UK 100 Index called to open -5pts at 7265 having breached February rising support at 7280 yesterday and the level turned resistance overnight. For the moment, 7255 2-week support remains valid to keep the index sideways. Bulls want to see a break above 7265 12hr falling highs to open the door for recovery towards 7300. Bears need a breach of 7255 2-week support to open the door for a retrace towards 7200. Watch levels: Bullish 7270, Bearish 7250.

Calls for a negative open come after a mixed close on Wall Street, the Nasdaq bucking gains for the Dow and S&P as investors appeared to reserve judgement on US tax change optimism before potential details next week, while continued conflicting comments from Trump and his administration (this time on China FX) keep investors guessing.

Japan’s Nikkei is in the red on account of Yen strength derived from another down leg for the USD. Australia’s ASX continues to edge back from 5800 despite metals prices getting a with boost (especially Gold; bullish flags) with oil back from its highs despite bullish US inventory data.

UK Index sentiment may be impacted by RBS chalking up its ninth straight loss and outlook suggesting more to come (legacy clean-up, US legal settlements) before a return to profitability. Rather at odds with peer Lloyds which continues to recover, able to offer special dividends and the government’s bailout stake sale almost complete.

Yet another mixed US session was headlined by a significant event, the 10th consecutive record close for the Dow Jones, the first time it has done so since 1987. Pharmaceutical strength led the index 0.2% higher, offsetting weakness in exporting names. A continuing rally in Utilities space helped the S&P 500 to close positive, albeit marginally (+1pt/+0.05%), while the Nasdaq underperformed, down 0.4%, the first back-to-back negative sessions for the index in 2017 as Tesla (-6%) and Nvidia (-9.0%) contributed most losses.

Crude Oil prices reacted unfavourably to news of yet another US inventories build despite the actual figure coming in significantly lower than expected, paring losses made earlier in the session. This weakness has spilled over into overnight trading in Asia, as both Brent and US crude gave back marginal gains on the US dollar weakness. Look out for this evening’s Baker Hughes Rig Count for any further indication of rising US crude production.

Gold broke out yesterday from $1239 week-long resistance and $1243 February resistance to notch a fresh 3-month high of $1254 overnight, while also keeping alive a bullish flag pattern that could take the precious metal’s price  to $1280. Having come about following a sharp dollar devaluation yesterday, the greenback will very much be in focus for investors in the safe-haven asset.

In focus today, with top tier macro data distinctly lacking, will be fallout from RBS’ FY 2016 results. The bailed out bank has made it a whopping nine straight years of losses since the financial crisis. Unfortunately the outlook suggests this set to become ten before as return to profitability, more clean-up costs (likely related to US legal cases) expected in 2017 too. Plus ça change….

Data-wise, UK Mortgage Approvals are expected to have fallen slightly in January, while this afternoon both US House Sales and the University of Michigan Consumer Sentiment are seen firmer. As always, the Baker Hughes US Rig Count may provide direction for crude oil markets into the weekend given its inference about US production levels while OPEC cuts output to buoy prices.

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)

• RBS posts $8.7bn loss in ninth straight year without a profit
• British Airways owner IAG to buy back shares after solid results
• IAG CEO Walsh says looking at 2.5% capacity growth in 2017
• Heathrow delivers record number of passengers in 2016
• Pearson to tighten costs, sell assets after $3.3bn loss
• Property website Rightmove full – year profit rises
• Workspace Group buys London property for £98.5m
• William Hill full – year operating profit falls 10 pct
• Standard Life CEO has pay cut in 2016 – annual report
• Standard Life 2016 operating profit up 9%, beats forecast
• Cautious Bank of Ireland delays resumption of dividend