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

UK 100 Index called to open flat at 7455, back from a bullish test of 7470 and another fresh record high overnight. Rising lows still valid from late Friday, as is the rising channel since the Friday prior. Hourly RSI down around recent lows, still in bullish upper half; daily RSI close to but not yet overbought. Bulls will want to see a break above 7457 highs of the last few hours. Bears need rising support just above 7450 to give way. Watch levels: Bullish 7460, Bearish 7450.

A flat start is in spite of gains on Wall Street and in Asia overnight, as oil resumes its uptrend amid continued supportive production-cut rhetoric from OPEC and friends. Taking the shine off this, however, is metals prices giving up some ground - even as the USD retreats - as supply disruptions end and lingering fears about the Chinese economy offset excitement about the “One Belt, One Road” initiative.

Japan’s Nikkei is positive, within touching distance of the 20,000 level it has traded below since last 2015, but prevented from a breakout by USD weakness translating into unwelcome Yen strength. Australia’s ASX is also posting gains, but this could be better if it wasn’t for weakness among financials countering strength within industrials.

US equity markets closed sharply higher on Monday, with both the S&P 500 and the Nasdaq returning to record highs thanks to strength in the Tech and Materials sectors offsetting Telecoms weakness following the global cyber-attack on Friday. Rising crude oil prices helped to encourage appetite for stocks such as Caterpillar and Chevron, while outperformance for large-cap Tech stocks, such as Facebook and Alphabet, inspired strength across the sector.

Corporate news this morning comes from the likes of Vodafone (raised dividend), easyJet (bigger than expected H1 pre-tax loss), housebuilder Crest Nicholson (trading continues to be in line with expectations), and challenger bank CYBG.

Gold has climbed back to $1235 overnight, trying to regain yesterday’s highs, and resume last week’s bounce from 2017 rising support. Now safely above the 200-day moving average at $1230, assisted by USD weakness and questionable US data before a likely Fed rate hike next month, might $1250 be on the cards?

Crude oil prices have gained overnight, having given back some of their OPEC cut extension-inspired gains during US trading on Monday. Brent crude is trading back above the $52 mark while the US benchmark has recovered a $49 handle. Investors will be keenly watching tonight’s API inventory data for any indication of a continued decline in US inventories after last week, while listening out for further production cut extension pledges from other OPEC members to inspire further bullishness.

In focus today will be UK Inflation prints for April seen hitting 3.5% highs and adding to the UK consumer squeeze. This Core CPI is seen above the Bank of England’s desired 2% level for the first since time late 2013, while headline CPI climbs to 2.6% (close to the BoE’s 2.7% est. for 2017) and RPI reaches a dizzying 3.4%. Producer Price (Input and output) increases will remain high, but should have cooled in light of the recent GBP rebound.

On the other side of the channel, German ZEW Surveys are forecast to have improved in May while Eurozone Q1 GDP is confirmed at 0.5% QoQ and 1.7% YoY. The US IEA Monthly Oil report will also be of interest in terms of rising US production versus OPEC oil cuts.

This afternoon, US Housing Starts and Permits are expected to show flat Permit growth on last month while Starts rebound strongly from their weakest in four months. US Industrial Production is seen reporting another strong month, Manufacturing rebounding, while Capacity Use rises to its highest since late 2015.

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

• Wood Group awarded North Sea Shell contract
• Glencore says forecast 2017 demand growth remains positive
• Nigerian oil workers extend Exxon Mobil strike to Chevron, Agip and Shell
• Britain's Vodafone reports net loss of €6.1bn
• Speedy Hire says FY revenue rose 12.2% to £369.4m
• British airline easyJet posts bigger – than – expected first half loss
• HSBC settles bondholders' claims of Libor manipulation
• BHP rejects investor Elliott's claims it has been intransigent
• Premier Foods posts lower sales, changes strategy
• Old Mutual Asset Management prices offering at $14.55 per share
• DCC full – year profit rises
• Oil prices build on gains on expectation of extended crude supply cut
• BTG sees double – digit product sales growth in medium term
• UK builder Crest Nicholson says on track for sales, revenue growth
• London copper slips, traders cut risk as China growth slows
• Gold rises for a fourth day as dollar eases on weak U.S. data