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

UK 100 Index called to open +5pts at 7665, holding Friday’s rebound and break back above 7640. That said, 7695 overnight highs mean falling highs resistance since last Tuesday.  Bulls need a break above 7695 to hold the upper half of the July’s trading range. Bears require a breach of 7640 to resume downward momentum. Watch levels: Bullish 7695, Bearish 7640

Calls for a positive open come in spite of mixed start to the week in Asia where Australia outperformed (Miners positive), Japan was in the red and China extended losses currency (even after PBOC currency intervention) amid rising trade concerns after Beijing threatened the US with $60bn in retaliatory tariffs.

GBP is weak following UK Trade Secretary Fox’s and Chancellor Hammond’s pessimistic comments about no-deal Brexit, helping the UK Index ’s international contingent. Gold is likewise weak after hitting 13-month lows on Friday and amid persistent USD strength. Oil prices muted, but off recent lows after Saudi crude output fell in July and in anticipation of new US sanctions on Iranian oil producers.

In corporate news this morning HSBC Q2 pre-tax profit $5.96B beat $5.8B consensus but CT1 ratio 14.2% (-3bp) misses 14.4% est; H1 revenues +4.2%, net interest income +9.6%, costs +6.7% ($407m impairment), adj. pre-tax profits -1.8% (unadj. +4.6%); Q2 10c div unchanged. Appoints Jonathan Symonds as Deputy Group Chairman.

Tesco and France’s Carrefour confirm long-term strategic alliance covering strategic relationship with global suppliers, joint purchasing of own brand products and goods not for resale. 3yr operational framework, starting October.

easyJet July passengers +4.5% YoY (rolling 12M +6.2%), load +0.1pt to 96.9% (+1.4pt to 93.6%); Wizz Air July passengers +22.9% YoY (rolling 12M +23.1%) on capacity +21.8% (+21.8%), load +0.8pts (+1%) to 95.4% (91.7%).

Vedanta Q1 Revenues +15% YoY, EBITDA +26%, driven by higher volumes and commodity prices, partially offset by input commodity inflation. John Laing Infrastructure Fund and Jura Acquisition (Bidco) agree on terms of £1.45bn/146p cash offer (inc 3.57p div), equating to a 23.6% premium

Spire Healthcare H1 revenues -1.1% YoY, difficult market conditions had bigger impact than expected Jan-Aug, now expects FY EBITDA materially below 2017; identified cost savings from H2, cut FY CAPEX plans by 10%. Ultra Electronics H1 revenue -4.3% YoY, underlying pre-tax profit -16.8%, order book +20%, FY revenue guidance unchanged. Oxford BioMedica, UK Cystic Fibrosis Gene Therapy Consortium, Boehringer Ingelheim and Imperial Innovations form partnership to develop novel gene therapy treatment for cystic fibrosis.

Synthomer H1 revenues +8.2% (+6.4% at constant FX), volumes +9.1%, operating profit +3.8%, pre-tax profit +6.4%, div +8.1%; FY guidance unchanged despite political and economic uncertainty, cautiously optimistic about 2019.

IWG informs Starwood, Terra Firma and TDR that it does not intend to continue discussions regarding a takeover offer. St Modwen disposes of 34 assets to Hansteen for £53.7m cash.  Reuters reports Centrica making a multi-million pound investment in Driivz, an Israeli-based software start-up developing specific software for electric vehicle charging.

In focus today, a very quiet one on the macro-economic front data, will be July German PMI Construction (8.30am) which had, in June, already eased back from May highs while UK New Car Registrations (9am) could post another weak month in July as drivers hold off for a newer 68 plate in September.

Back in Europe, July Eurozone PMI Retail (9.10am) can be used as a proxy for consumer confidence while Eurozone Sentix Investor Confidence (9.30am) may have improved in August. Earnings season continues, but at a slower pace, with just Marriott International Hotels as a good proxy for global growth as well as Tyson Foods.

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