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

UK 100 Index called to open -20pts at 7500, having come under further pressure overnight to extend the pullback from yesterday’s fresh record high. Nonetheless, we have held around 7500 since the early hours, the floor of an 8-day rising channel at 7485 yet to be challenged. Bulls require a break above 7510 to clear falling highs; Bears need another test of 7485 overnight lows. Watch levels: Bullish 7510, Bearish 7485.

A negative opening call comes after risk appetite was dealt a blow overnight by claims that US President Trump may have tried to coerce ex-FBI Director Comey into dropping the probe into Gen. Flynn. This adds to a darkening cloud of controversy and disarray hovering over the White House. It also means more questions about the administration’s ability to garner enough Republican, let alone bipartisan support, for the policy pledges for which investors are growing increasingly impatient.

The weaker USD has the knock-on effect of a stronger EUR, GBP and Yen, which is weighing on major bourses. Japan’s Nikkei is in the red as exporters balk at unwelcome Yen strength amid fresh safe haven seeking while Energy smarts form a surprise US API Crude inventory build. Mixed macro data hasn’t helped with Machinery Orders missing expectations, Industrial Production improving but Capacity Utilisation worsening.

Australia’s ASX is the standout underperformer with Oil’s drop hurting Energy, weighing on metals prices (ex-precious of course), despite a weaker dollar, while a cancelled IPO dented sentiment and data showed Wage Growth holding up but Consumer Confidence easing.

Corporate news this morning include Lloyds confirming that the UK Government has sold down its last few shares in the bailed-out lender, putting an end to a decade of forced ownership form the financial crisis.

US equity markets closed mixed on Tuesday, as continued outperformance from the Tech sector led the Nasdaq to outperform its peers. Both the Dow Jones and the S&P500 closed lower, albeit marginally, as the Healthcare sector weighed on indices following a Citigroup downgrade of Pfizer, offsetting gains on the Dow for Microsoft while Tech was one of only 2 sectors in the green on the S&P.

Crude Oil prices have come off the boil overnight as API inventory data shows a surprise build in US stockpiles, breaking recent uptrends. Global benchmark Brent Crude has recovered from an overnight test of $51 support having retraced from yesterday’s highs of $52, while its US counterpart has made a comparable recovery from $48 as the US dollar continues to trade at its lowest level since November’s election.

Gold has sharply rallied after the revelations from the White House as investors seek safe-haven assets. The precious metal’s climb, alongside the Japanese Yen and US Treasuries, has been helped further by the US dollar trading at its lowest level in 6-months, making its relative price cheaper. This has helped Gold overcome resistance at $1240 to keep the 1-week rally from rising lows support alive.

In focus today will be the repercussions from another emerging Trump-FBI scandal after the President reportedly attempted to coerce former FBI Director Comey into dropping the bureau’s investigation into former National Security Adviser Gen. Flynn’s ties with Russia. This latest saga once again begs questions as to the administration’s impartiality towards the former Soviet powerhouse, whilst also bringing to light Trump’s demeanour in the Oval Office.

Data-wise, the main event is UK Unemployment, although the onus may be placed on Weekly Earnings figures after yesterday’s blowout Inflation data, highlighting a fresh squeeze on consumers. Headline Unemployment is seen remaining at 4.7% while Weekly Earnings (ex bonus) are seen falling to 2.1% (2.2% prev.), well below yesterday’s CPI print of 2.7% (Core 2.4%).

Elsewhere, Eurozone CPI is expected to fall back to February’s 0.4% from March’s 12-month high of 0.8%, while the annual and ECB-preferred Core measure is forecast confirmed at 1.9% and 1.2% in April, respectively. This afternoon, US Government Crude Oil Inventories may confirm a surprise build in API inventory data overnight which saw Crude Oil come off its May highs.

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)

• UK estate agent Foxtons sees revenue slump 25%
• British Land to reduce amount of speculative building
• BP agrees LNG supply deal with Indonesia power firm PLN
• Lloyds new era begins as government sells off final shares
• British Land says FY underlying profit up 7.4% to £390m
• Standard Life Aberdeen likely to choose Dublin for EU hub – chairman
• Brewin Dolphin H1 funds up 6.8%, boosted by markets, inflows
• Tullow Oil updates on Emekuya – 1 oil discovery in Kenya
• SSE posts 2.1% rise in FY adjusted pretax profit
• Countryside Properties HY adjusted revenue £435.4m versus £312.8m year ago
• Oil drops on rising US crude inventories, defies expected supply cut extension
• Gold rises to two – week high on safe – haven demand amid Trump concerns
• London copper prices steady, China outlook drags