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

UK 100 Index called to open +5pts at 7555, having rallied from shallow rising lows support and overnight lows of 7545 but remaining hindered by falling highs resistance from Friday at 7560. This primes the index for noticeable movement at the open, as its 3-day narrowing pattern reaches a climax. Bulls will be eyeing a sharp break above 7560 to keep 2-week rising low support alive, and a potential return to last week’s all-time highs. Bears, on the other hand, will be looking for 7550 support to give way for a return to 7500.  Watch levels: Bullish 7565, Bearish 7545.

A marginally positive opening call comes as the UK reacts to Saturday’s London Bridge terror attack, prompting safe-haven asset gold to trade a fresh 6-week high. Sterling has recovered from an early 3-month low against the Euro, although the US dollar remains weak following Friday’s disappointing US Non-Farm Payrolls print, to the detriment of the UK’s blue-chip index.

Helping sentiment, however, is a rally for Crude Oil, coming as four Gulf States, including de facto OPEC leader Saudi Arabia, cut diplomatic ties with OPEC member Qatar over concerns about the country’s terrorist links. This is helping to offset a mixed lead overnight from Asian markets.

With the corporate calendar once again providing very few highlights, investor focus this week will likely remain on macroeconomic and, in particular, political events. Thursday provides multiple key events, including the UK General Election, the latest ECB policy meeting and a testimony from ex-FBI Director James Comey on Capitol Hill.

Asian equity markets are mostly lower overnight as Financial names underperform across the region, however rallying Crude Oil prices have helped Energy names to come off their lows. This has helped Japan’s Nikkei recover to flat, while Australia’s ASX remains in the red under the weight of its heavy Banking Sector.

US equity markets on Friday one again closed at record highs, shrugging off a weaker than expected Non-Farm Payrolls release as markets continue to price in a Fed rate hike at next week’s policy meeting. Despite this, Financial and Energy names underperformed the wider market on both the Dow Jones and S&P500, however this was not enough to offset gains for Tech stocks, which continued recent strength to help the Tech-focused Nasdaq outperform.

Crude Oil prices have continued to recover from Friday’s lows, accelerated in the early hours of this morning as it emerged that four gulf states, including Saudi Arabia, have cut ties with Qatar. This has pushed Brent Crude back above $50 and challenge 1-week falling highs resistance, while the US benchmark has rallied above $48. US dollar weakness following Friday’s NFP miss has aided the commodities space.

Gold has continued to build on Friday’s NFP-inspired rally as safe-haven demand and US dollar weakness sees the precious metal trade a fresh 6-week high of $1282 overnight. However, it has since edged lower as the safe-haven asset fails to overcome 11-month falling highs resistance. A US dollar recover could add further bearish sentiment to the mix, while political uncertainty could aid a breakout.

In focus today will be a vast array of Services PMI readings from across the world. Starting with mainland Europe, both Spanish and Italian readings are seen falling, while the French print is seen confirmed at its highest level since 2011. Germany is expected to be confirmed falling marginally in May before the headline Eurozone figure is seen continuing its pull back from March’s 6-year highs, while the UK reading is expected to retreat from April’s 2017 high reading.

This afternoon, the corresponding US Services PMI growth is expected to be confirmed at 54, continuing to accelerate from March lows, while the ISM Non-Manufacturing print retreats after a strong April recovery.

With no speakers scheduled today, event-driven focus will instead be on the latest opinion polls for the UK general election on Thursday. Over the weekend, polls continued to give Theresa May’s Conservative party the edge over Labour, although still widely expect the Tories to win the election.

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

• WH Ireland exchanges contracts at One New Bailey
• BBA Aviation CEO Pryce to retire early
• London copper steady, underpinned by weaker dollar
• Ocado announces first international customer for Ocado Smart Platform
• DX, John Menzies boards announce agreed revised terms of transaction
• Telford Homes signs pre – construction development deal with Greystar
• Oil jumps as Qatar ditched, London attacks hurt sterling
• Time Out Group announce acquisition of group's Australian licensing partner
• Vodafone, LG UPlus announce strategic partnership agreement for S. Korea
• Domino's Pizza Turkey, Russia franchisee plans London IPO
• Wizz Air Holdings says May load factor at 91.1%
• Royal Mail exchange of contract for sale of 2 plots
• Highland Gold cleared to proceed with Kekura development
• Gold hits highest in over 6 weeks as US jobs data disappoints