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

UK 100 Index called to open -30pts at 7405, back below last week’s 7440 breakout but, importantly, holding above 7400. Bulls need a break above 7430 overnight highs, if not 7440, to revive confidence. Bears would like to see another test of 7405 overnight lows. Watch levels: Bullish 7430, Bearish 7405

Calls for a negative start to the week come courtesy of Kim Jong-un ignoring the fact Sunday is a day of rest, going ahead with another nuclear weapons test to inspire a fresh move towards safe havens such as Gold, which has rallied back to late 2016 highs. This upsets the risk appetite that markets closed the week with on Friday despite a disappointing US jobs report that likely leaves the Fed in a quandary.

Major Asian bourses are understandably in the red, with Japan’s Nikkei underperforming due to safehaven inspired yen strength dragging industrials and IT names lower. Australia’s ASX  outperforms, with more muted declines, despite financial sector weakness, thanks to metals holding up (Copper, Nickel and Zinc still rallying) still benefiting from last week’s China data, helped further by a weaker USD and compounded by Gold’s flight-to-safety gains.

US equity markets finished stronger on Friday ahead of traders’ extended weekend for Labor Day, with the Nasdaq trading yet another all-time high following its best week of the year, while the Dow Jones closed above 22,000 for the first time since the middle of August thanks to gains for Goldman Sachs. The S&P 500 outperformed on Friday, as Financial and Energy names led the index higher.

Crude Oil prices have dipped overnight as US refineries in Texas restart operations following the devastating storm Harvey. Having traded a fresh 3-week high on Friday just shy of $53 per barrel, global benchmark Brent has fallen to trade around Friday’s lows of $52.2, while its US counterpart has fallen from an overnight 1-week high of $47.5 to trade around $47.2.

Gold is once again the major beneficiary as tensions in the Korean peninsula reach fever pitch once again, which has seen investors flock to safe haven assets. The precious metal is trading around $1337.5/troy oz., the high it touched on the night of the US election back in November, having completed a 2-day bullish flag pattern from $1300. Expect North Korean rhetoric to heavily influence the safe haven asset throughout the day as global leaders react to the latest provocations.

In focus today will be another unfortunate weekend foray with geopolitical and nuclear uncertainty after North Korea took its hostility and provocation to new heights with a nuclear weapons test that leaves markets guessing about the prospect of military intervention.

With US markets quietened by the US Labour day holiday major data points are limited to UK Construction PMI and Eurozone Sentix Investor Sentiment (both 9.30am), both forecast largely flat, the former holding around 2017 lows, the latter around this summer’s multi-year highs.

Shortly after (10am), the latest Eurozone PPI inflation figures will be the final macro prints of the day, important with Thursday’s ECB meeting and monetary policy update looming. Forecast to have slowed for a third straight month to 2017 lows (albeit above target), it will likely add to the ECB’s quandary of desiring to normalise policy (less QE) but the EUR still proving uncomfortably strong.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.

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

• Victrex Expects Lower Tax Rate From UK Patent Box Legislation
• Acacia Mining cuts gold production guidance 
• Premier African Minerals Limited Zulu Lithium Drilling Update
• Wizz Air passengers +24.4% YoY, load +2.4pts, Capacity +21.3%
• Dechra Pharmaceuticals says full – year revenue up at 359.3 mln stg
• GlaxoSmithKline sets up first team for acquisitions in India – Business Standard
• Vedanta eyeing stressed steel assets in India – Business Standard
• AstraZeneca to present biologics data at European Respiratory Society congress
• Gold miner Avocet to consider insolvency for Burkina Faso unit
• Brent crude oil falls after North Korea nuclear test