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

UK 100 Index called to open flat at 7575, holding yesterday’s range  with rising support still valid at 7565. Bulls need a break above yesterday’s 7590 highs. Bears require a breach of yesterday’s 7565 lows. Watch levels: Bullish 7595, Bearish 7555

Calls for a flat open stem from the wait for a return to a full contingent of world markets after the US holiday. Concerns still abound about tariffs and trade, with the US and China set to introduce import duties tomorrow. Asian bourses mostly lower again, with Australia’s ASX the only bright spot, although UK Index dual-listed Miners were in the red. Oil prices bounced back after API drawdown, metals (Gold, Copper) still hindered by USD strength, but GBP also higher, hampering UK Index .

In corporate news this morning, AB Foods Q3 revenues +3%; reiterates full year guidance; reduced profits from sugar to be offset by grocery, agriculture and Primark. Glencore to start $1bn share buyback programme. Anglo American says Anglo American Platinum disposed of 33% stake in Bafokeng Rasimone Platinum Mine JV for US$ 135m.

Persimmon H1 revenues +5%, completions +3.6%, average prices +1.2%; forward sales +5%, enquiries +6%; expects continued improvement in underlying using margins, despite inflationary cost pressures. Bovis Homes expects to deliver a significant step up in H1 profitability; completions +4.5%, average private prices flat, total average prices -5.9%.

Electrocomponents made strong start to year. easyJet June passengers +2.3% YoY (12-month rolling +6.6%), load +0.6pts (+1.5pts). Assura confident in FY outlook. Sophos expects a return to mid-teens constant currency billings growth in the second half of the year. Superdry revenues +22% (wholesale +30%, Retail +9%), underlying profits +11.5%; guidance unchanged.

In focus today will be the build up to “T-day” tomorrow with the US and China set to impose import tariffs on each other. The big question for now is who will go first? The latest Fed FOMC Minutes (7pm) could also shift market expectations about the path of US rate rises, with an impact on the USD and a knock-on for most asset classes.

We also have much talk about what PM May will propose to her Cabinet this weekend in terms of post-Brexit EU trade setup. Palatable or not? Progress or not?

Major speakers include ECB Chief Economist Praet delivering a Keynote speech at an ECB/OeNB conference in Brussels, Bank of England Governor Carney (11am; visit to NE of England), the ECB’s Weidmann (12.15pm; “Towards a more stable monetary union – what is the right recipe?” ) and Mersch (1.15pm; "Deepening EMU - Political Integration and Economic Covergence").

Data-wise today, watch out for US ADP Employment (1.15pm). This is far from a perfect warm-up act for tomorrow’s US Non-Farm Payrolls, but has plenty of attention paid to it nonetheless for hints about the health of the US jobs market. Consensus is for another improvement towards the 200K average,

Thereafter, US PMI Services (2.45pm) are forecast to confirm a slight pullback from May’s near 3yr high. A small decline is expected for US ISM Non-Manufacturing (3pm) too, although May was below Jan’s multi-year peak.

This afternoon’s EIA Oil Inventories (4pm), delayed because of yesterday’s 4th July holiday, are of interest after bigger than expected drawdowns in API data last night, and with Trump tweeting about high oil prices again yesterday, suggesting US defense of OPEC members was not being repaid in kind with higher gas prices hurting consumers.

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