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

UK 100 Index called to open +5pts at 7280, holding its rising channel uptrend from Friday’s 7200 trough, showing continued appetite to break back above last week’s 7295 breakdown. Bulls likely still need to see 7300 cleared in order to convince. Bears want to see a breach of 7265 overnight lows to put the current uptrend in jeopardy. Watch levels: Bullish 7300, Bearish 7260.

Calls for a slightly positive open come after yet another trifecta of record high closes on Wall Street, although momentum dipped among Asian bourses overnight. This as investors buckle up for another Fed policy update which may contain news and/or hints about the timing of further policy tightening by way of balance sheet unwinding and the next rate hike.

Japan’s Nikkei is just positive, having made a fresh two year high overnight despite the Yen trading off its lows versus the dollar. Australia’s ASX is just underwater despite commodity prices bouncing  from recent lows, especially Gold in the wake of aggressive Trump rhetoric in his address to the US.

In UK Index news: Diageo says it is performing in line with expectations, backs 3-yr guidance. Shire and Shionogi say a P3 ADHD trial with INTUNIV met its primary endpoint. GlaxoSmithKline and Innoviva  announce positive results for triple-therapy Inhaler Trelegy Ellipta.

Babcock International backs its FY 2018 guidance with 89% of revenues in place. Kingfisher says on track to deliver targets for 2nd year of strategic plan; announces £60m share buyback programme, but remains cautious on H2 backdrop in UK, France.

All three major US bourses closed at record highs ahead of today’s Fed meeting, however closed off intraday highs as they digest President Trump’s remarks to the UN general assembly. The Dow Jones outperformed thanks to gains for Goldman Sachs and Verizon, while Financial and Telecoms names led the charge on the S&P 500 amid reports of consolidation in the latter sector. The Tech-focused Nasdaq also closed at a record high.

Crude Oil benchmarks continue to trade in tight week-long ranges as investors await official US EIA inventories this afternoon and Friday’s meeting of OPEC and non-OPEC producers. Having tested channel floors yesterday both Brent and US benchmarks have rallied from their lows, with the former recovering from a sub-$55 handle to just shy of $55.5 while the latter rebounds from sub-$50 to a $50.3 handle after API reported a smaller-than-expected crude inventory build.

Gold is rallying ahead of this evening’s Federal Reserve monetary policy update, helped higher by 1.5 month rising lows support. The non-yielding asset, sensitive to monetary policy changes, has rallied from an overnight low of $1305 as the US dollar remains subdued, however could face resistance around the $1320 mark should the rally continue this morning.

In focus today is the US Fed’s monetary policy update (7pm; press conf 7.30pm). No rate hike expected (more likely yet another mid-Dec early Christmas present) but markets expect Yellen and Co. to pull the trigger on unwinding its QE-swollen balance sheet. This involves eschewing reinvestment of maturing bonds as another gentle step towards policy normalisation alongside the existing very gradual and modest rate hikes. Watch USD and its impact across asset classes.

Data-wise, UK Retail Sales (9:30am) may suggest a touch slower growth in August (0.2% vs 0.3% prev), after two months of what can only be described as stable but pedestrian growth. The annual rate is also forecast to fall back towards the lows of the year (1.1% vs 1.3% prev vs 2017’s 1.0% trough). Keep an eye on an already jumpy GBP which can influence the UK 100  and of course the UK Retailers.

US Existing Home Sales growth (3pm) is seen rebounding in August after July’s second month of declines to the lowest number of sales since Aug 2016. The metric that can serve as an indicator of consumer confidence and can impact the USD.

With Oil prices touching multi-month highs recently amid optimism about Friday’s OPEC/NOPEC production cut meeting and US operations recovering from inclement weather, the latest US EIA Oil Inventory report (3:30pm) is sure to attract attention. Especially with drawdowns expected across the board for Crude OIl, Gasoline and Distillates. As always keep an eye on the overall US production change too which can suggest more/less shale/fracking to compete with OPEC.

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

• Oil rises after Iraq signals possible OPEC cut extension
• Premier African Minerals sells stake in TCT Industrias Florestais Limitada to Amire Glory
• Mitie may cut 480 jobs as clean up continues
• Gold inches up ahead of Fed policy statement
• Standard Life Private Equity Trust says NAV was up 5.9 percent for quarter ending in June
• Kingfisher announces share repurchase programme, says cautious on second – half prospects
• Shire and Shionogi announce positive topline results for Intuniv
• Igas Energy expects to exit 2017 at 2,500 boepd
• GlaxoSmithkline and Innoviva announces positive impact results for Trelegy in COPD
• Gulf keystone says gross payment of $15 mln received from Kurdistan regional government
• Domino's Pizza announces share repurchase programme of up to 15 mln pounds
• BTG ordered to pay damages of $55.8 mln to Wellstat Therapeutics
• Diageo says overall performance for year remain unchanged, sees impact on sales from Indian highway liquor ban
• Babcock Intl trading in line, outlook unchanged