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

UK 100 Index called to open +15pts at 7120, in the middle of a 7075-7195 trading range since mid last week. The range represents continued consolidation of the recent rebound from a flirt with 2018 lows. Bulls need a break above yesterday’s 7141 highs. Bears require a breach of 7110 rising support. Watch levels: Bullish 7140, Bearish 7110

Calls for a positive open come despite a mixed lead-in from Wall St (Berkshire Hathaway buyback helping Financials, Tech-heavy Nasdaq lower as Apple scaled back iPhone XR production). Asia also mixed (Japan and Australia +1%, China -1%) despite more talk of US trade solution.

UK Index also positive despite GBP strength (2-week highs) on hopes that PM May can convince pro-Brexit cabinet members that time is running out and to give up ground and accept EU compromise. Equities in holding pattern ahead of today’s US midterm elections, where corporate-friendly Republicans could lose some legislative control.

USD shows signs of weakness ahead of a likely uneventful Fed monetary policy update on Thursday. Oil remains close to November lows, in spite of US sanctions on Iranian crude exports, after Iran pledged to circumvent US pressure and Saudi/Russia supply increases were expected to make up for the shortfall.

In corporate news this morning AB Foods FY revenues +1% (+3% before FX), adj. op profit £1.4bn (+3% or +5% before FX) beats £1.39bn est. (statutory +1% or -19% excl. exceptionals); Adj. EPS 134.9p (+6%) beats 132.9p est.; dividend +10%; Expects further Primark expansion; higher Grocery margins; Sugar profits significantly lower; 2019 adj. earnings seen in-line with 2018.

easyJet submits revised expression of interest for a restructured Alitalia. Oct passengers +14.1% YoY, load -2pts to 92.5%; 12 months +10.6%, load -0.1pts to 92.7%.  Wizz Air Oct passengers +14.8% YoY, load +1.9pts to 94%, capacity +14.8%; 12-month passengers +19.6%, +0.7pts to 92.1%, capacity +20.5%.

Imperial Brands FY like-for-like Tobacco/NGP net revenue +2.1%, adj. op. profit +1.9%, net debt -5.5%, dividend +10%. Expects 2019 revenue “at or above” upper end of 1-4% range; Backs med-term EPS +4-8%. £100m higher H1 investment in NGP to lower op. profit (offset in H2). NGP to contribute to profit by end 2019. Divestment program on track to deliver up to £2bn proceeds.

Morrisons Q3 like-for-like sales ex-fuel +5.6% QoQ (Retail +1.3%, Wholesale +4.3%), easing versus +6.3% in Q2. Like for like transactions +0.2%, items per basket -1.5%. AstraZeneca sells medicine rights to Covis Pharma for $350m (and up to $21m/year sales depending. Weir revenues broadly in line with expectations on constant FX basis; Oil & Gas profits guidance revised lower.

Barrick Gold shareholders approve merger with Randgold Resources which reports Q3 profits +25% QoQ (+21% YoY) thanks to cash costs -16%/-12% offsetting sales -9%/-3.5%; forecasts production at bottom of guidance range and cash costs at top of range provided at beginning of year. CAPEX expected slightly higher than original guidance.

Direct Line Q3 gross written premiums -5.8% YoY (motor -1.2%, own brands +0.9%, partnerships -50%, rescue +3.1%), in-force policies -3.8% (own brands +3.5%). On-track to meet FY targets. Motor claims inflation expected at upper end of 3-5% target, own brands claims inflation in-line. Provident Financial appoints Simon Thomas as CFO (prev. at Just Group).

DS Smith H1 trading in-line. Expects H1 sales, adj. op. profit and op. cash flow to be “materially ahead” of last year thanks to input cost recovery and good FMCG volume growth. Integration of Interstate Resources going well. Europac acquisition in-line, expected to conclude by year end. Greene King CEO of 14 years to step down next April, replacement to be announced in early 2019.

William Hill Online net revenues H2 to date -5%, Retail -4%, US +6%; Year to date +4%, -4% and +29%, respectively. Profits hit by regulatory and tax changes. Full-year op profit expected £225-245m, assuming normalised gross win margins for remainder of year. Vesuvius on track to meet FY expectations despite FX headwinds.

In focus today, aside from the US Midterm Elections (Trump and Republicans under pressure), will be Eurozone PMI Services (8-9.30am; forecast mixed), Eurozone Producer Price Inflation (10am; little change expected) this morning, followed by US IBD/TIPP Economic Optimism and US JOLTS Job openings (both 3pm; both seen improving).

In terms of speakers, the ECB’s Cœuré (11:15am, exec. board, hawkish) chairs a panel at a conference on managing financial crises in Brussels, while colleague Lautenschläger (12:00pm, exec. board, hawkish) speaks on banking supervision at a luncheon in Frankfurt.

US corporates reporting quarterly results today include CVS Health, Eli Lilly (could impact AstraZeneca and GlaxoSmithKline), Norwegian Cruise Line (influential for Carnival?), Ralph Lauren (luxury read-across for Burberry?), Regeneron Pharma and Thomson Reuters.

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.