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

UK 100 Index called to open -10pts at 7430, hindered by overnight falling highs that keep Tuesday’s downtrend intact. Intersecting 2-day support at 7420 may have limited overnight weakness but the hourly RSI remains bearish. Bulls need a break above 5-day falling resistance at 7450 to open the door for a return to 7560 3-week highs. Bears require a breach of 7420 to open the door for a retrace to 5-week support at 7380. Watch levels: Bullish 7450, Bearish 7420.

A negative opening call for European equities comes a after a mixed stateside session, and slim gains in in Asia overnight. Investors may be sceptical of the latest oil price bounce, having been here several times lately but continually failing to overcome a downtrend channel amid global oversupply.

Senate threats to Trump’s latest Healthcare Bill also add to political uncertainty and sap faith in the new US President getting his stimulus election pledges through Congress. However, the status quo benefits the Healthcare sector and Banks may welcome overnight US Fed stress test results.

Japan’s Nikkei is just positive, hindered by a flat Yen, a drop in PMI Manufacturing and lower oil prices hurting Energy. Australia’s ASX is outperforming (only just) as banks are hurt by a new tax proposals and a mixed show from Energy/Miners after the oil price decline.

All three major US bourses overnight finished within 0.1% of Wednesday’s close, with Healthcare names outperforming while Energy names avoided further significant losses. Consumer Staples was the worst performing sector on the S&P500, dragging the index one point lower, while Goldman Sachs provided the most losses for the Dow Jones. The Nasdaq outperformed as biotech stocks helped the index to a second day of gains.

Crude Oil prices have continued to rally from Wednesday’s 10-month lows, with global benchmark Brent trading back above $45 while its US equivalent approaches a $43 handle as both measures continue to narrow between rising lows support and falling highs resistance. Despite this recovery rally, the Baker Hughes Rig Count this evening could see investor sentiment turn bearish once again as the US operations proxy looks to notch its 23rd consecutive increase.

Gold is virtually flat having recovered from overnight lows of $1247, rallying in early morning trading as the US dollar continues to fall from Tuesday’s 4-week highs. Further USD weakness, or dovish commentary from one of the three Fed speakers today, could see the safe-haven asset rally to fresh weekly highs of $1256, however having already failed three times to overcome $1254 this week, a technical retracement to overnight lows is also possible.

In focus today will be the second day of the EU leaders meeting in Brussels. Having laid out on the table the UK’s plans to protect the rights for EU workers in the country, PM May will be hoping for a reciprocal offer today that helps keep negotiations on-track.

Data focuses on June preliminary PMI Manufacturing and Services with all prints expected close to last month’s, the biggest consensus deviations being Germany losing 0.5pts in Manufacturing while both France and the US put on 0.2pts. Services are seen largely stable across the board.

US New Home Sales (3pm) are forecast +4%, while the Baker Hughes Rig Count (6pm) could add spice to the oil story of ever rising US production overpowering OPEC-led cuts to keep the supply glut story alive, to the detriment of global benchmarks.

A trio of Fed speakers are on offer today, starting with non-voters Bullard (4:15pm; very dovish) and Mester (5:40pm; very hawkish), the former discussing monetary policy at an event in Nashville while the latter is a keynote speaker at a conference for Housing, Human Capital and Inequality in Ohio. Centrist voter Powell (7:15pm) speaks about central clearing at the Federal Reserve Bank of Chicago, followed by Q&A.

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)

• Unilever shows innovation still intact with “once – in – a – decade” laundry soap
• Shell's $1bn New Zealand sale said to draw OMV, Vermilion – Bloomberg
• AIB listing priced at €4.40 per share, raises €3bn
• Apple adds Virgin to U.S. carrier lineup as Virgin ditches Android
• Rio flags $180m hit to H1 underlying profit after bond buyback
• BP says allotment of 70.1m shares under scrip dividend programme
• Workspace Group buys a London property for £158.7m
• Hurricane top investor Crystal Amber comments on firm's assets
• Facebook launches drive in UK to tackle online extremist material – the Guardian
• Oil edges up, but still set for worst H1 performance in 20 years
• Gold firms on weak dollar, risk aversion.