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

UK 100 called to open -10pts at 7218, back from yesterday’s 7240 highs, but holding rising lows support from 7170 which confirms a new February 7190-7290 rising channel, itself at the upper end of the 2-month 6900-7300 rising range. Bulls need a break above 7240 to extend both channels. Bears require a breach of rising support at 7190. Watch levels: Bullish 7240, Bearish 7190

Calls for a negative open come in spite of broadly positive trading on Wall St and in Asia after US and Chinese trade negotiators were reported to be working on multiple memoranda of understanding before the final big trade deal.

Fed minutes suggested plans to end its balance sheet runoff which, if rates stay put, would leave policy more accommodative, supporting risk assets and markets weathering multiple headwinds. GBP weaker after Fitch put UK credit rating on negative watch for a cut due to risk of no deal Brexit.

Oil prices are steady, extending a 7-day uptrend, after overnight API Oil report showed a smaller than expected growth in crude inventories (+1.26m vs. +3m est./-1m prev.).

We have a deluge of UK Index company news this morning, including;

Barclays Q4 net operating income in-line at £4.43B, pre-tax profit £374m misses £566m consensus, but in-line after £140m GMP pension equalisation charge and £60m litigation. Makes £150m charge for Brexit uncertainty; CET1 ratio 13.2% beats 12.9% est. Final div 4p, +100%. Board intends to supplement dividends with additional cash returns, including buybacks.

Anglo American cuts final dividend -5.5% (FY: -2%) after free cash flow -36% and capex +31%. FY revenue +5%, net profit +12% (beat expectations), underlying EBITDA +4% (in-line). Notes FY’19 headwinds in diamond trading.

UK Index Miners could benefit from stronger coal prices after Reuters reported major Chinese port Dalian restricting imports of Australian coal.

BAE Systems FY sales flat, underlying EBITA -2.3%, op. cash flow -43%, net debt +20%, final dividend +1.5% (FY: +1.5%). Order intake +39.6%, backlog +25%. 2019 underlying earnings per share expected to grow by mid-single digit.

JustEat will face more competition from UberEats which the FT reports will cut UK delivery fees to 30% (from 35%) and launch a marketplace to allow restaurants use the app but deliver directly. Standard Chartered makes $900m provision for US/UK regulatory fines over Iran sanctions breach.

Centrica sells US Clockwork Home Services portfolio for $300M. Reports FY revenues +6%, gross margin +5%, adj operating profit +12%, EPS just below guidance. div flat. Targets £250m savings in 2019 and additional £500m beyond. Net debt to rise £400m-1bn.

KAZ Minerals FY revenue +30%, EBITDA +26%, both in-line, free cash flow +29.4%, net debt -3.4%, beating consensus; dividend flat at 6c. Says copper fundamentals remain strong and supportive of plan to double copper production.

RELX FY underlying revenue +4%, adj. op. profit +6%, adj. pre-tax profit +3%, dividend +7%. All metrics in-line with consensus. Announced a £600m buyback, of which £100m already deployed. Confident in another year of growth as key 2019 business trends are consistent with previous year.

Bloomberg reports Debenhams lenders offering more to prevent Mike Ashley from buying it.

In focus today will be preliminary February European Manufacturing & Services PMIs (8:15-9am). German Manufacturing is seen contracting, albeit only just, while Services expands. In France, it’s the reverse, while the Eurozone as a whole should have both expanding. US Manufacturing & Services PMIs (2:45pm), meanwhile, are both forecast still expanding, though Manufacturing perhaps a shade more slowly than previously.

The European Central Bank (ECB) releases minutes from its 23-24 Jan monetary policy meeting (12:30pm), offering more insight on plans for interest rate normalisation and forecast economic growth. How uniform is the ECB board about “risks to growth being broadly balanced”?

US Durable Goods Orders (1:30pm) should extend their growth in December, though it will likely be softer once you strip out lumpy military and aircraft orders. Existing Home Sales (3pm) are seen recovering from a Dec drop.

In speakers, outgoing ECB Chief Economist Praet continues a series of speeches, including a keynote speech on real estate statistics (9am) and a panel discussion (2:30pm, “Is the ECB finally returning to standard policies?”). In the US, the Fed’s Bostic (12:50pm, non-voter centrist), speaks on economic outlook and monetary policy.

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