). The progress of restarting Texan oil refineries after Harvey and the strength of the US dollar amid rising North Korean tensions will likely drive sentiment.

Gold is holding onto yesterday’s safe-haven inspired gains after trading a fresh 11-month high of $1340. The precious metal is currently trading in the middle of a tight $1332-$1340 range overnight, having fallen from $1339 overnight highs. A break below $1335 could see the safe-haven asset fall to the channel floor, however any further intensification of US-North Korea tensions could see a return to yesterday’s highs.

In focus today will be European PMI Services (8.45 to 9.30am) after China’s better than expected print overnight and decent Manufacturing equivalents of late. Italy, France, the UK and Eurozone as a whole are expected to have given up ground while Germany and Spain edge higher.

Eurozone Retail Sales growth (10am) is forecast to have contracted in July and slowed up over the year. Not what ECB President Draghi will want to see in terms of waning inflationary pressures in the run-up to the European Central Bank’s policy update on Thursday.

This afternoon, with the US back from its Labour Day holiday, the final July prints on US Factory Orders and Durable//Capital Goods Orders are of interest in terms of how the new quarter has started, especially after last week’s stronger than expected Q2 GDP.

Fed speakers are dominated by dovish duo Brainard (12.30pm) and Kashkari (5.30pm and 6.10pm) who will be listened top for tone about policy and rate hike timing ahead of the US Fed FOMC’s Sept 20 monetary policy meeting and update.

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

• Redrow lifts outlook further as profits jump; final div +83%
• Aveva agrees to combine with France’s Schneider Electric
• Halfords Same Store Sales Rise on Strong Retail Growth
• Astrazeneca names Sheri Mccoy,Deborah Disanzo to board
• Petrofac secures €340m EPC contract with unit of Gazprom
• 888 Holdings revenue +3% on casino, sports betting
• UK car sales fall by around 6-7% in August – preliminary data
• Ryanair load factor still growing; August +1 pct on lower fares
• DS Smith says rate of like for like volume growth well ahead of last year
• Aveva to tie-up with Schneider Electric in software deal
• Shell says well operations restart at Perdido offshore platform
• Halfords maintains profit guidance on solid trading
• TalkTalk is exploring an exit from its mobile operations – FT
• Copper leads most metals up on China data expectations
• Gold edges up, hovers near 1 – year high on haven demand
• US crude prices rise on returning refineries; gasoline slumps to pre – Harvey levels