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

UK 100 Index called to open +10pts at 7080, after an overnight bounce off 7070 maintained the trend of rising lows from mid-December. A test of 7095 yesterday bodes well for a breakout at 7100 to re-test of all-time highs of 7130. Bulls are looking for a break above 7085 this morning to open the door for a repeat test. Bears will want to see 7070 give way to jeopardise the aforementioned uptrend. Watch levels: Bullish 7087, Bearish 7065.

Calls for a positive open comes as optimism remains thanks to gains on Wall Street and in spite of a mixed session in Asia amid thin holiday trading  between Christmas and the New Year. Oil prices holding around recent highs is helping sentiment regarding OPEC’s production cut actually working while the USD remains firm on solid US macro-economic data, expectations of Fed rate hikes and a looming Trump stimulus fuelled presidency.

Japan’s Nikkei is breakeven with the benefits of a weaker Yen being offset by a plunge in Toshiba shares on the prospect of a multi-billion dollar hit to part of its US nuclear business. Australia's ASX is outperforming thanks to some renewed buoyancy in metals prices and oil price stability. Note China in the red on fresh currency and liquidity concerns and despite strong industrial profits growth.

US markets extended their gains and flirts with all-time highs helped by gains by Oil and optimism regarding what Trump can do for the economy following his inauguration in a few week time. Note this will coincide with the start of the all-important Q4 stateside earnings season. Note the Dow Jones still knocking on the door of 20,000.

Gold has seen its bounce continue to break above $1140, up for a fourth straight session assisted by technicals, thin volumes and very minimal USD weakness. Falling highs are yet to be broken though with safe haven demand not up markedly and a hiking Fed representing a headwind in terms of absent yield.

In focus today, during this quiet intra-holiday period, may well remain Monte dei Paschi di Siena after the European Central Bank (ECB) revised its calculation for what the battered Italian bank requires to be recapitalised. A new figure of €8.8bn is well above the originally thought €5bn (which failed to be raised privately last week) and almost half the €20bn the government has approved to recapitalise the whole troubled Italian banking sector. Any further dragging of feet could see both figures increase further on account of what has been identified as rapidly worsening liquidity positions.

Data-wise November UK BBA Mortgage Approvals will be watched for its read across to the all-important UK Housing market and popular UK Housebuilders. Consensus is looking for 41.5K approvals last month which would represent an improvement on October’s 40.9K. This would also maintain the rebound from September’s post-Brexit trough and 18-month lows of 37.2K, and take it almost halfway towards recovering 2015/16 highs just shy of 47K.

This afternoon US Pending Home Sales growth is seen accelerating in November after a stagnant October (0.5% vs 0.1% prev) although the annual pace of growth may attract more interest if it continues to slow (1.6%?) from September’s (2%+) peak and rebound from a negative August.

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

• Sports Direct to Sell Dunlop Brand to Sumitomo Rubber for $137.5M
• Bovis Homes Lowers 2016 Sales Volume Outlook
• Italian Bank's Cost For a Rescue Jumps Italian Bank to Need A Bigger Rescue -- WSJ
• Woolworths sells fuel business to BP for nearly A$1.8b