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

UK 100 Index called to open +30pts at 7605, holding yesterday’s rebound from 7535 lows but with 7640 turning resistance overnight after yesterday’s breach of recent support and the floor of a multi-week up-channel. Bulls need a break above 7640 to regain the channel. Bears require a breach of 7608 overnight lows to revisit yesterday’s lows. Watch levels: Bullish 7640, Bearish 7610

Calls for a positive open are supported by gains on Wall St where the Nasdaq and US Tech sector were helped by exuberance over Apple’s positive results and winning the race to become the first US listed company valued at the magic $1 trillion.

That said, Asia slid into the red overnight amid ongoing US-China trade tensions and news that July’s China Caixin PMI Services fell back to April/May levels of 52.8, reversing June's improvement to a Q2 high of 53.9 and missing consensus of a milder pullback to 53.6. This add to existing tariff-related China pain, hurting Miners like Rio Tinto and BHP Billiton in Australia overnight.

UK Index buoyed by yesterday’s GBP weakness after the BoE delivered a dovish hike, although currencies are largely flat since, ahead of this afternoon’s US Non-Farm Payrolls report. Gold has extended a multi-month downtrend, amid USD resilience, while Oil prices are lower, as rising global supply weighs on commodity markets and UK Index Energy names.

Corporate news this morning includes Royal Bank of Scotland Q2 total income £3.4bn beats £3.2 est, operating profit £613m beats est. loss of £340m, CT1 ratio 16.1% beats 15.5 est, NIM -3bp; Subject to finalizing DoJ settlement, divs to resume at 2p; aims for regular 40% pay-out; FY guidance unchanged; will consider special returns but unlikely until 2019

IAG H1 total revenue +3.1% YoY, op. profit pre-exceptionals +17.4%, like-for-like passenger unit revenue -1.9% (+2.3% at constant FX), like-for-like fuel costs +15%, non-fuel costs -2%. Reiterates FY profits guidance, seeing improvement in passenger rev. and non-fuel unit costs. Millennium & Copthorne Hotels Q2 RevPAR -5.3%, pre-tax profits -22%,div unchanged.

Mondi H1 underlying EBITDA +17%, pre-tax +6%, op cash flow +18%, dividend +12.3%; trading positive into H2, pricing supportive, but H2 to be impacted by seasonality. Expects cost pressure across base, mitigated by cost cutting. Cobham H1 pre-tax profits boosted by lower costs and disposals; reiterates FY18 guidance.

Paddy Power Betfair US subsidiary FanDuel agrees to work with Boyd Gaming in US sport betting and online casino markets; Boyd takes 4-5% stake in FanDuel. William Hill posts £820m H1 pre-tax loss (£93 profit in H1 2017), taking big impairment after new UK rules on Fixed Odds Betting Terminals (pre-exceptionals -13% YoY to £96.3m), even after revenues +3%; div flat at 4.26p.

AstraZeneca says EMA grants orphan designation for Selumetinib for Neurofibromatosis Type 1; potential benefit being explored in PI/II SPRINT Trial, full results expected later this year. Intertek buys Alchemy, industry leader in People Assurance solutions for food industry, for $480m.

Pets at Home Q1 like-for-like revenue +6.1% YoY, retail +5.3%, vet group +13.6%, won’t open two new stores for which £1.6m lease arrangements already committed. FY profit and cashflow guidance reiterated. Essentra H1 like-for-like revenue +1.3% YoY, op. profit 4.7%, dividend maintained, FY revenue outlook stable.

In focus today will be the US jobs report with the famous Non-Farm Payrolls (1:30pm) expected to show the slowest level of net additions since April, albeit still close to the 200K long term average, while Unemployment Rate falls back to 3.9% and Average Hourly Earnings (inflationary read-across) holds firm at 2.7%.

In other macroeconomic data, the latest PMI Services are being published globally, with Germany (8:55am), the Eurozone (9am), UK (9:30am) and US (2:45pm) all likely confirmed weaker in July, albeit still expanding and well above the 50 level that separates growth from contraction.

June Eurozone Retail Sales (10am) growth is seen unchanged at 1.4% YoY (a further blow to ECB hopes of more inflation), while US ISM-Non Manufacturing PMI (3pm) in June may have cooled to 58.6 after a strong 59.1 in May.

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