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

UK 100 Index called to open -10pts at 7135 but in the midst of a rebound and retest of overnight highs. This follows a flirt with 7100 Feb lows that took the recent sell-off from 7400 April highs to just over 4%. Support over the last few hours at 7120, coupled with overnight rising lows offers hope for a bullish turnaround, bolstered by oversold RSIs (hourly/4-hourly) in recovery, although Bears point to a daily RSI yet to go oversold and 200-day moving average support still 65pts away. Watch levels: Bullish 7140, Bearish 7120.

Calls for a negative open for equities come after losses on Wall St amid mixed corporate results overnight (Yahoo! beat, IBM missed), another leg down for Crude Oil drove a poor session in Asia and additional GBP strength took UK Index futures lower. Copper may be off its worst levels, but remains in a clear downtrend, although a rebound for Iron Ore offers some respite for a commodity sector troubled by scepticism about stimulus; too much in China and nothing to show yet from Trump in the US.

Australia’s ASX is in the red as Energy gets a hit from lower oil prices following less bullish than expected US API inventory data, while Real Estate was also weak. Japan’s Nikkei is outperforming despite pain in the Energy sector as a weaker Yen provides a translation boost for exporters.

US equity markets closed lower on Tuesday as weak Q1 earnings data hurt investor sentiment. A surprising miss from major component Goldman Sachs saw the Dow Jones underperform to close over 100 points lower, while a miss for Johnson & Johnson also hurt the index. The S&P500 fared a little better, down 0.3% as Healthcare names proved to be the biggest laggard, while the Tech-focused Nasdaq outperformed, albeit still closing lower by 0.1%, as Yahoo!’s final earnings report showed a 22% revenue jump.

Crude Oil prices have continued their retracement from last week’s highs as an extension to the OPEC-led production cuts continues to be downplayed, while an 840K barrel API inventory drawdown overnight fell short of expectations for this afternoon’s EIA data (1.4m drawdown expected). Meanwhile, a US dollar rebound overnight adds yet further bearish sentiment into the mix, even if it does take GBP from its 5-month highs (vs USD) to assist the UK Index .

Gold price continues to hover around falling highs resistance at $1286, as the precious metal has fallen from overnight highs of $1292 following an early rally during the US trading session on account of the weaker US dollar and persistent geopolitical tensions. An overnight rebound from the global reserve currency means it is off its worst levels, a bearish factor for the dollar-denominated commodity, although remains some distance from former support.

In focus today will be UK parliamentary vote on the proposed snap general election on 8 June. Theresa May’s government needs two thirds of MPs to approve a second general election in only three years, and with the opposition Labour party announcing that they will back the government’s proposal, it will likely be confirmed after Prime Minister’s Questions at midday.

Data-wise, the notable release of the day will be the final reading of March Eurozone Consumer Price Inflation (CPI). The headline figure is expected to be confirmed at 1.5%, having fallen back from February's highs of 2%, which will likely ease pressure on the European Central Bank to remove accommodative monetary policy measures ahead of their policy meeting next week. The ECB’s preferred Core metric is also expected to cool to 0.7% from 0.9% previously, well off its 2% target.

Also of note, US Q1 earnings season continues, with Dow Jones component American Express, online auctioneer eBay and banking stalwart Morgan Stanley all reporting first quarter figures. The latter will be hoping to avoid a repeat of peer Goldman Sachs’ surprising earnings miss yesterday.

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

• Tesco agrees to sell its opticians business
• Burberry sales growth slows as U.S. weighs on group
• Aveva sees FY results broadly in line with market expectations
• Great Portland says to pay 32.15 p/share special dividend
• AB Foods profit jump driven by sugar rebound, lifts outlook
• Gold edges down on profit – taking, but geopolitical worries support
• Bunzl Q1 revenue rises 4% at constant rates
• Fenner HY revenue up 11%; sees FY operating profit above expectations
• Property firm Segro points strong start to 2017
• Rentokil Initial Q1 ongoing revenue increases 10%
• Toyota, Fiat Chrysler lead European car sales gain
• Oil prices dip on bloated U.S. market, mixed Saudi signals
• London copper hovers near three – month low