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

UK 100 called to open +35pts at 6220 having rallied hard from yesterday’s lows to regain the key 6200 level overnight and retest the highs. Overnight oscillation of 6220 bodes well in terms of a pause before another jump higher. In fact, there is potential for the overnight breakout beyond 2-day falling highs to result in a bullish inverse head and shoulders reversal back to end-May highs of 6290. Watch levels: Bullish 6230, Bearish 6205.

The positive opening call comes as Asia bourses rebound, taking the baton from and building upon US gains, refusing to yield to the usual US Jobs report nerves. This despite the ECB delivering another dovish update and some mixed PMI prints (Australia and Japan up, China down) overnight. Help comes in the form of oil regaining $50 post-OPEC and commodities prices picking up marginally in spite of US dollar strength.

US bourses closed in positive territory following an impressive turnaround in the oil price. With crude futures initially tanking after OPEC said (surprise surprise) it had not agreed on anything to do with oil supply (but why should it have?), they were able to recover back towards the psyche $50 level on another drawdown in US inventories. US employment data was in-line ahead of today’s jobs report and we heard from the Fed’s Kaplan who said a summer rate hike is appropriate.  

Today could therefore be a risk-on Friday in the US, with good data seen as good, though note other major global indices may well prefer to ponder the other big risk event slated for June (that’s the Brexit vote by the way, not the next person to die in Game of Thrones).

Gold is set for its 5th weekly decline in a row, a potentially bullish signal for equity markets. While a lack of volume ahead of US (**fanfare**) Non-Farm Payrolls should be noted, consensus sees the data meeting expectations (at least) which should strengthen the US Dollar, deterring those speculating on Gold. Since the US outlook seems upbeat, expect little in the way of safe haven demand also.

In focus today will be - surprise, surprise - this afternoon’s US Employment Report given its significance within the wide spectrum of data that the US central bank - the Federal Reserve - monitors whilst debating the path for US monetary policy that ultimately has global market-moving ramifications.

And with rhetoric of late increasingly suggesting that a summer rate rise was a real possibility, any suggestion that the US jobs market is picking up steam more quickly than expected could well heighten expectations of the trigger being pulled again mid-month.  What the Fed's Evans has to say early doors about policy timing and indeed the Brexit debate could be interesting after the European open.

This morning’s final prints for European May PMI Services are expected to be more positive than we saw for PMI Manufacturing earlier this week with everybody (FR, DE, UK, IT, ES) forecast to post results handsomely above the 50 breakeven level that separates growth from contraction.

Back to US jobs and this afternoon’s Non-Farm Payrolls additions are seen confirming yesterday's ADP print of 160K, while unemployment rate may fall back to early 2016 lows of 4.9%. However, with these simply on-trend, the more pertinent data is surely average hourly earnings (could hint at increased purchasing power and welcome inflationary pressure) and the still depressed participation rate (seen backtracking) for their truer gauges of underlying jobs market progress.

Thereafter, however, the final reading for US PMI Services is expected to be confirmed lower in May, which won’t be what the Fed wants to see, especially in light of that awful run of regional manufacturing data (Empire, Philly, Richmond, Dallas, ISM New York - all disappointed). But at least it’s still seen growing while the ISM version should holding up well into growth territory. While Factory Goods Orders growth may have accelerated in April, much like Durable Goods orders these can be rather volatile.

After European equity markets have closed for the week, we have the Fed’s Brainard speaking and her cautiousness (especially on international events) could help temper June rate hike fears. The weekly Baker Hughes Rig Count may offer updated clues about the state of stateside oil production. Still in decline or bottomed out as Oil back at $50/barrel attracts benched players back to the game.

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

• Glencore expands Australia bunker fuel business
• Astrazeneca says completes US licensing agreement with Ironwood
• UBM says divests electronics media portfolio
• Goals Soccer Centres raises £16.75m in placing
• ICAP says EBS Brokertec signs $65m deal with China Foreign Exchange Trade System
• BP agrees to pay $175 mln to settle claims with shareholders
• London copper eyes fifth weekly fall in six weeks
• Brent crude oil stabilizes around $50 after OPEC meeting
• Savills Invests in Online Hybrid Estate Agency