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

UK 100 Index called to open -5pts at 7285, back from another set of record highs (intraday and closing) that extended the strong run from mid-December. So long as 2017 rising support holds firm at 7275 there is potential for a rebound back above 7300. If breached, however, a retracement is possible towards 7220. Bulls likely want to see a break back above 7300 while Bears will want to see 7265 to suggest the uptrend is in jeopardy. Watch levels: Bullish 7295, Bearish 7270.

Calls for a negative open come after a negative Asian session overnight and in spite of a positive US close. This followed a lively Trump press conference so close to his 20 Jan inauguration, one heavy on media criticism, light on fiscal stimulus detail and which saw him announce a targeting of the drug industry based on pricing. A resulting weaker USD has sent the GBP and EUR higher, unhelpful for the UK UK Index and German DAX.

Japan’s Nikkei is underperforming, hindered by the weak USD resulting in a stronger Yen and weakness in the pharmaceutical sector thanks to Trump’s comments. Improved Eco Watcher Survey data (all back above 50) is not helping at all. Australia's ASX is break-even as oil and base metals hold their bounce and precious metals extend the rebounds, gold hitting a 7-week high..

This morning sees a plethora of UK retailers update including Tesco, Marks & Spencer, Debenhams, ASOS and Associated British foods (Primark). At first glance, trading would appear to have been solid into the Christmas period. Housebuilder Barratt Developments update is of particular interest after peer Persimmon impressed last week but Taylor Wimpey failed to inspire yesterday.

US equities pared early losses made during Donald Trump’s press conference as Pharmaceutical weakness was outweighed by broad gains for Energy names thanks to rising crude oil prices. The Nasdaq once again closed at an all-time high, its fifth consecutive record finish, while aforementioned Energy names helped the S&P 500 0.3% higher. IBM and Goldman Sachs contributed the most gains to the Dow Jones (+0.5%), suggesting investor appetite for Financials has not been dampened despite Trump’s change tune towards the drug industry.

Crude Oil prices rallied yesterday evening, recovering from Tuesday’s overnight lows, as the US Dollar weakened in response to US President-elect Trump’s presser, offsetting losses derived from a larger than forecast build in US inventories. However, prices remained flat during Asian trading hours with investors waiting for further signs that OPEC production cut compliance is reducing the oversupply that plagued the market in 2016.

Gold’s three-week rally has taken the price of the precious metal above $1200 for the first time since November as Trump presser-inspired US Dollar weakness buoys the wider commodities space. Coupled with its reputation as a safe haven asset, political uncertainties are also, although a raft of Fed speakers today could take some wind out of the rally’s sales.

In focus today will be Eurozone Industrial Production seen rebounding in November, helped by strong German figures on Monday and what should be improved Italian growth. This afternoon, the US Import Price Index is forecast to show a huge rebound and thus inflationary pressures that play in favour of the Fed hiking rates.

ECB Minutes will be of interest in terms of hints about tapering of its QE stimulus programme given speculation of it being started before end-2017 after recent strong inflation data. In terms of who’s talking today be prepared for Fed speaker bingo with Harker, Evans, Lockhart (twice), Bullard and Kaplan all speaking./

UK Company Headlines: (Source: Reuters/DJ Newswires)

• Dunelm Group PLC Q2 LFL sales up marginally on seasonal products pick – up
• Mothercare's UK sales return to growth on online surge
• Debenhams says sales rise 5 pct in 7 – week Christmas period
• Ofgem proposes creation of power system operator within National Grid
• UK retailer Asos says it will speed up investment plans as sales rise
• Tesco caps year of recovery with solid Christmas trading
• Britain's Marks & Spencer thumps Christmas forecasts
• Savills says expects full – year results to be ahead of expectations
• Recruiter Hays sees early signs of improvement in UK private sector, reports 2 pct rise in quarterly net fees
• Oil rises on China demand forecast, but ample supplies hold prices back
• Premier Oil sees 2016 revenue slip 10 pct despite record production
• AB Foods says Primark sales rise over Christmas period
• UK housebuilder Barratt builds fewer homes as London completions drop
• Feelgood Svenska signs deal with AstraZeneca
• Gold hits 7-week highs on weaker dollar after Trump briefing