Markets Overview:

UK 100 called to open flat at 7440, holding the upper half of a 3-day sideways channel 7410-7457. Bulls still need a break above yesterday’s highs to open the door for 7500. Bears require a breach of twin rising support at 7405 to jeopardize the post Christmas uptrend. Watch levels: Bullish 7460, Bearish 7400

Calls for a flat open come after a mixed session in Asia, which followed a flattish US close. Overnight sentiment dented by a China PMI miss, ahead of more US-China trade talks today, begging more questions about global growth.

In corporate news this morning:

BP Q1 underlying replacement cost profit $2.4B (-8.8% YoY, -32.1% QoQ) beats $2.3B est); Operating cash flow $5.9B (excludes $0.6B Gulf of Mexico spill payments, includes $1B working capital build). Oil & Gas Upstream Production +2% YoY, Costs -3.9%. Dividend +2.5% YoY.

Standard Chartered $1B buyback approved; Q1 Operating income $3.8B, +6% QoQ, -2% YoY; Expenses $2.4B -15% QoQ, -2% YoY; Underlying pre-tax profit $1.38B +220% QoQ, +10% YoY; NIM -1bp QoQ, -3bp YoY; Global outlook remains uncertain, but end-Q1 sentiment encouraging.

Glencore Q1 Copper Production -7% YoY. Cobalt +56%, boosted by Katanga which faces export/sale constraints. Zinc +8%, Nickel -10%, Ferrochrome flat, Coal +8%. FY production guidance trimmed for Copper, Nickel, Ferrochrome and Oil.

UK CMA may accept Rentokil undertakings over MPCL to avoid in-depth merger investigation. Final decision 27 June, but could be extended until 22 Aug.

DS Smith trading in-line; growth in corrugated box volumes and market share gains driven by e-commerce. All regions growing, UK, Italy and Poland particularly strong; US solid. Margins and operating cash flow to grow in second half.

Whitbread full year results at lower end of consensus; underlying revenues £2.05B, +2.1% (accommodation +3.5%, UK like-for-like -0.6%), underlying pre-tax £438M, +1.2%, Return on capital 12.2%, -30bp; UK network 76K rooms with 20K pipeline (7K in Germany). Tender offer June to return £2B Costa proceeds. Cash +£500m. Div +2%. Sees weakness since beginning of year,

St James’s Place Q1 Gross inflows -7.6% YoY, Net inflows -16.1%, AUM +15.1%, 95.9% retention rate -3bp, net inflows as % of AUM 9.1% (-240bp).

Sirius Minerals launches Stage 2 Financing of $3.8B including a combination of $2.5B credit facility, $400M share placement (18-31% discount), $644M 8.5% convertible bonds, $500M secured bonds.

Weir Group Q1 orders +18% (-7% excluding ESCO), Mineral orders +3%, Aftermarket +9%, ESCO +5%, Oil & gas -23%. Guidance unchanged.

Hochschild says first quarter output leaves it firmly on track to meet 2019 production/cost targets.

Greene King full year pub like-for-like sales +2.9%, ahead of market; local pubs +4.6%, Easter like-for-like +4.6%; During second half made further progress on debt refinancing plan.

In focus today:

First quarter Eurozone GDP (10am) could impact the Euro, as could Inflation from member states throughout the morning (France, Italy, Spain) and early this afternoon (Germany).

This afternoon, listen out for US Wages (1.30pm) and House prices (2pm), Chicago PMI (2.45pm) and Pending Home Sales (3pm), all of which could move USD with a knock-on for GBP and the UK Index and of course global sentiment.

US-China Trade talks also resume, so expect soundbites a plenty to keep investors on their toes. 

Quarterly results season continues with a busy line-up including Apple, General Electric, GM, Mastercard, McDonalds, Merck and Pfizer.

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