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

UK 100 Index called to open +5pts at 7330, still making an upside test on this week’s highs, trying to overcome a trendline of support-turned-resistance that goes back to mid-August. Bulls need a break above 7340 for a rally back to August falling highs at 7385. Bulls require a breach of rising support at 7300. Watch levels: Bullish 7340, Bearish 7300.

Calls for another positive yet muted start come after a similarly lacklustre finish on Wall St and a mixed bag from Asia overnight. The former continues to digest a framework of Republican tax reform which already appears to be encountering hurdles. The latter is mixed after the USD came off its highs to counter  decent Japanese data and optimism ahead of China’s Golden Week.

Japan’s Nikkei and the Aussie ASX have reversed yesterday’s trend, the former giving up ground amid fresh Yen strength (USD pullback, better Japanese macro data) while the latter’s commodity sensitive names welcome the USD pullback, especially Oil which is paring losses after correcting from recent supply-concern highs.

China (and Hong Kong) are positive after the PBOC allowed the renminbi’s trading band versus the USD to weaken to a 6-week low (trying to fuel inflation?) ahead of next week’s Golden Week holiday and October’s 19th Communist Party leadership meeting.

UK Company headlines include: Aviva sells Italian JV to Banco BPM for €265m. Qinetiq says trading in line with expectations; outlook for group performance this financial year unchanged. Carillion H1 revenues flat, underlying pre-tax profits -40%, more provisions for services, goodwill impairment for construction. FY results to be lower than current market expectations.

Purplebricks says trading in UK and Australia course to meet full year guidance; US launch going well. Beazley early estimate of Atlantic hurricanes and Mexican earthquakes to reduce FY17 earnings by $150m, but there is significant uncertainty surrounding cost. Biffa Chairman Steve Marshall has passed away.

US equity markets closed mostly positive on Thursday as investors continued to digest President Trump’s framework for tax reform, most notably with the small-cap Russell 2000 closing at a fresh record high. Amongst large-cap indices, the Dow Jones outperformed as McDonald’s provided the most gains, the S&P 500 also climbed, however closed just shy of a record closing high, while the Nasdaq finished marginally above breakeven.

Crude Oil prices remain under pressure having retreated to rising lows support yesterday evening. Following a third straight day of declines after notching fresh multi-month highs, both global benchmark Brent and US counterpart have been subject to further profit taking. Brent is holding above rising lows support at $57, while US crude is testing support at $51.5.

Gold has traded sideways overnight, off yesterday morning’s 1-month lows as the US dollar retreats from 5-week highs. While it has retreated from its overnight highs of $1289, the precious metal is holding above support at $1284. A range of central bank speakers, including Bank of England Governor Mark Carney, will likely influence the non-yielding asset throughout the day.

In focus today will be the final reading of UK Q2 GDP and accompanying growth metrics (9:30am). The headline growth measure is expected to be confirmed at 1.7%, its lowest since July, while both Index of Services and Business investment decline alongside Mortgage Approvals.   

This morning’s European data comprises of German Unemployment (8:55am), seen unchanged in September, and Eurozone CPI (10am) ticking marginally higher to a 5-month high while Core remains stubbornly unchanged. This afternoon, US Personal Income and Spending figures (1:30pm) are expected softer in August, the Chicago PMI (2:45pm) is seen marginally lower while the University of Michigan Sentiment (3pm) is expected unchanged.

The second and final day of the Bank of England’s 20-year independence conference sees IMF head Lagarde address the congregation (11:30am), while Bank of England MPC members Cunliffe and Broadbent (1pm) take part in a panel discussion before closing remarks from BoE Governor Carney (4pm). The Fed’s Harker (4pm) completes the speaker schedule at a fintech events on consumers and banking.

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

• London house prices fall for first time in 8 years – Nationwide
• Carillion warns on full – year results
• Daily Mail & General Trust announces disposal of admissions education business
• Costain Group announces Greater Manchester waste contract
• Beazley sees earnings hit of about $150 mln from hurricanes, Mexico earthquakes
• Purplebricks says H1 revenues in UK likely to be more than double same period last year
• Aviva sells Italian JV to Banco BPM for 265 mln euros
• Oil mixed but set for weekly gain
• Biffa, Wincanton Announce Death of Chairman Steve Marshall
• Qinetiq says trading in line with expectations