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

UK 100 Index called to open +20pts at 7385, testing yesterday’s highs which suggests a desire to extend the current rebound from 7300 towards the ceiling of the index’s 3-week channel at 7440. Bulls require a break above 7390 if they want to see 7440 and any chance of a bullish triple bottom back to 7600. Bears need a test of 7375 overnight lows to open the door for a a retrace towards 7300. Watch levels: Bullish 7390, Bearish 7375.

Calls for further gains come after better than expected China PMI Manufacturing, back around February highs, even if Non-Services gave up some ground to its lowest since early 2016. This is some welcome good news from Asia following recent geopolitical woes, building on yesterday’s solid US GDP/ADP prints, compounding risk appetite at the continued expense of safe havens (Gold, JPY, CHF and bonds).

Asian equities are mixed despite a positive close on Wall St, with China and Hong Kong in the red amid results-inspired bank sector weakness. Japan’s Nikkei, however, is up strongly as Yen weakness boosts financials and Australia’s ASX performs just as well as metals fight off USD strength and despite Energy reacting to another oil price drop overnight (US refinery outages from hurricane Harvey may boost stockpiles).

US equity markets closed higher across the board on Wednesday, however there was a notable divergence between indices. The Tech-focused Nasdaq outperformed peers as the sector made significant gains, including Apple notching a fresh record high while Netflix rallied over 3%, which also helped the S&P 500 to its fourth consecutive positive close. The Dow Jones underperformed as insurer Travelers weighed as Tropical Storm Harvey continues to batter Texas.

Crude Oil prices have failed to mount a significant recovery after US government EIA inventories, compounded with the continued closure of Texan oil refineries as a result of Tropical Storm Harvey, hit demand for the commodity yesterday. With that said, both Brent and US crude are off overnight lows, however remain hindered by support-turned-resistance at $50.8 and $46 respectively.

Gold has continued to pare Monday’s gains as geopolitical tensions subside and the US dollar maintains its recovery. A suspected ‘fat finger’ trade saw the precious metal dip to $1298 momentarily overnight, however has since recovered to $1303 4-month intersecting support. The US dollar will remain a key driver of gold sentiment as it approaches key falling highs resistance.

In focus today, exactly one week before the ECB’s next monetary policy update, will be Eurozone Consumer Price Inflation and Unemployment (10am). Whilst German Inflation yesterday came in as expected, expectations are for the headline economic area’s print to tick slightly higher, which could inspire Euro bulls following the currency’s 1.6% fall from Tuesday’s highs. Meanwhile, the Core print is expected unchanged alongside Unemployment, seen unchanged at a 9-year low.

This afternoon’s US data comprises of Personal Income and Spending figures (1:30pm) are both expected to tick higher in July, with the former rebounding from a 7-month low while the latter bucks a 3-month downtrend. Inflationary PCE figures, whilst seen unchanged, could move US markets should the actual prints deviate from expectations. The Chicago PMI (2:45pm) is expected to tick marginally lower in August, before US Pending Home Sales (3pm) are similarly seen falling for the month of July.

In terms of central bank speakers, this morning sees hawkish Bank of England MPC member Saunders (8:25am) share thoughts on a visit to Wales, while this afternoon, Dallas Fed governor Kaplan (4:30pm), a neutral FOMC member, takes part in a moderated Q&A session in Texas.

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

• AstraZeneca has no comment on report it sought to buy Daiichi Sankyo
• Walker Crips says Rodney Fitzgerald will be stepping back from his position as CEO
• British America Tobacco changes regional management structure after Reynolds deal
• Eddie Stobart Logistics says HY underlying revenue up 13 pct
• Online betting boosts profits for Ladbrokes Coral
• Premier Foods says completes signing of strategic global partnership for Cadbury cake with Mondelez
• Jimmy Choo reports H1 revenue 201.6 mln stg versus 173.1 mln stg year ago
• Restaurant Group says HY adjusted pretax profit down 30.4 pct
• Hays posts FY operating profit of 211.5 mln pounds
• After N. Korea missile, Britain and Japan agree closer security ties
• Grafton Group H1 adjusted operating profit up 19 pct
• Australia's mining index hits 3-yr high as stronger U.S. dollar aids miners
• London copper set for 3rd monthly gain as China revs up demand hopes
• Gold inches lower as dollar gains on strong U.S. economic data
• Gasoline spikes, crude slumps as Harvey wreaks havoc on U.S. refiners