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

UK 100 Index called to open +5pts at 7625, still doing its festive best to make another fresh high into the New Year. Bulls need a break above yesterday’s early record peak of 7635 to extend an already generous 4.6% Santa rally from 7300 on 8 Dec. Bears are equally eager for any downside test of 7615 that could trigger a retrace. Watch levels: Bullish 7635, Bearish 7615

Calls for another muted yet positive open come after gains on Wall St (Dow Jones 71st record high of 2017 - a record in itself) were replaced by a mixed session in Asia overnight. However, with the latter is still set to close the year on a high, the region putting it its best annual performance since 2009 to keep the 2017 global rally alive and well into the new year.

Continued USD weakness is keeping both the UK UK Index and German DAX from making too much progress beyond breakeven, hampered by a stronger GBP and EUR. However, gains for dual listed Miners down-under, in spite of a negative close for the important Aussie ASX index, offers hope to buoy London year-end sentiment thanks to strength for Copper and Oil on a combination of global growth optimism and expectations of tighter supply.

Corporate news is understandably limited, although Balfour Beatty has sold an extra 7.5% stake in in the UK’s M25 motorway operator Connect Plus for £62m (total sold 20%) which should result in higher profits and year-end cash than recently suggested. Reuters reports that Volkswagen will petition Germany's constitutional court, to try and overturn the appointment of a special auditor to investigate the "Dieselgate” scandal.

Crude Oil prices remain strong, with Brent Crude just shy of its post-Christmas $67.14 high while West Texas advanced even further overnight to crack the $60/barrel mark. Continued USD weakness helps, as does bullish US inventory data, although Brent’s advance has slowed amid progress towards resolution of the Forties North Sea pipeline closure.

Gold is equally assisted by the weaker USD, helping it above $1295, along with Trump further threatening China with excessive tariffs if it doesn’t stop helping North Korea. Interestingly, this takes the yellow metal’s own Santa rally to 4.8%, almost the same as the UK’s UK Index .

In focus today, as data points to close out the year, we have preliminary Spanish Consumer Inflation (8am) for December, forecast to have slowed up annually. The same may prove true for German Consumer Inflation (1pm) this afternoon, although its monthly rate of growth may in fact have picked up. After that all we have will be the latest US Baker Hughes US Rig Count (6pm) to give us clues on US production, before we head of for another long weekend into the New Year. Enjoy!

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