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

UK 100 Index called to open +10pts at 7210, having generated support at 7190 yesterday and overnight, which keeps the index in a rising channel since late March’s trough. Bulls need a break above 7220 overnight highs. Bears require a breach of, firstly, 7190 overnight lows, and then the floor of the aforementioned channel at 7180. Watch levels: Bullish 7225, Bearish 7180

Calls for a positive open despite mixed Asian trading at odds with a positive start to the week on Wall St. After a calming of geopolitical concerns and optimism about the Q1 earnings season, mixed data from China may revive queries about the strength of the world’s #2 economy (slowdown looming?) and Beijing’s efforts to buoy growth whilst simultaneously tackling over-leverage (consumer and government) and inflated property prices.

China GDP of 6.8% YoY was in-line, unchanged vs Q4 and above Beijing’s target (of course) but quarterly growth of 1.4% slowed more than anticipated. And while Retail Sales accelerated, suggesting consumer strength, both Industrial Production and Fixed Asset Investment slowed more than expected. After the recent

UK Index still hampered by GBP strength, the currency having risen to a fresh post Brexit vote high vs the USD, reducing the value of the earnings and pay-outs from the many internationally exposed blue-chips. The Pound sterling maintains its uptrend and strength amid positive expectations from Brexit negotiations, surpassing Jan highs.

In corporate news, AB Foods reports revenues +2% look to have missed estimates although adjusted pre-tax profit +1% beat; dividend +3%; progress expected in FY18 adjusted operating profit and adjusted EPS. Melrose has received valid acceptances representing approximately 81.80% of the voting rights of GKN.

Intu Properties backs 2018 guidance despite hit from UK  tenant failures. Ashmore Assets Under Management +$7B in Q3, despite significant emerging market volatility. Tullow appoints new Chair and Tate & Lyle appoints new CFO. InterContinental Hotels 2017 revenue more than double after IFRS 15 restatement. AA profits slide on higher costs.  

In the US overnight, Tesla has been trying to calm fears that the expected 4-5 day work stoppage at one of its Model 3 production lines was tied to any safety concerns, adding to existing order fulfilment issues. Netflix’s quarterly update indicated that the online giant’s international revenues have begun to outpace domestic US sales.

Oil prices have settled midway between yesterday’s high and low, as the threat of further tensions between Russia and the US have been blunted by President Trump’s postponing a new round of sanctions, although ominous statements by US and UK authorities, about potential Russian cyberattacks on American and British corporates, have added fuel to the fire. Investor sentiment buoyed by trust in OPEC and the US’s ability to match any supply shortfall by ramping up production. Gold prices stead $1345-1350. 

In focus today will be digestion of a mixed batch of data from China overnight (see above) which may beg questions, especially in light of the recent trade deficit (seasonality) and, of course, given the current tit-for-tat trade tariffs with the US.

Closer to home, UK Unemployment (9.30am) may well prove little changed, if at all, however, Wage growth (inflationary read across) is forecast to have accelerated further, to its strongest since September 2015, which would add weight to expectations of a Bank of England (BoE) rate hike in May, strengthening GBP to hinder the UK 100 .

ZEW Surveys (10am) are expected to have worsened in April, in both Germany and the Eurozone. This afternoon, US Housing Starts & Building Permits (1.30pm) are forecast up a touch in March, bouncing back from sharp Feb drops.

With Q1 earnings season in full flow, major US corporates reporting today include Goldman Sachs, IBM and Johnson & Johnson, with the former being looked to for growth clues in the wake of results from Citigroup, JPMorgan and Bank of America, and the latter as a barometer for business spending and global growth.

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.