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

UK 100 called to open -15pts at 6120, having retraced all the way to the neckline of Friday's bullish inverse head and shoulders reversal. This puts us equidistant from May's channel ceiling and floor. If the 6120 level can hold up as support, a bounce would help maintain the rising trend from Thursday’s 2-month lows. Can the index regain may's 6220 channel ceiling or are we set for a breakdown and retrace to the floor? Watch levels: Bullish 6140, Bearish 6105.

The negative opening call comes as Asian bourses build upon mild US losses after another Fed member (Harker, yet another non-voter) suggested 2-3 rate hikes by year end, adding to June rate hike speculation and  sending the US dollar higher. This has been to the detriment of Oil, which sits back at 2016 rising support, although divergent performance in the commodities space could in fact signal healthy correction.

Japan’s Nikkei in the red, with exporters (appliances, autos) leading the way south as the Yen hold its gains versus the US Dollar. Note Australia's ASX being held back by the mining and energy space as raw materials prices remain under pressure and a weaker Aussie dollar offers little respite.

China stocks down for the first day in three as commodities struggle under the weight of a strong US dollar and fears that the raw material sell-off may have legs amid a sputtering economic rebound. Also hindering sentiment are the flames of credit concern being fanned by a renowned banking analyst warning that a hitherto encouraged credit binge may require a huge bailout.

US bourses closed off yesterday’s session mildly negative with pressure from above coming on the back of fresh rate hike expectations. A trio of Fed speakers - both voting (Bullard) and non-voting (Williams, Harker) - hammered home their single message of 2-3 hikes this year with June perhaps being the next opportunity for one of them. The US Manufacturing PMI disappointed yesterday, so today’s Richmond Fed Manufacturing will be watched closely.

The US Dollar Basket may look a little toppy, but it’s supported by bullish technicals this morning which should keep up the pressure on precious metals with Gold back at $1244 support. Silver has broken down with bears targeting $16.

Crude prices continues to roll over as supply outages in Canada and Libya begin to ease, leaving little fundamental support for oil save an ongoing strike by French oil workers. Falling highs on both Brent and WTI into the second half of May should see tests of $47.70 and $47.55 respectively in the coming days.

In focus today will be the fallout from this morning’s German GDP update which confirmed an improvement in Q1 growth which may help with the outlook for the wider Eurozone region. Thereafter we have German ZEW Business Surveys seen improving in May with the Eurozone print also of interest. UK CBI Trends data will be watched in light of the fiercening Brexit debate and strong UK Retail Sales data released last week.

After all that backtracking Fed speak yesterday - non-voting Harker adding to the fray overnight - note a distinct absence of Fed member's on today's schedule with ECB peers taking their place. We're not sure if that is a good or bad thing. However, expect talk about deflation and struggles rather than growth and rate hikes.

In the afternoon, all eyes on the Conference Board Leading Economic Index for China as well as the US Richmond Fed Manufacturing Index given that weak PMI Manufacturing figure yesterday and those awful Empire State and Philly Fed numbers last week. US New Home Sales are forecast to have rebounded in April, further supporting that surprise jump in Consumer Confidence we had two Fridays ago.

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)

• Keller says on course to meet board's expectations for FY
• GVC Holdings Q2 avg pro forma revenues per day rise
• Entertainment One full-year pretax profit +9%
• Allied Irish Banks says Q1 NIM at 2.09%
• Thames Water names Steve Robertson as new CEO
• Kingfisher says sales growth driven by UK, Poland - Q1 underlying sales +3.6%
• UK lender Paragon's first – half profit rises
• Clydesdale Bank posts 2.5% rise in H1 net interest income
• Severn Trent FY underlying pretax profit £523m, -3.2%
• Old Mutual says continuing to assess options regarding managed separation
• Big Yellow FY adjusted pretax profit +24%
• BGEO Q1 profit rises about 40% year-on-year
• Nationwide Building Society annual profits +9% to £1.3bln
• De La Rue says its expectations for current year are unchanged
• UK Mail continues to expect performance to be H2 weighted
• Aveva Group reports 18% drop in full – year pretax
• AA PLC exploring options on Irish business
• CVC's Evonik shares placed at €25.50 apiece – JP Morgan
• Card Factory Reports Lower Sales Growth Amid Weak Consumer Confidence
• Vectura Group plc Vectura & Propeller Health announce collaboration
• Cranswick FY16 Pretax Profit Rises
• Halfords Acquires Welsh Bike Retailer Tredz