Markets Overview:

UK 100 called to open -35pts at 7300, back in the lower half of this week’s 7268-7363 range. Bulls need a break above 7320 to regain the upper half; Bears require a breach of 7268 for a retrace towards intersecting support around 7220. Watch levels: Bullish 7320, Bearish 7265.

Calls for a negative open come after negative sessions in both the US and Asia, where fresh trade war concerns ramped up bearish bets (Tech in the cross-hairs, underperforming) and any freshly lingering optimism just as quickly evaporated. Fed minutes offered nothing to boost sentiment. Oil continues its pullback, as does Copper and GBP the combination of which having mixed impact on UK Index heavyweights like Oil and Mining.

In corporate news this morning:

Intertek reports good start to year with 4-month revenues +5.3% at constant FX (7.3% including FX boost) of which 3.3% organic, 2.0% from acquisitions. On track for FY revenue/margin/cash targets.

United Utilities FY Underlying op profit £684.8m, +6.1%, just above consensus; final dividend +3.9%; says outperforming 2015-20 regulatory contract; £484m pension surplus, deficit eliminated.

Merlin Entertainments urged by 9.3% owner ValueAct to find a private buyer; suggests a 400-450p/share valuation could be achieved. Merlin intends to continue constructive dialogue.

Mediclinic FY net loss narrows on revenues +2% (2% FX headwind) and cost savings/efficiencies; adj. EBITDA -4%, op adj. profit -11%, div flat; Trading in-line, guidance unchanged.

LondonMetric and Mucklow agree cash and share offer for A&J Mucklow, valuing it at £415m, paid for with 2.19m LondonMetric shares and 204.5p cash per share (20% premium).

B&M Euro Value Retail FY revenues +17.1%, store fasci revenue +8.7% (+0.7% like-for-like; 5.8% in Q4); pre-tax profit +8.7%, store adjusted EBITDA +13.5%, cash generation +7%, final div +2%; Pleasing start to Q1 with mid-single digit Like-for-Like(4) in B&M UK fascia stores.

Mitchells & Butlers H1 revenues +5.3% (+4.1% like-for-like), adj. Operating profit +7%; Expect market to remain tough, with limited visibility, but confident in ability to continue to outperform

Serco buys Naval Systems Business Unit of Alion Science for $225m in a deal to be partly funded by a £130m share placing; FY net debt now expected around £250m, vs £200m previously.

Tate & Lyle FY Sales +2%, adj. pre-tax profit +4% (reported -16%), net debt -14%, dividend +2.4%; For 2020, we expect continuing progress in Food & Beverage Solutions and gains from productivity initiatives to offset lower Sucralose profits and continued challenges in Primary Products. As a result we expect EPS growth in constant currency to be broadly flat to low-single digit.

In focus today:

The latest from Westminster with PM May’s position on Brexit, and thus in No. 10, looking increasingly untenable as European elections kick off and the UK’s ruling party looking likely to have a very bad day at the office. Watch GBP and UK Index .

Data-wise, listen out for Eurozone PMI Manufacturing & Services (8-9am) for the month of May, which may deliver slight improvements but still very mixed and divergent readings, from both major nations and the region as a whole. IFO Survey (9am) readings are expected unchanged. Expect ECB minutes (12.30pm) to be remain as dovish as ever (“risks to the downside”) keeping the single currency EUR under pressure.

US PMI Manufacturing & Services (2.45pm) will likely be far more solid that this side of the pond, although this could be offset by a drop in US New Home Sales (3pm) to sap stateside sentiment. Watch USD, especially with a raft of Fed speakers lined up this evening.

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