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

UK 100 Index called to open -5pts at 7690, hugging the floor of December’s rising channel. Bulls hope recent rising lows and horizontal resistance will produce a 7700 breakout from a bullish ascending triangle that helps the index towards 7750. Bears are eager for a test of the rising floor to trigger declines towards recent lows of 7610. Watch levels: Bullish 7705, Bearish 7670

Calls for a slightly negative open are derived from further GBP gains overnight to hinder its international earnings generating constituents, although Sterling is off its overnight highs. An element of wait-and-see may also be in play in the run-up to this afternoon's US jobs report (wages key for inflationary read across), especially after US indices made fresh record highs (Dow 25K).

UK Retails may find themselves under renewed pressure this morning after the BRC reported big discounts pushing December UK shop price growth data into negative (deflationary) territory. Oil has plateaued, which along with the stronger GBP may hamper Energy, although Miners may benefit from Aussie dual-listed counterparts hit fresh multi year highs, echoing recent commodity strength.

In UK corporate news this morning: easyJet: Dec traffic +5.5% YoY, load +1.5pts to 91.4%. Cairn Homes says market conditions remain positive, continued strong demand for new starter homes, starts 2018 with strong forward sales pipeline. Keller expects US tax reform to benefit future after-tax earnings; expects small credit to FY17 results. Johnson Service sees 2017 results ahead of expectations. Clarkson confirms FY 2017 results expected line with expectations.

US equity markets notched further record highs overnight, with the Dow Jones closing above 25,000 for the first time after ADP Employment, a widely regarded Non-Farms precursor, came in significantly above estimates, with Goldman Sachs and 3M leading the index higher. The S&P 500 closed at a record high too thanks to Financials strength, while the Tech-focused Nasdaq also climbed, albeit be a lesser amount than peers.

Crude Oil prices continue to trade around their best levels since 2015, although trade just shy of yesterday morning’s highs. Despite a bullish drawdown in US crude oil inventories yesterday afternoon, larger than expected builds in Gasoline and Distillates stocks offset some positivity. As a result, a US dollar bounce this morning sees Brent crude head back towards the $68 mark from highs of $68.5, while its US equivalent has turned back towards $61.5 from $62 overnight highs.

Gold has also come off its highs as the US dollar rallies from its lows, however intersecting support at $1318 has helped the precious metal avoid further losses. The reaction of the US dollar to this afternoon’s all-important Jobs report will be key to the buck-denominated security, with a weaker greenback likely to take Gold back to almost 4-month highs, while dollar strength could see further losses for the yellow metal.

In focus today will be the US Jobs Report (1:30pm) and all-important Non-Farm Payrolls. Following yesterday’s impressive ADP Employment (250K vs 190K est), considered a precursor to the big one this afternoon, there is room for an upside surprise for the headline 188K number. Unemployment is seen changed at 4.1%. As always, the Federal Reserve may pay more attention to the Average Hourly Earnings growth of 2.5% for its inflationary read-across.

Elsewhere, Eurozone CPI (10am) may have cooled a touch (1.4% vs 1.5%), but the core version may have ticked up (1.0% vs 0.9%). This afternoon may also see US ISM Non-Manufacturing (3pm) edging marginally higher from a 3-month low in November, while Factory Orders return to growth.

Today also sees the gradual re-emergence of central bank speakers after the Winter break, with both the Philly Fed’s Harker (3:15pm) and 2018 FOMC voter, the Cleveland Fed’s Mester (5:30pm) taking part in panels this afternoon at a social sciences event in Philadelphia, while the BoE’s Chief Economist Haldane (7:30pm) chairs a panel at the same event this evening.

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.