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

UK 100 Index called to open -15pts at 7335 following a sustained sell-off yesterday to rising support at 7315. While a recovery to shallow falling highs resistance at 7340 has been successful, the index was unable to overcome the hurdle and now finds itself on the back foot once again. Bulls will be hoping for a strong opening to take it above aforementioned resistance for a third challenge this week of 7400 highs, while Bears will be looking for a continuation of the retracement to challenge overnight support at 7315.  Watch levels: Bullish 7355, Bearish 7310.

Calls for a slightly softer open come as a Donald Trump-inspired US dollar sell-off hurt global indices overnight, with the US President claiming that a strong greenback is not beneficial for the US economy while going back on his promise to label China a currency manipulator. Geopolitics continues to weigh on investor sentiment, as safe-haven flight into precious metals and bonds remains prevalent. Added into the bearish melting pot are crude oil prices coming off yesterday’s highs, breaking a 2-week uptrend. Countering this, however, is a resurgence in metals prices following rising Chinese imports and exports. Copper, Zinc and Iron Ore have recovered some of yesterday's losses that saw miners contribute notable losses for the UK Index , as the former two commodities dropped to 3-month lows, while the latter fell to a 5-month low.

Markets in Asia were mostly lower overnight, with Hong Kong’s Hang Seng being the only major index in positive territory. Japan’s Nikkei suffered as a result of the US Dollar sell-off, with subsequent Yen strength hurting its Financial and Energy sectors, while Australia's ASX was also led lower by the same sector pairing, despite a positive employment data release showing workers in full-time jobs surged to their highest level in 30 years.

US equity markets finished lower on account of President Trump’s denouncement of the strong dollar, while investors await the start of Q1 earnings season on Thursday. The Dow Jones closed 0.3% lower as Caterpillar contributed the most loses, while the Industrial sector as a whole was the laggard on the S&P500, seeing the index fall 0.4%. The Tech-focused Nasdaq once again underperformed peers, down 0.5%.

Crude Oil prices have broken their 2-week uptrend, although have found support overnight (Brent $55.50; US $52.80) as investors digest yesterday’s EIA inventory draw and the possibility of an extension to OPEC’s production cuts beyond June. Today’s monthly IEA oil report will provide an in-depth look into the state of global supply and demand, with the impact of US production on OPEC’s production cuts likely to be a key talking point.

Gold price has received yet another safe-haven boost overnight as US investors look to counter rising geopolitical tensions, while the US dollar sell off makes the price of the asset cheaper in relative terms. Having traded a fresh 5-month high just above $1288, the yellow metal has since fallen back to $1285 as its remains hampered by 9-month falling highs resistance.

In focus today, ahead of the long weekend for European markets, will be the beginning of Q1 earnings season as US banking giants Citigroup, JPMorgan and Wells Fargo kick things off. Forecasts are for both Citi and JPMorgan to increase revenues by 4% and 9 respectively, although the Wells Fargo accounts scandal is seen remaining a dark cloud over the bank, expected to result in a 4% decline in revenue.

Following this morning’s European CPI readings, we’re quiet on the macro data front until US releases this afternoon. Producer Price Inflation figures, seen flat in March but continuing annual growth, provide the final warm up before tomorrow’s release of CPI figures, while the University of Michigan Sentiment will give us an insight into the state of economic confidence across the Atlantic.

With a lack of speakers scheduled today, the only event of note will be the IEA Monthly Oil report, following on from OPEC’s offering yesterday. While the oil cartel reported a fall in output from its members, will rising US production headline the IEA report?

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