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

UK 100 Index called to open -25pts at 7580, back from yesterday’s fresh record high and brief break above 7600. Bulls highlight support at 7580, helping consolidate yesterday’s push north. Bears point to falling highs since the new peak, and potential for a bearish triangle that ushers the index to back to yesterday’s early 7550 breakout.Watch levels: Bullish 7595, Bearish 7570

Calls for a negative start come in spite of a higher close on Wall St and a largely positive session in Asia overnight as the global equity rally continues its traditional year-end, US tax reform assisted Santa Rally.

In Europe investors aren’t fans of the Catalan election overnight result where the anti-independence party won most seats, but not enough for a majority, while the trio of separatist parties could claim the majority if they form a coalition. The results will only increase tensions between the region and Madrid, adding to a punch bowl of global geopolitical risk and extending the 2018 roller coaster.

Even the German DAX is wary, failing to benefit from the weaker resulting Euro. However, the UK Index may be buoyed by Australian Miners hitting 5 year highs, helped by a USD index pullback and optimism about global growth/China keeping metals prices solid, while Oil holds holds nears its recent highs to help Energy.

In corporate news, Ladbrokes Coral accepts bid (£3.2bn, but could be up to £4bn contingent on new regulations on Maximum Stakes) from GVC which expects at least £100m synergies and double digit boost to EPS. Carillion received all necessary consents for 4-month deferral of financial covenants. Ryanair could face a German pilot strike.

BHP Billiton has agreed to fund a total of up to $181m in financial support for the Renova Foundation and Samarco Minera until 30 June 2018. SolGold offers Cascabel exploration update;Independent consultants finalising report, expects announcement shortly. Aviation PLC confirms signature of lease agreement and completed delivery of an Airbus A320-200 to easyJet.

US equity markets closed higher on Thursday as investors reacted to updated earnings guidance from a plethora of companies in reaction to incoming corporate tax reform. The Dow Jones outperformed with Goldmans Sachs, Chevron and Caterpillar providing the most gains, while the S&P 500 rose 0.2% thanks to Financial and Energy sector strength. The Tech-focused Nasdaq closed just above breakeven.

Crude Oil benchmarks are retreating from intersecting resistance levels after multiple failed challenges, however losses at this stage remain marginal. Global benchmark Brent trades less than $0.1 from key $65 resistance and just shy of yesterday’s highs $65.15, while West Texas crude has recovered from overnight lows of $58, although remains a distance from yesterday’s $58.3 highs.

Gold continues its march higher, remaining in a strong uptrend from last week’s lows. While off yesterday's US dollar weakness inspired highs and intersecting resistance at $1269, the precious metal remains in the midst of a $1265-1269 channel.

In focus today will be the Catalan election result where pro-independence parties in aggregate secured enough to take control (forming yet another European coalition) even if the anti-independence party itself gained the most seats. This will only add to the uncertainty towards Spain’s former autonomous region.

In terms of data, the final reading for UK Q3 GDP (9:30am) is expected to confirm faster quarterly growth of 0.4% (up from 0.3%) and unchanged yearly gains of 1.5%, dispelling some Brexit uncertainty about growth holding up. Watch how the GBP reacts and for any knock on to the UK Index blue chips.

This afternoon, US Personal Income (1:30pm) is forecast unchanged for a third consecutive month, while Spending bounces back above its 12-month average. Core PCE is seen slowing on a monthly basis, while the yearly figure edges higher, and headline Durable Goods Orders are expected to return to growth after contraction in October. The Fed would surely welcome any improvement in inflation (deflator) metrics.

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