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

UK 100 Index called to open -45pts at 7655, testing the lower bound of a 2-week rising channel. Bulls need a break above 7681 overnight highs to stay within said channel. Bears likely require a breach of last week’s 7640 lows to confirm abandonment of the channel trend. Watch levels: Bullish 7680, Bearish 7640

Calls for a negative open come after a poor start to the week in Asia which traded lower after the US Tech sector pushed Wall St into the red on Friday. Investor sentiment is perhaps hampered by the prospect of three major interest rate policy decisions this week; Bank of Japan (Tue, 4am, rate expected unchanged, but stimulus policy could be tweaked), Fed (Weds, 7pm, no change expected) and the Bank of England (Thurs, 12pm, rate hike expected).

Trade war fears also continue to weigh on investor risk appetite as major industrial nations (EU, Canada, Mexico, South Korea and Japan) meet to formulate a joint policy against potential US automotive tariffs.

USD is marginally stronger against peers ahead of the Wednesday’s Fed policy update and his Friday’s Non-Farm Payrolls report, although Sterling is mostly flat, neither helping nor hindering the UK Index . Lower oil prices is a nuisance for the Energy equities, although oil prices are off Friday’s lows. Gold lower, tracking USD strength and lack of safe-haven demand.

In corporate news this morning, Standard Chartered has agreed to a further extension of US deferred prosecution agreements until year-end; saying additional time required to complete ongoing US sanctions-related investigation.

Babcock reiterates FY guidance in clarification related to Sunday Times article. Ofgem approves National Grid's nuclear plant upgrade; confirms price controls from 2021 for 5 instead of 8 years. Genel says fourth well now in production at Peshkabir field in Kurdistan, pushing total output past previously published target of 30K bopd.

Housebuilders may be sensitive to brick and tile maker Ibstock warning on FY profits; H1 to reflect weather-impacted start to 2018, and higher energy costs; H2 production to be below expectations. Furthermore, estate agent Foxtons posts H1 pre-tax loss on weak London sales (revenues -9.5%); scraps dividend; outlook mixed, sales subdued but momentum in renting; reviewing cost base.

GVC announces $200m 50/50 JV with MGM to create US sports betting and interactive gaming platform. Indivior has received FDA approval for PERSERIS extended-release injectable suspension for adult schizophrenia; launch timing being reviewed in light of Dr Reddy’s being granted in-part motion to expedite its appeal of the preliminary injunction against it for generic Suboxone sublingual.

Hiscox H1 gross premiums +21% with growth in all segments, pre-tax profits +27% (+2.5% ex-FX), combined ratio improves, interim dividend +5%. Reach sees FY in-line with expectations; interim dividend +5.3%; July revenues seen -7%, H2 print price increases to be offset by further cost savings and synergies.

CYBG 9M mortgage lending +3.8%, FY to be at lower end of guidance as previously indicated. Deposits +4.5%, Core SME loans +4.7%, 218bp net interest margin in-line with FY guidance. Cranswick backs FY guidance after 1Q revenues +3.2%.

Keller H1 revenues +8% (+15% at constant FX), underlying operating profit +7% (+22%), underlying pre-tax profit +12% (+22%), interim dividend +24%; expects further progress in H2, confident FY results in-line with its expectations.

In focus today will be UK Mortgage Borrowing and Mortgage Approvals (9:30am) both expected up slightly in June, a potentially good sign for UK Index Banks and Housebuilders. That said Consumer Credit in general may be flat to lower. All this ahead of the Bank of England interest rate decision on Thursday (2 Aug).

Eurozone Confidence Indicators (10am), for both businesses and consumers, are once again seen weaker around their lowest since Q3 2017, the threat of a trade war denting sentiment.

Meanwhile, preliminary July German Consumer Price Inflation (1pm) figures are seen unchanged at 2.1% YoY, in a welcome sign (for the ECB) that May’s surprising jump is holding following weak Q1-Q2 price growth. Watch the EUR for read-across.

Across the Pond this afternoon, US Pending Home Sales (3pm) are projected higher in June by 0.8% MoM, reversing a 0.5% fall in May. The Dallas Fed Manufacturing Index (3:30pm) is expected to show another month of strength, helped by higher energy prices, although slightly humbler than the outsize 36.5 figure reported in May.

No major central bank speakers are slated today, with so many central banks updating on policy this week and thus in a communication blackout period.

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