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

UK 100 Index called to open +15pts at 7370, having built on yesterday’s gains to an overnight high of 7380, however faltering just shy of 7385 and subsequently retreating to intersecting resistance at 7367. Bulls will be looking for a quick return to 7380 to pave the way towards 7400 or higher. Bears eye a breakdown of rising lows and intersecting supports at 7365 and 7355 respectively. Watch levels: Bullish 7385, Bearish 7355.

Another positive UK Index open comes as tensions in the Korean peninsula further abate, this time as North Korean leader hits pause on plans to launch a missile at the US territory of Guam, while the extension of the US dollar rebound from Friday’s lows helps to flatter the earnings of a significant portion of the index’s constituents. While three industry leaders quitting President Trump’s manufacturing council may not inspire confidence from detractors, those with a positive outlook will point to the other 19 CEOs still in the group.

Furthermore, a positive Asian trading session follows a corresponding performance from US stocks, providing a potential springboard for European markets this morning. German Q2 GDP coming in at its fastest annual rate in three years has done little to help the Euro, with traders reacting negatively to the slowing in Q2 growth, however this is likely to perversely boost the army of exporters on the German DAX.

Japan’s Nikkei, Australia’s ASX and Hong Kong’s Hang Seng all gained as investors continues the risk-on sentiment overnight, with the former benefitting from the dump of safe-haven asset Yen to boost its exporters.

US bourses enjoyed their best session since April as North Korean jitters eased, seeing gains across the board as investors turned their backs on safe-haven assets in favour of equities. The tech-focused Nasdaq led gains, up almost 1.5%, closely followed by the S&P 500 (+1.0%). The Dow Jones lagged a little behind (+0.6%) as Home Depot weighed ahead of its Q2 results release today.

Crude Oil prices have found a floor overnight following a sharp sell of late yesterday evening. Both Brent and US crude fell to 3-week lows ($50.55/$47.45 respectively), a drop of almost 2.5%, although capped losses as 2-month rising lows support came into play. Investors beware, however, a break below overnight lows could initiate a significant bearish flag towards $49 (Brent) and $46 (US).

Gold has fallen further from last week’s geopolitically induced highs, suffering as tensions ease and the US dollar extends its rebound from Friday’s lows. The precious metal has found some support at $1272, allowing some reprieve from the sell-off, however should the greenback continue its rally and safe-haven asset demand further diminish, the support could be tested this morning.

In focus today will be UK Inflation readings for July (9:30am). Whilst CPI is expected to remain flat for the month of July, on an annual basis it is expected to show a marginal uptick alongside its Core equivalent. However, both measures are expected to remain a distance from May’s 4-year highs.

Any significant deviation to the upside would present BoE policymakers with a fresh interest rate quandary, especially if Wage data tomorrow shows continued stagnation subsequently pinching consumers’ pockets. Conversely, further cooling from May highs, bringing inflation ever closer to the bank’s 2% target, would be most welcome.

Other data of note today include US Retail Sales (1:30pm), expected to return to growth in July after falling to 2017 lows in June, alongside US Import and Export Inflation also rebounding in July despite slowing on an annual basis. Empire Manufacturing is seen increasing only marginally in August, while the NAHB Housing Market Index (3pm) is expected unchanged.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.

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

• Amec Foster's proposed asset sale may help Wood Group deal approval – regulator
• Hargreaves Lansdown FY profit up 21%
• Oil prices steady after overnight tumble on dollar strength, China concerns
• Mears Group expects to see delays in planned works orders this year
• John Wood Group says CMA accepts in principle remedy offered
• John Menzies declares interim dividend of 6p/shr
• Sainsbury's Nisa takeover talks paused after competition concerns - the Guardian
• Lamprell settles jacking equipment issues with Cameron International
• Shire says submits Lifitegrast marketing authorization application
• Gold dips as investors seek riskier assets amid easing N.Korea tensions
• Gold inches down from near – two month high
• Australia's mining giant Rio Tinto slips; trades ex-dividend