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

UK 100 Index called to open +20pts at 7453, up off Friday’s 7420 worst (fresh 4-month low), but also back from 7462 overnight highs. Bulls need a break above 7462 support-turned-resistance for hope of recovery towards 7794 June highs. Bears require a breach of 7430 for more downside, the next major support being 7335 resistance-turned support from 25 Apr. Watch levels: Bullish 7460, Bearish 7430

Calls for a positive open are in spite of a downbeat start to September trading in Asia, which began the week and month on the back foot courtesy of China Caixin Manufacturing PMI slowing in August (slowest expansion since Jun 2017). Trade worries also persist, the US and Canadian still in deadlock about a new NAFTA. Talks resume Wednesday, but the President is doing his usual, threatening to abandon the whole thing.

Origins for UK Index positivity derive from good old GBP weakness, this after PM May spoke against the possibility of a second Brexit referendum and publicly clashed with chief EU negotiator Barnier over the terms of the UK’s withdrawal from the bloc. Ex-foreign Minister Boris Johnson has also added his tuppence in the Telegraph this morning with a scathing piece on negotiations, while David Davis promises to vote against the PM’s proposals.

Oil prices are lower after a Reuters survey noted higher July-August output from OPEC and US. Gold trades back below $1200, while Copper continues to try and break above late Friday highs which could help UK Index Miners.

In corporate news this morning Standard Life Aberdeen confirms plans for £1.75bn buyback after completing sale of insurance arm to Phoenix Group (£175m commenced to be followed by £1bn B share scheme + consolidation, followed by another £575m buyback)

In their 2020-2025 business plans: Severn Trent aims for real bill reductions of 5% helped by 13% spending efficiencies totalling £6.6bn. Proposes new community dividend of 1% of profits. OFWAT to publish feedback in January. United Utilities proposes a 10.5% cut in real bills (£45 per customer) and a £1bn cut in expenditure; plans £750m water resilience scheme for Manchester. Pennon plans £1bn investment through 2025.

WPP announces company veteran Mark Read as new CEO effective immediately, replacing the ousted Sir Martin Sorrell, with Andrew Scott continuing as permanent COO. Volcan Investments says US$10.89 cash offer for Vedanta Resources has become unconditional in all respects.

Dechra Pharmaceuticals H1 like-for-like revenue +13.9% YoY (at constant FX), EBIT margin +200 bps, pre-tax profit +23.6%, final dividend +18.9%. Trading in line with expectations, with company expected to continue to outperform. Gamma Communications H1 revenue +18.3% YoY, gross profit margin +90bps, adj. EBITDA +30.5%, dividend +10.7%, confident in growth outlook thanks to improved contract pipeline.

WANdisco confident in meeting full-year expectations, even after 12 % fall in first half bookings, thanks to robust sales pipeline; extended relationship with IB; three new contracts with Microsoft cloud customers in banking, semiconductors and retail. Nostrum Oil & Gas postpones drilling in well 234 in west Chinarevskoye due to collapse; moving rig to 231 until at least Q1’19.

In focus today - a quiet one on account of the US Labour day holiday - will be European PMI Manufacturing (8:45-9:30am), with final August figures expected to confirm preliminary reports of a weakening in Continental and UK manufacturing (though still above the 50-point expansion line), this despite both France and Germany posting rises, suggesting weakness outside the core.

In terms of speakers, the ECB’s Mersch (9.30am + 10:20am, hawkish) speaks on “Strengthening the European financial industry amid disruptive global challenges” and then participates in a panel on "The strategy for Europe?” at a "Reinventing Bretton Woods” conference.

This evening, the ECB/Bundesbank’s Weidmann (6:15pm, hawkish) delivers a dinner speech "Higher Growth, Lower Inflation - The Digital Shift from the Bank" before the Fed’s Evans (7:30pm, non-voting, dovish) talks at the Central Bank of Argentina’s Money and Banking Conference, “Dealing with Monetary Policy Normalization.”

Note that major US and Canadian markets are closed for Labour Day holiday, so we have no companies reporting earnings results from across the pond.

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.