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

UK 100 Index called to open +10pts at 7142 (ex-divs 2pts), testing overnight highs to extend the bounce from 7105. Bulls will want a break above 7150 to convince of potential to challenge yesterday’s 7175 peak and then intersecting resistance at 7240. Bears need a break below 7130 lows of the last few hours. Watch levels: Bullish 7150, Bearish 7130

 Calls for a positive open comes courtesy of gains in Asia versus losses on Wall St as investors slowly digest the announcement of President Trump’s new economic advisor who is, thankfully, pro-free trade, thus easing trade war concerns, albeit with a nod towards the 'fair' global trade approach his boss is fighting for. UK Index helped by USD off lows to help commodities, although GBP still very close to recent highs, just shy of 1.40 vs Greenback and 0.885 vs single-currency.

 Corporate news this morning: Old Mutual FY adjusted pre-tax profits +22%, continuing ops pre-tax +102%, adj. NAV +6%, div +5%. Unilever chooses Rotterdam for global head office, but London for main stock market listing. Persimmon appoints Roger Devlin Chairman from 1 June (prev. William Hill, Marston’s, Football Assoc.). Airlines may be sensitive to Lufthansa forecasting a drop in profits as higher fuel prices counter cost cuts.

Cineworld FY revenues +11.6% (+8% at constant FX), adj. EBITDA +12.7% (+7.4%), adj. pre-tax profits +14.5%, net debt lower, FY div +14.5%. Kier underlying H1 revenues +8%, pre-tax +4%, div +2%, net debt higher but pension deficit lower, order book and pipeline solid, on-course for double-digit 2018 profit growth and 2020 targets.

OneSavings Bank FY underlying pre-tax +21%, loan book +23%, NIM stable, loss ratio lower, div +21.9%. Spirax-Sarco revs +6% organic, adj op margin flat, pre-tax +29%, DIV +15%. Savills revenues +11%, underlying profits 3.5%, pre-tax +13%, dividend +4%, anticipate tempering of strong transaction volumes of recent times in some markets.

US equity markets closed weaker overnight, lead lower by the Dow Jones as fresh concerns of a US-Chinese trade war hurt largest constituent Boeing. Weighted at around 9% of the index, Boeing’s 2.5% fall saw the 30-stock index fall by 1%, with uncertainty creeping into the S&P 500, which itself closed 0.6% lower as the material, retail and financial sectors weighed. The Tech-focused Nasdaq outperformed, albeit closing 0.2% offside.

Gold has traded sideways overnight, back from yesterday morning’s test of resistance at last week’s highs of $1330. The precious metal remains in a near 1-week rising channel a few dollars shy of resistance at $1325, however its ability to overcome this key level will rest on the performance of the US dollar, with the global reserve currency having traded in a sideways channel since Tuesday.

Crude Oil benchmarks have recovered from yesterday afternoon’s post-US EIA inventory lows, trading sideways overnight as investors await the IEA’s monthly oil report later this morning. The US Department of Energy reported a much larger than expected build in crude oil inventories, however a larger gasoline and distillates drawdown helped to offset bearish sentiment. Brent crude has rallied from overnight lows of $64.1, although failed to better yesterday’s $65.3 highs, while US crude recovered from a near 1-week low of $60.1, also failing to beat yesterday’s $61.3 highs.

In focus today, in terms of data, will be all US-based and around 12.30pm, with Jobless Claims (largely flat), Empire Manufacturing (bounce from lowest since Aug), Philly Fed (pullback towards 2017 lows) and inflation metrics for both Imports and Exports (both easing in Feb, but mixed over the year; the former flat bt the latter rebounding strongly. US NAHB Housing (2pm) is forecast a shade lower (71 vs 72), extending its backtrack from Dec’s best since late 1999.

While there are a lack of scheduled speakers today, expect impromptu updates on the UK’s Russian sanctions (and vice versa) as well as any more new hires in the Trump administration (Sec. of State) following Larry Kudlow’s appointment as Trump’s top economic adviser. Oil traders will be closely watching the IEA’s latest monthly report (9am) amidst the ongoing tug of war between OPEC and resurgent US oil producers.

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