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

UK 100 Index called to open +20pts at 7690, extending yesterday’s bounce from the 7645 floor of December’s rising channel. Bulls need a break above 7700 to open the door to the channel ceiling around 7750. Bears require a break below 7660 if they want to revisit late Dec lows of 7610. Watch levels: Bullish 7700, Bearish 7660

Calls for a positive open stem from another trifecta of Wall St record highs and a strong China Caixin PMI Services figure overnight that makes for a 3-month rebound to its best in 3 years. After yesterday’s strong US ISM prints this has helped Copper prices perk up and keep Oil prices on a northerly course, the combination of which should continue to benefit the UK Index ’s commodity names. Housebuilders should welcome better than expected UK House prices although London was a blot.

In UK corporate news this morning: Whitbread announces retirement of Richard Baker as Chairman and appointment of Adam Crozier, former CEO of ITV. Debenhams issues profits warning after disappointing Christmas period. DCC acquires TEGA from Linde for undisclosed sum. NMC Health acquires minority stakes in Fakih IVF and As Salama Hospital. Melrose Industries says US tax law to lower 2018 tax rate to 24% and reduce tax payable on disposals from within Nortek. Costain sees FY results in-line. Saga appoints new Travel CEO amid restructuring.

US equity markets closed higher across the board on Wednesday, with the S&P 500 closing above 2700 for the first time and both the Dow Jones and Nasdaq also hitting record levels. Tech continued its 2018 outperformance thanks to strong performances for chip-makers in the wake of Intel’s woes, however Energy stocks were also supportive.

Crude Oil prices have surged to fresh highs on continued concern about political tensions in OPEC member Iran, while an overnight API inventories drawdown aids bullish sentiment .As a result, Brent Crude has climbed above $68 for the first time since May 2015, while its US equivalent has topped $62 a barrel for the first time since December 2014. The New Year-delayed official US EIA Inventories this afternoon will look to repeat the bullish API report overnight.

Gold has continued to retreat overnight, however is trading off its overnight lows as the US dollar rally slowed. The precious metal fell as low as $1306 after the greenback climbed to its highest level of the young new year, although it has since retreated from its highs. Dollar strength in the wake of US tax reforms and new leadership at the US Fed will continue to drive sentiment for the safe-haven asset.

In focus today will be a global smattering of Service PMI readings for December. Starting in Europe, Spain (8:15am) is seen recovering from a 10-month low, while Italy (8:45am) is expected unchanged. These readings are at odds with France (8:50am), which is anticipated to confirm continued retreat from October’s 6yr high, however they support German (8:55am) and Eurozone (9am) prints, both expected confirmed at multi-year highs - the former at a 2-year best, the latter at a 6-year high.

The UK (9:30am) is also seen improving, touching 54 for only the second time since April, while this afternoon’s US print (2:45pm) is forecast confirmed at its lowest level since July 2016.

Elsewhere, UK Mortgage Approvals (9:30am) are expected to fall to their lowest level since mid-2016, while US ADP Employment Change (1:15pm), a warm up for tomorrow’s US Non-Farm Payrolls, is seen unchanged in December and holding at its 12-month average of 190K. Finally, the holiday-delayed US Crude Oil Inventories (4pm) are expected to show their seventh consecutive drawdown, echoing last night's API release (fifth draw in as many  weeks).

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.