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

UK 100 Index called to open +20pts at 7170 having delivered a double bottom reversal from 7130, a support level that goes back to Oct 2016 and April 2015. A challenge has been made on 2-week falling highs resistance at 7175, but 7180 remains to be overcome. Note the 4-hourly RSI also remains stuck in a narrow range below 50, suggesting downside risk prevails. Bulls will be looking for this bounce to overcome 7180 to allow a rally back towards 7220. Bears will hope this bounce peters out before a drop back to 7135 support. Watch levels: Bullish 7180, Bearish 7160.

Calls for a positive open come as Donald Trump puts his money where his mouth is, taking his first step towards a more protectionist US state by withdrawing the Trans Pacific Partnership. However, his other pledge yesterday to begin deregulation helped the USD to gain a footing overnight following its post-inauguration sell-off that took the greenback towards 7-week lows. A recovering oil price bolsters positive sentiment, although all eyes in the UK will be firmly focussed on the Supreme Court for their ruling on the triggering of Article 50.

The Supreme Court ruling could heavily influence FX markets, which would likely have an influence on exporters names and major equity indices like the UK Index and DAX. If the High Court’s ruling that the PM must seek parliamentary approval is upheld, GBP could rally on the hope that the whole Brexit process becomes more complicated for PM May, perhaps even delayed. A favourable ruling would likely see GBP fall on the premise that the Prime Minister can proceed unchallenged.

Japan’s Nikkei is hindered by the Yen holding around recent highs following the USD sell-off. As usual this is detrimental to exporter names. Australia’s ASX is, however, in the green as commodity prices hold up, especially precious metals and Oil tries higher again. Chinese equities flat.

US equity markets closed lower on Monday, however recovered from session lows as President Trump begins to usher in new policies. While still lacking details of other policies, deregulation promises helped indices recover from an early sell-off. Markets took an early lead from falling oil prices, holding back Energy names to see the S&P 500 underperform (-0.3%), whilst earnings reporting McDonald's was the biggest faller on the Dow (-0.15%). The Nasdaq was the best US performer, closing just shy of flat at -0.05%.

Crude Oil prices recovered from yesterday’s US production increase-inspired sell off overnight, bolstered by the weaker US Dollar as Trump’s protectionism comes to the fore. A trend of 2017 falling highs will have to be overcome by both Brent and US crude before any challenge of post-OPEC and non-OPEC production cut highs can be made.

Gold is seeing declines during early trading despite both Brexit and Trump uncertainties headlining today’s trading as the US Dollar trade-weighted basket dipped below 100 for the first time since early December. A failed challenge of $1220 overnight has seen price per troy ounce fall back to $1215, as a Dollar resurgence could see a fresh challenge today.

In focus today is the UK’s Supreme Court Ruling (9.30am) on whether Parliament should get a vote on the triggering of Article 50 which commences official divorce proceedings from the EU. Another unfavourable ruling for Theresa May’s government (High Court ruled PM can’t simply use royal prerogative) might give GBP a boost, prolonging the process and MPs could always vote against (slim chance). A favourable ruling, however, would likely see GBP weaken given the PM would be allowed to trigger it by end-March without consultation.

Data-wise, January preliminary Eurozone PMI Manufacturing and Services are seen mixed with Manufacturing easing from last month’s near 6-year highs and Services regaining some lost ground from their 2016 peak. The same trend is expected in France and Germany. UK Public Borrowing is seen falling back close to the 12-month average in December after November’s spike.

In the afternoon, US PMI Manufacturing is seen edging up to its highest since March 2015 while the Richmond Fed Manufacturing drops back after four straight months of improvement from a more than 3-year low. US Existing Home Sales are expected to ease from last month’s near 10yr highs.

Speakers today include the ECB’s Lane and Praet, the Head of the Eurogroup Dijsselbloem followed by the ECB’s Lautenschlaeger.

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

• Oil prices rebound on weaker dollar, production cuts
• EnQuest buys 25% stake in BP's Magnus field in North Sea
• Dixons Carphone beats forecasts for Christmas trading
• Italian accounting errors force BT to warn on 2017 and 2018 profit
• Gold prices ease as dollar recovers from lows
• IG Group H1 pretax profit up 7% on higher activity in volatile mkts
• Laird sticks by its FY underlying pretax profit guidance
• Genel expects up to 34% drop in 2017 production
• WH Ireland Group sells a property in Manchester
• Pub group Marston's says trading over Christmas & New Year period good
• UK builder Crest Nicholson says on track to build more homes as profits rise
• easyJet says Q1 in line with expectations, forward bookings ahead
• Miner Rio Tinto hiring commodity market analysts in Singapore