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

UK 100 Index called to open flat around 7300, straddling the round number and holding between yesterday’s 7285 support and 7310 resistance. Bulls still need a breakout above last week’s 7320 highs to open the door for a rally to August falling highs at 7385. Bears need a breach of 7285 to challenge rising support at 7260. Watch levels: Bullish 7320, Bearish 7285.

Calls for a flat open come in response to another risk-off close on Wall St, especially in Tech (sector rotation?). This after a fresh escalation in the war of words between North Korea and the US, with the negative baton being taken up by Asian bourses overnight.

This has perked up safe haven demand for Gold, bonds, the Yen and Swiss Franc, although relative calm among risk assets suggests many expect the move to again be short-lived. However, the rally in Oil prices (Brent Crude >2yr highs; US Crude 4-month highs) is helping buoy sentiment thanks to a Kurdish referendum that could threaten Iraqi exports, extending a summer Oil rebound.

In UK Index headlines include: United Utilities H1 revenues to be just under 3% higher than H1 last year, operating profit also higher. Thomas Cook Summer 2017 closing out as expected; Winter/17/18 +6%; backs FY17 underlying profits view; New CFO for 2018; enters strategic partnership to grow own-brand hotel portfolio.

Informa acquires Dove Medical Press for undisclosed sum. Close Brothers FY17 pre-tax profit +13%; growth across all divisions. Card Factory declares special dividend; H118 pretax profit -14%. AA reports robust financial performance in Roadside and strong in Insurance and appoints a new permanent CEO.

US equity markets made a negative start to the week as perceived sector rotation dented the Tech sector, while a re-escalation of rhetoric from North Korea hurt risk appetite. As a result, the Nasdaq underperformed, suffering its worst session in three weeks, while the S&P 500 dipped on the Tech sector’s worst performance since mid-August. The Dow Jones also fell as weakness from Visa, Boeing and McDonald’s offset Home Depot and ExxonMobil gains.

Brent Crude traded a 27-month high overnight as the Kurdish referendum stokes supply concerns, while strong demand from China also aids sentiment. The global benchmark traded above $59.1 a barrel for the first time since July 2015, exacerbating the spread between Brent and its US counterpart, which is struggling to overcome resistance at $52.2. Despite coming off overnight highs of $59.5, Brent is holding around $59.

Gold has extended its bounce overnight as the ramp-up in aggressive rhetoric by North Korea aids safe-haven demand. This has helped the precious metal rally back above $1300 per troy oz., climbing to an overnight high of $1314 despite a stronger US dollar. Any further escalation in US-North Korea warmongering would see further safe-haven demand, although a US dollar breakout could temper gains.

In focus today will be a range of central bank speakers from Europe and North America, culminating with Fed Chair Janet Yellen at 5:45pm who speaks about “Prospects for Growth in Shifting Global Economy" giving her an opportunity to bolster last week’s hawkish policy update.

Other speakers include ECB Chief Economist Praet (1pm) who chairs a lecture on “Good Pension Design". Fed voter and notable dove Brainard (3:30pm) speaks about "Disparities in  Labor Market: What are we missing?” along with alternate members Mester (2:30pm; "Prospects for Growth: Reassessing the Fundamentals") and Bostic (5:30pm; "Economic outlook and monetary policy"). Note the latter two both become FOMC voters next year through committee rotation.

In terms of data, UK BBA Mortgage Approvals (9:30am) are expected to climb to a 6-month high alongside the US S&P/Case-Shiller House Price Index (2pm), which is expected to continue growing strongly. Thereafter, US Consumer Confidence is seen retreating from a 5-month high in tandem with the Richmond Fed Manufacturing Index, itself at a 3-month high, while New Home Sales are expected to rebound from a 2017 low (all 3pm).

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)

• United Utilities sees higher H1 profit, revenue. Says H1 trading in line with expectations
• Oil rises to 26 – month high; Turkey threatens to cut Kurdistan oil pipeline
• Uber CEO is considering travelling to London to meet the regulators – FT
• Close Brothers Group posts FY adjusted operating profit of 264.8 mln pounds
• Close Brothers FY profit rises 13 pct
• Card Factory to pay special dividend after H1 sales rises
• Card Factory says HY pretax profit down 14.1 pct to 23.2 mln pounds
• AA's interim core profit flat, appoints CEO
• Informa announces acquisition of Dove Medical Press
• Former Airbus UK chief Paul Kahn joins Cobham in senior role
• Time Out says HY group revenue increased by 13 pct
• Unite Group says sales perfo will deliver annual rental growth at mid to upper end of +3-3.5% expectations
• Thomas Cook enters into hotel partnership with LMEY, outlook unchanged
• Gold steady, North Korea worries support
• London copper, zinc recover in line with oil