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

UK 100 Index called to open +10pts at 7288, well above Friday’s 7226 lows, but it has already found resistance at 7300 to maintain last week’s downtrend. Bulls need a break above 7300, to overcome the downtrend; Bears require a breach of 7280 to extend it. Watch levels: Bullish 7300, Bearish 7280.

Calls for a positive open come after a mixed start to the trading week in Asia, where Chinese bourses were down following a weekend of worry over all-but-guaranteed US trade tariffs on an additional $200bn of Chinese imports. Japan is the only green spot thanks to better than expected overnight economic growth figures.

UK Index Miners would normally welcome stronger than expected Chinese inflation figures, however,  the threat of more tariffs may overshadow this. Consumer Prices (CPI) continued to pick up from Q2 lows, and while Producer prices (PPI) beat, they continued to slow from June’s highs.

In corporate news this morning AB Foods reiterates FY guidance, highlights stronger GBP hindrance. Strong FY from Primark (+5.5% at constant FX), Grocery, Agriculture and Ingredients to offset lower EU sugar prices.

GlaxoSmithKline says complete response letter from US FDA for mepolizumab in COPD requires more clinical data to support approval. The UK’s National Institute of Health and Care Excellence won’t recommend NHS adoption of Roche’s ocrelizumab for treatment of multiple sclerosis.

888 launches 888sport sports betting in New Jersey, its first US sports betting offering. RPC notes recent media speculation and confirms preliminary discussions with Apollo Global Management and Bain Capital, which may or may not result in an offer for the company.

Abcam FY adj. revenue +7.4% YoY (+10.7% at constant FX), adj. EBITDA +20.5%, pre-tax profit +26.3%, dividend +17.9%. Noted achievement of key FY perf. targets, stable long-term market outlook, plans to maintain low double-digit revenue growth over the medium-term.

Gulf Keystone reports record net profit in H1 ($26.7m vs $700K), operating cash generation doubles to $61m even with cash operating costs per barrel +11% to $3/barrel. Reiterates 27-32K production guidance (32K in H1 2018); on-track for 50K barrels per day at Shaikin in H1 2019.

RELX completes with shift from dual to single parent company. Unite disposes of 14 properties (3436 beds) for £180.5m (Unite’s share is £84.7m), marginally below book value. Workspace confirms early redemption of £57.5m 6% fixed rate bonds, ahead of Oct 2019 maturity. Indivior prepays $150m outstanding debt, leaving it with $333m borrowing under term loan facilities.

In focus today will be UK economic growth with July Gross Domestic Product (9:30am) expected to accelerate to 0.3% (from 0.1% in June), while the 3-month rolling figure improves to 0.5% sequentially (from 0.4% before). Both would be welcome news for many UK Index names as well as the Bank of England’s monetary policy committee, looking to vindicate their newfound hawkishness.

Additional support could come from July Construction Output, also expected stronger in July (est. 2.6% YoY vs 2.2% prev.), which could help UK Index Housebuilders although Manufacturing & Industrial Production are forecast to post the same rate as in June (annualized 1.5% and 1.1%, respectively) suggesting improved GDP more attributable to the circa 80% of services.

At the same time, the UK’s Trade Balance deficit may have widened, reversing July’s improvement, potential hurting GBP, but helping the UK Index .

For speakers, we have Fed’s Bostic (5pm, dovish, voter), participating in a fireside chat at the Albany Centre of Commerce, with an audience Q&A.

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