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

UK 100 Index called to open -10pts at 7465, holding just below yesterday’s 7485 best and June falling highs resistance at 7495. Bulls hope the narrowing range since yesterday is a bullish flag that will help the index break above 7500. Bears need a break below 7460 for a retrace towards 7400.  Watch levels: Bullish 7480, Bearish 7460.

Calls for another slightly negative European open comes as Asian markets post a weak session, echoing the mixed risk-off close on Wall St ahead of today’s US jobs report. Note however, the UK 100 may find some solace in buoyancy among metals prices and the GBP holding around its lows of yesterday on BoE Governor Carney’s dovish statement. Unfortunately, the strong EUR (compounded by GBP and USD weakness) continues to weigh on the German DAX.

The Aussie ASX is lower after financials fell on news of Commonwealth Bank of Australia being sued for money laundering law breaches and the RBA central bank cut growth forecasts due to Aussie dollar strength (partly attributable to US dollar weakness). Higher metals prices not helping. Japan’s Nikkei underperforms as the Yen remains strong  (again blame the weak US dollar), while the Topic index sags on losses among utilities and materials.

UK Index corporate news this morning includes Royal Bank Of Scotland which has booked its first half year profit in three years despite £790m restructuring costs in Q2; H1 £1.95bn pre-tax, H1 £939m net. Merlin Entertainments 2017 profit outlook is in line with consensus, making good progress towards 2020 milestones. Pearson reports an H1 pre-tax loss of £10m, cuts its dividend to 5p vs 18p and plans a £300m share buyback. EasyJet announces its July load factor rose to 96.8% from 95.8%.

US markets succumbed to risk-off mentality yesterday evening, adopting their usual caution ahead of today’s US jobs report, but also using the excuse of a grand jury appointment to investigate Russian US election interference and weak macro data to cap the recent rally. The Dow Jones did manage to hold above 22K, even posting small gains, although the S&P and Nasdaq both closed lower, Apple -1%, giving up post-results gains. Lower oil didn’t help either, weighing on Energy.

Crude Oil sits just above yesterday’s lows (Brent $51.8, US $48.85) after yet another post US inventory report sell-off, despite what appears to be unrelenting US dollar weakness. Wednesday's US report may have helped prices jump, with record demand for US gasoline, however concerns about ever rising OPEC crude supply are proving too much.

Gold remains in a narrow $1267-70 range since yesterday afternoon, pausing after its rebound from $1260. Whilst the safe haven is buoyed by persistent US dollar weakness it is also held back by falling highs resistance since Tuesday’s $1274 peak following its July rebound. A break higher or lower likely needs a meaningful change to risk appetite, something that perhaps only this afternoon’s US jobs report will deliver.

In focus today is the US monthly Jobs report. Much is always made of the jobs figures itself, but the Fed is more focused on improving growth versus waning inflation. So Avg. Hourly Earnings will probably garner more attention, offering an inflationary signal if it accelerates. This could perk up the US Dollar ahead of next month’s Fed meeting, with a knock-on for Commodities, GBP and UK Index .

As for jobs, consensus expects normalisation of Non-Farm Payroll additions to 180K after last month’s jump to 222K, leaving us around the 200K average. Watch out for whether Unemployment falls back to 4.3% (lowest since May 2001) after last month’s tick higher. Trump will love that!

After the European close, the Baker Hughes US Rig Count will update markets on US drilling activity, allowing crude oil traders to deduce whether shale/fracking is still on the rise stateside, eating into OPEC’s production-cut efforts and keeping crude oil prices within their $45-55 range.

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

• Royal Bank Of Scotland Swings To Profit Despite U.S. Fine
• RBS Posts First Half-Year Profit in Three Years
• Pearson to Cut 3,000 Jobs, 1H Pretax Loss Narrows
• Merlin Entertainments 1H Revenue Rises; Sees 2017 Profit in Line
• Hargreaves Lansdown Won't Pay Special Dividend for FY17
• Merlin Entertainments Sees Trading in Line With Views
• EasyJet July Load Factor 96.8% Vs 95.8%
• Millennium & Copthorne Hotels Profit Rises