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

UK 100 Index called to open +5pts at 7390, back from a trio of overnight tests of 7400 resistance. Bulls point to holding a tight 2-day 7370-7400 trading range, appetite to test the ceiling and proximity to 7448 record highs. They are banking on this sideways shift being a pause before another leg higher. Bears highlight completion of a minor bearish double-top down to 7385 overnight that could develop into a second, but only back to 7375. Watch levels: Bullish 7400, Bearish 7385.

A marginally positive opening call comes after losses on Wall St (worst in 3 weeks) derived from disappointing results from department store Macy’s fuelling fears that today’s US Retail Sales report might provide another example of hard data (growth) being at odds with soft (surveys).

It’s been a largely negative day in Asia overnight, in spite of Oil holding its recent rebound gains and buoyancy among the majority of metals (except Iron ore, again). Note Chinese equities outperforming on news of a US-China trade deal that softens Trump’s recent approach, however, China’s banking regulator has begun emergency risk assessment of new lenders practises suggesting worries about overleveraged.

Australia’s ASX underperforms with the materials sector the only bright spot thanks to stabilisation of commodity prices. Japan’s Nikkei is also in the red amid fresh Yen strength as the USD peaks on retail sector concerns.

US equity markets snapped their recent run of impressive form, as all three major indices staged their biggest retreat in 3 weeks. The most notable loser was the Nasdaq, as the tech-focused index broke a streak of four consecutive record high closes on account of Snap Inc-inspired weakness, while a disappointing earnings release from Macy’s (-17%) saw Retail stocks weigh on both the Dow Jones and S&P 500 ahead of today’s US Retail Sales data release.

Crude Oil prices have paused for breath following their rally inspired by the US inventory drawdown. Both Brent and US benchmarks have encountered resistance at $51 and $48 respectively overnight and await the latest driver for a potential break higher. This may come in the form of the Baker Hughes Rig Count this evening, as investors continue to weigh the impact of rising US production on OPEC’s 6-month production cut.

Gold has continued its recovery from Tuesday’s lowest point in 8-week, having bounced from 3-month rising lows support and further aided by the US dollar remaining hindered by resistance following a failed attempted breakout. The next hurdle for the precious metal stands at $1229, however with a lack of safe-haven drivers it could struggle to overcome resistance and may instead fall back to test rising lows support at $1227.

In focus today will be Eurozone Industrial Production (10am), forecast rebounding to 0.3% in March from -0.3% in Feb, back to levels last seen around the turn of the year. On an annual basis, the pace should continue to accelerate (2.3% vs 1.2% prev) from January’s 6-month low just above breakeven.

This afternoon, US CPI (1.30pm) probably bounced back in April from its weakest since Jan 2015 (0.2% vs -0.3% prev), although the 12-month figure likely eased another notch (2.3% vs 2.4% prev) from Feb’s 5yr peak. The more closely watched Core measure probably also bounced (0.2% vs -0.1% prev), but held firm at 2% over the last 12 months, the slowest since Nov 2015.

US Retail Sales (also 1.30pm) are expected to deliver a strong return to growth (0.6% vs -0.2% prev), back to Jan levels following a disappointing February and March. Despite this, strong annual growth of 5.2% may be checked by a strong comparison period last April (1.2%). Retail Sales Ex-Autos should recover from a flat March but the Control Group may slow up a little while Real Average Earnings could steal the show given the Fed’s focus on inflationary pressures.

As the debate rages about soft vs hard data, listen out for the latest reading on US Consumer Confidence from the Uni of Michigan (3pm). Consensus is calling Sentiment and Expectations flat but a deterioration in Current Conditions may be on the cards. The Fed’s Evans speaks in Dublin mid-afternoon and the Baker Hughes Rig Count after the European close may impact oil prices if it suggests intensification of rising US production, at odds with OPEC efforts to curb global production to end the glut.

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

• Entertainment One expects to report FY one – off costs of about £47m
• Bowleven to incur one off costs in region of $3 – $4 mln during 2017
• AstraZeneca's durvalumab shown in trial to reduce risk of death from lung cancer
• John Menzies says confident of DX deal completing during summer
• FCA delays decision on probe into Barclays' Qatar ties – FT
• Gold steady as US political concerns pressure dollar; stocks drop
• Oil stable on expectations of extended OPEC – led production cut
• Copper stalls as equities rise and China outlook dims