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

UK 100 Index called to open -10pts at 7550, the index recovering from overnight lows of 7525 to make a test of intersecting resistance at 7555. Bulls would like to see falling highs at 7560 give way for a return to Friday’s 7580 highs or better. Bears hope that the resistance proves too much, seeing the index fall back to overnight lows or even a retreat to its falling channel floor at 7510. Watch levels: Bullish 7565, Bearish 7540.

Calls for a negative start to the week come as a negative lead from Asian markets and a myriad of global political themes give investors a range of factors to digest.

President Trump sticks to his guns on international trade while on his trip to Asia; a Saudi Arabian power consolidation takes place as the Crown Prince authorises a spate of anti-corruption arrests; a second wave of uncovered offshore accounts and transactions ensnares the Queen and US Commerce Secretary Wilbur Ross; and the ongoing Westminster sleaze scandal sees further MPs suspended by their parties over the weekend.

While corporate news this morning is limited to easyJet passenger numbers (+9.9% YoY despite a more than doubling of cancellations), note Brent Crude rising to fresh 2-year highs could buoy the UK Index ’s heavily-weighted Oil contingent, while a strong Asian showing for base metals may help the Miners.

US equity markets finished the week positively on Friday as the Dow Jones, S&P 500 and Nasdaq all closed at fresh record highs. The Nasdaq outperformed as Apple and Qualcomm led the Tech sector higher, with the former also helping the Dow higher by offsetting Goldman Sachs weakness while the latter led gainers on the S&P.

Crude Oil benchmarks have extended Friday’s gains with Brent Crude trading a fresh 2-year high while US Crude trades within 20 cents of 2017 and its own 2-year highs. Concerns about supply as Nigerian militancy and rising tensions in the Gulf have helped Brent to an overnight high of $62.5, while US Crude, despite retreating from highs of $56, remains well above Friday’s $54.5.

Gold remains relatively flat despite the political stories developing over the weekend, trading close to support as the US dollar makes further headway towards its last October highs. Trading in a tight $1266-1271 overnight range, the precious metal will likely react to movements in the global reserve currency while any major political developments could see some safe-haven flight.

In focus on a rather light day for macro data will be a range European Services PMI prints (8:45-9am). While the French reading is seen confirmed at a 7-month high, both German and headline Eurozone prints are expected to retreat from recent highs. Eurozone Sentix Investor Confidence is next at 9:30am, before Eurozone PPI (10am) provides the latest insight into the state of inflation in the Eurozone.

Speakers of note today include Prime Minister Theresa May addressing British Business leaders at the annual CBI conference in London, while New York Fed President Dudley (5:10pm) speaks on ‘Lessons from the Financial Crisis at the Economic Club of New York.

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