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

UK 100 Index called to open +5pts at 7355, the breakout above 3-week falling highs resistance pausing as it attempts to overcome a hurdle at 7360 to keep the rally from last Thursday’s lows alive. Bulls will be hoping that a swift challenge of aforementioned 7360 resistance results in a comprehensive breakout to 7380, and potentially higher. Bears, however, will be hoping resistance holds for a retracement to former falling highs resistance at 7330. Watch levels: Bullish 7375, Bearish 7240.

Calls for a positive open come as investors follow an overnight lead from Asian markets and dial back reactionary safe-haven bets to Friday’s US airstrikes in Syria and a disappointing Non-Farm Payrolls print. This suggests bullish appetite is alive and well following the conclusion of a seemingly successful two-day Sino-US summit and ahead of key UK, US and Chinese inflation prints this week. Despite safe-haven flight, geopolitical risk remains at the fore with regional tensions rising in Syria and the Korean peninsula, with a US navy contingent moving towards the latter.

UK Index sentiment is likely to be impacted by the US dollar trading at a 3-week high and Commodities holding around recent highs, while the announcement of probes by the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority into Barclays CEO Jes Staley could impact the shares at the open.

A declining Yen sees Japan’s Nikkei trading higher as the index’s exporting contingent benefit, while Australia’s ASX is the region’s outperformer, higher on account of rising commodity prices in reaction to the recent cyclone, helping heavily weighted miners (in particular, coal) to lead the index.

US equity markets closed the week marginally lower as a mixed US Jobs Report and geopolitical risk weighed on investor sentiment. The Dow Jones closed a few points shy of flat as DuPont led losers, while the S&P 500 closed 0.1% weaker and the tech-focused Nasdaq outperformed, although also closed marginally lower.

Crude Oil prices have cooled slightly from Friday’s one month highs as the Baker Hughes Rig Count notched its 12th consecutive weekly increase, although continue to trade around recent highs despite the US dollar at a 3-week high. Investors will continue to keenly watch events in Syria as a gauge for possible supply disruptions in the region.

Gold has fallen back sharply from its post-US election high as weakening safe-haven demand and a stronger US dollar sparks investor flight. Returning to its $1240-1260 sideways trading channel after failing to comprehensively hold above resistance, the yellow metal will now have to once again overcome week-long falling highs resistance at $1255 for a fresh attempt to challenge $1260.

With very little in the way of macro data, company results and speakers scheduled today, in focus today will be the continuation of rising geopolitical tensions that captured investors’ focus towards the back end of last week, while the French Election race reaches the home straight with only a fortnight to go until the first round of polling.

Top tier macro data is limited to the Sentix Eurozone Investor Confidence and US Labour Market Conditions, with both prints expected to cool from February’s readings. The ECB’s Constancio is the lone scheduled speaker today, as he presents the ECB’s Annual Report for 2016 in Brussels at 2pm.

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