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

UK 100 Index called to open +10pts at 7245, having held its rebound from 7225 to trade around 7240 overnight. This keeps the index in a 7225-7260 range since the breakdown on Wednesday, with a trend of falling highs to overcome. Bulls need to see a break back above 7260 if they want to see 7300. Bears want another test of 7225 to open the door for a drop towards 7160. Watch levels: Bullish 7260, Bearish 7235.

A positive opening call comes as sentiment gets a boost from banking sector results and an oil price rebound on hopes of an extension to OPEC production cuts. This offsets a negative session in Asia where investors took profits and balked at Trump saying he wants to renegotiate a South Korean trade deal and that there was the possibility of a major conflict with North Korea.

Australia’s ASX outperforms, just positive as IT names offset weakness in materials which is thankfully limited by the oil price bounce. Japan’s Nikkei dented by the Yen off its lows, some disappointing macro data and weakness among financials.

This morning, continuing the consensus-beating good news from banks this week note Barclays Q1 pre-tax profits more than doubled although impairment charges also rose and legacy legal issues remain. RBS has posted its first profit since September and reiterated FY guidance, while Swiss giant UBS’s shares are called 3% thanks to Q1 benefiting from strong wealth management performance. The UK government has also cuts its bailout stake in Lloyds to below 1%. 

US equities closed mostly flat, although the Nasdaq outperformed (another record high) on well-placed expectations of solid results from Alphabet Amazon and Microsoft, even if Intel disappointed. Investors were also relieved to hear Trump decided not to terminate NAFTA, some good news after his tax news underwhelmed, and that progress is being made with the Healthcare bill, which could unlock the door to funding the tax cuts and infrastructure spending markets are so desperate for.

Crude Oil prices have bounced back from yesterday’s sharp sell-off (Brent >$52; WTI >$49), one that was driven by continued fears about rising US output following this week’s inventory data compounded by Libya bringing its largest oil field (Sharara) back on-line, merely adding to headwinds OPEC already faces with its production cut efforts.  2-week downtrends yet to be overcome however.

Gold remains rangebound $1265-70 after a 2-week sell-off, albeit holding a 1-month uptrend. The precious metal is supported by a pickup in demand from China and India, however, geopolitics and US monetary policy outlook may take over in terms of short-term drivers.

In focus is UK GDP (9.30am) with consensus expecting a sequential slowdown in growth to 0.4% in Q1 from 0.7% in Q4, the slowest since Q1 last year. On an annual basis, however, growth should jump to 2.2%, the fastest since Q2 2015, surely cheering the Brexiteers.

Eurozone Consumer Price Inflation (CPI; 10am) will likely echo Germany’s improvement towards February highs, however, more attention will surely be paid to a forecast Core print of 1.0% - highest since March 2016 - after what ECB President Draghi said yesterday in terms of what he wants to see before normalising Eurozone monetary policy further.

US GDP (1.30pm) likely slowed markedly in Q1, back to levels close to that of the same quarter last year, the same thing visible in Personal Consumption, although inflation metrics will please the hawks, with Core PCE improving to the magic 2.0% level and Employment Costs edging higher.

Chicago PMI (2.45pm) may give up a little ground in April while Uni of Michigan Consumer Confidence holds firm and we expect results from Chevron, Colgate-Palmolive, Exxon Mobil, General Motors and Goodyear.

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

• Barclays Q1 profit doubles, misses bond trading boom. Q1 markets income falls 4 pct
• RBS posts first quarterly profit since Q3 2015, net interest margin rises to 2.24 pct
• UK house prices fall again in April as buyers face Brexit pinch
• Insurer Hastings posts higher first – quarter gross written premiums
• Sky Network Television says OIA consents granted for proposed merger of Sky and Vodafone
• Laird says Q1 revenue in sterling was 197 mln stg
• Just Eat's chairman takes leave of absence for medical treatment
• DFS Furniture appoints Ian Durant as chairman
• UK government cuts stake in Lloyds bank to below 1 percent
• Old Mutual Wealth reports Q1 funds under management of £122.3b, appoints Tim Tookey as CFO
• Old Mutual to sell India insurance JV stake to Kotak for $202 mln
• Ultra Electronics Holdings full year expectations remain unchanged
• Australia's BHP Billiton falls to near 6-mth low, commodity prices soft
• Bank of Ireland organic capital generation offset by pension deficit
• Gold set for worst week in seven as investors opt for riskier assets
• Oil rises on potential OPEC cut extension, but still faces 2nd weekly loss
• Copper finds support despite weak China outlook.