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

UK 100 Index called to open +15pts at 7450, testing fresh record highs overnight. This extends a week-long rally from 7250 and builds on recovery from April’s successful test of 2017 support at 7090. Time to look at weekly and monthly charts which are even more impressive. Bulls are looking for a break above 7455 overnight highs and for 7445 to hold up as rising support. Bears need to see evidence that 1-week rising support at 7430 might give way. Watch levels: Bullish 7455, Bearish 7430.

A positive start to the new week comes after oil took another leg higher, extending thanks to supportive rhetoric from Saudi Arabia and Russia about extending OPEC-led production cuts. Metals prices are also advancing; industrial metals helped by optimism about China’s “One Belt, One Road” program, even if overnight data begged more questions, and precious metals fuelled by worldwide cyber-attacks, while a softer US dollar did its bit too.

A firm European start is, however, at odds with a negative finish in the US on Friday (weak US inflation and retail sales) and a mixed session for Asia overnight. Japan’s Nikkei is just offside with gains within the Energy sector from the oil price jump overshadowed by Yen strength from cyber-attack inspired safe haven seeking and softer USD.

Australia’s ASX is just the right side of breakeven as Energy and Miners progress despite questionable China data, especially industrial production, thanks to USD weakness and M&A in the media sector boosts sentiment, delivering just enough strength to offset weakness across most other sectors.

US equity markets closed mostly lower on Friday as disappointing macroeconomic data capped a tough week for the Retail sector. Both the Dow Jones and the S&P 500 broke 3-week win streaks as weaker than expected Retail Sales and Inflation data weighed, however the tech-focused Nasdaq continued recent outperformance, closing higher as Apple closed at yet another record high.

Crude Oil prices are rallying following the joint presser from Saudi and Russian Oil ministers overnight, pledging to extend OPEC and non-OPEC members’ production cuts through until March 2018, 3 months longer than expected. While still needing to be confirmed at this weekend’s meeting of producers in Vienna, both Brent and US benchmarks are rallying to test 2-week highs following a 1.6%/1.7% overnight jump to $51.50/$48.50 respectively.

Gold is benefiting from a sharply weaker US dollar, with weakness in the global reserve currency continuing after Friday’s disappointing macro data that has cast some doubt over a potential June rate hike by the US Fed. This has seen the precious metal continue its rally from 4-month rising lows support, with the successful challenge of its 200-day moving average opening the door for a test of early-May resistance at $1236.

In focus today will be the joint pledge from the Saudi Arabian and Russian Oil ministers to commit to a 9-month extension of OPEC-led production cuts. The proposed extension, better than the 6 months markets had been hoping for, still needs to be confirmed at the 25 May OPEC meet in Vienna.

A distinct lack of top tier macro data means we must wait until this afternoon for our first notable release. US Empire State Manufacturing Index (1:30pm) is forecast to rebound from last month’s lowest reading since November while the NAHB Housing Index (3pm) is seen unchanged, holding marginally lower than March’s 13-year high.

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

• Coca Cola HBC says Antonio D'amato to retire from board
• TUI Group says summer trading in line, Turkey demand subdued
• Oil jumps as Saudi, Russia take lead and extend supply cuts to March 2018
• Victrex HY total sales up 5%
• Lonmin reports H1 operating loss, revenue falls 6% to $486m, cuts spending target, says to acquire remaining 7.5% stake in Pandora
• Lonmin says Q2 refined platinum production down 7.5%
• Premier Oil says production up 44% in period ended April 30
• 888 comments on UK gambling commission's review into licensed activities
• Vodafone transfers a 35% stake in Safaricom to Vodacom
• TUI Group reiterates guidance despite “challenging environment”
• Gold firm on weak U.S. data, North Korea concerns
• London copper treads water as China data disappoints
• Oil stable on expectations of extended OPEC – led production cut