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

UK 100 Index called to open -20pts at 7575, holding the mid-point of yesterday’s 7630 highs and 7540 lows between rising support and intersecting resistance from last week. Bulls need a break above 7590. Bears require a breach of rising support at 7555. Watch levels: Bullish 7595, Bearish 7550

Calls for a negative open stem from a weak close on Wall St and an extension of losses in Asia notably in China where trade war fears continue to simmer (shares in bear market) along with concerns about flagging consumer growth and apparent intervention to stabilise its renminbi currency. Better than expected China PMI Services not helping either.

Note the US allowing China’s ZTE to resume some business in the US but China banning the US’s Micron Tech. from chip sales. Even talk of Europe weighing up international talks to cut tariffs on cars, to reduce any US-inspired pain, is not helping. As we said recently, this trade story has plenty of legs.

Basic materials and financials weak down-under overnight, which may have a spill over to the UK Index ’s Miners and Banks this morning. UK Index hampered by a weaker USD and thus stronger GBP. Despite the weaker USD, it’s a mixed picture for commodities with Copper lower (China slowing consumption, trade war fears) but Oil higher (supply concerns).

In corporate news this morning, Sainsbury Q1 like-for-like retail sales +0.2%, in-line; Grocery +0.5% misses +0.7% est despite £150m price investment on meat, fruit & veg since March; General Merchandise +1.7% strong, Clothing +0.8% in-line; £3.5bn financing agreed for Asda deal; targets £160m EBITDA synergies from Argos by next March, to open another 90 Argos within supermarkets.

Rolls-Royce wins a $420m contract for military engine-sustainment services, says a statement from the US Pentagon. Compass Group CFO Johnny Thomson to step down by year-end. BP increases stake in Clair field (Shetland); sells interest in Kuparuk (Alaska); cash neutral. SIG H1 revenues flat after FX (+1.4%) and less  working days (-0.8%); Trading remains mixed, Europe confidence offset by UK challenges; guidance unchanged.

National Express JV gets 15yr bus contract in Morocco, expected to generate €1bn over lifetime option for 7yr extension. Topps Tiles Q3 like-for-like revenues -2.3%, extending Q2 weakness; weaker consumer environment. Staffline trading in line with expectations.

In focus today, apart from speculating about the football, and dealing with a quiet session on account of it being Independence day stateside, will be a raft of June PMI Services prints. Note China got things started overnight with a better than expected read, jumping back towards 2018 highs, while India got back above 50 to return to growth.

In Europe, Spain PMI Services is forecast to show a slight decline while Italy edges higher. More importantly, however, could be France and Germany confirms rebound from 2018 and multi-month lows which could help the Eurozone figure do the same to help the EUR.

As for the UK, consensus has its PMI Services flat in June, but note all the aforementioned big guns in Europe holding nicely above 50 in growth territory.

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.