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

UK 100 Index called to open -10pts at 7340 as an overnight fall from 7355 sees the index hover marginally above key support at 7340. Bulls will be hoping the index can engineer a strong early bounce from support to overcome falling highs resistance at 7355 for another crack at 7360, while Bears will want to see 7340 give way for a retracement to 7300 and lower. Watch levels: Bullish 7360, Bearish 7330.

Calls for a marginally lower open come as Asian markets provide a negative lead for their European counterparts, while the British Retail Consortium reported the largest monthly decrease in UK Retail Sales for almost 6 years, resulting in the data point’s longest losing streak since 2008. The timing of the report couldn’t be more relevant given this morning’s release of the latest UK Inflation data, with CPI readings expected to come in slightly softer in March.

Japan’s Nikkei is trading in the red on account of a safe-haven inspired Yen rally, although Hong Kong’s Hang Seng is the notable underperformer in the region as Chinese-listed equities have dragged the index as much as 1.1% lower overnight. Australia’s ASX is the regional outperformer, 0.3% higher as its heavily weighted Financial and Energy sectors provide buoyancy.

US equity markets closed only slightly above break-even on Monday as geopolitical tensions remained at the fore. The Energy sector helped the S&P 500 to outperform other markets, as the tech-focused Nasdaq closed 0.05% higher while the Dow Jones closed just shy of 2 points higher

Crude Oil, having traded a fresh 5-week high overnight, have cooled into the opening of European markets, although remain supported at intersecting resistance (Brent $55.80; US $52.90). The fresh highs come as investors digest fresh supply disruption in Libya has helped support prices around recent highs, the cooling from which can be accounted to a marginally stronger US dollar. API inventory data tonight will provide the latest insight into the tug of war between OPEC and US producers.

Gold price has ticked marginally higher overnight as Asian investors return to safe-haven assets, although a recovering US dollar has tempered gains. While the precious metal remains over $20 away from last week’s 5-month high, geopolitical tensions are helping to keep rising lows support at $1256 alive.

In focus today will be the latest UK Inflation data dump at 9:30am. While the annual CPI reading is expected to hold steady at 2.3%, both the March figure and Core CPI, the latter being the Bank of England’s preferred inflation metric, are expected to cool slightly from February. Also in the release, both Producer and House Price Inflation readings are also expected to cool by a marginal 0.1%. Given Sterling’s strong performance over the month, a cooler March would confirm BoE Governor Mark Carney and colleagues’ view that recent inflation upticks were caused by weakness in the pound, and may help aid the dovish cause at the central bank.

Other data of note includes German ZEW Surveys at 10am, with both Current Conditions and Economic Sentiment readings seen further in April, while the corresponding Eurozone figure is expected to cool from March’s highest reading since end-15. February Eurozone Industrial Production, also at 10am, is forecast to show a cooling in the monthly reading to just above zero, while the annual figure is seen recovering to 1.9% after a weak January. US Small Business Optimism is seen softer in March, while February JOLTS Job Openings are also seen declining.

Fed dissenter Kashkari is the only notable speaker scheduled to speak today at a Minnesota Business Partnership meeting, although the second day of the G7 foreign ministers summit in Italy may attract more investor attention, given heightened geopolitical tensions of late.

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