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

UK 100 Index called to open -55pts at 7275, unable to overcome 7350 yesterday, selling off sharply overnight to retest April lows and maintain the trend of falling highs since last month’s 7448 record. So long as 7255 support holds, there is potential for a rebound towards 7350, especially with the hourly RSI turning back from oversold. Bulls are on the lookout for a break above 7290; Bears want another test of 7260 support. Watch levels: Bullish 7295, Bearish 7255.

Calls for a negative open come after US markets didn’t take too kindly to what they considered overly hawkish Fed minutes suggesting most FOMC policymakers think the US central bank should, later this year, begin trimming the $4.5tn balance sheet it built up during its post-crisis years of QE bond-buying stimulus. While Bonds remained calm, equities reacted to come concerns about stocks pricing in too much optimism related to tax cuts and/or fiscal stimulus.

Markets had been embracing the prospect of further Fed rate hikes this year, assuming these would be accompanied - even driven - by Trump stimulus policy driving stateside economic growth. The idea of the Fed also beginning to cease re-investment of maturing paper, slowly shrinking its asset pile, at the same time as markets question the validity of the ‘Trump trade’ and deal with plentiful geopolitical risk, has served to spark risk aversion just hours before Trump’s his most crucial summit so far.

The upshot of a weaker US Dollar is currency hindrance for the UK UK Index and German DAX, in the form of unwelcome GBP and EUR strength. The same is true for the alternative safe haven Yen which is delivering push back for Japan’s Nikkei exporters along with oil’s pull back hurting Energy. Australia’s ASX is being weighed on by financials, following their US counterparts lower in the wake of the Fed minutes, while the oil price move isn’t helping.

US equity markets saw a significant reversal in fortunes over yesterday’s trading session, paring ADP employment data-inspired gains after the release of Fed minutes to eventually close lower. Comments from House Speaker Paul Ryan that tax reform may take longer than expected also contributed to the largest single session reversal for US indices since January 2016, which saw Financial names weigh on both the Dow Jones and the S&P500 while the Tech-focused Nasdaq underperformed.

Crude Oil prices have eased from 1-month highs after yesterday afternoon’s US government inventory data showed a surprise build, at odds with Tuesday’s API data release. As a result, global benchmarks have been unable to capitalise on the weaker US dollar, with US crude pulling back to trade at $50.80 rising lows support, while global benchmark Brent attempts to mount a recovery from $54 support to keep bullish flag patterns alive. As always, investors will have ears to the ground for any further OPEC production cut extension chatter.

Gold was a beneficiary of the Fed minutes-inspired weaker US dollar, paring losses incurred in the run up to the release, although the precious metal once again struggled to overcome resistance at $1260 and subsequently remains in its tight $1240-1260 sideways channel. The dollar will once again be in focus for traders of the yellow metal, with particular impetus put on today’s Sino-US summit while a raft of ECB speakers will likely provide further comment on the path of European monetary policy.

In focus today is the meeting of US and Chinese Presidents Trump and Xi. And with a distinct lack of top tier macro data to entertain us, we may have to make do with ECB Minutes around lunch time unless the raft of ECB speakers can spice things up. Will they continue to allay fears of removing accommodative policy before end-17?

Data is limited to Eurozone Retail PMI this morning and US Challenger Job Cuts this afternoon, although there are no consensus expectations for either.

On the speaker roster, the ‘ECB and its Watchers’ Conference in Frankfurt kicks off with ECB President Draghi (8am) and ECB Chief Economist Praet (8.30am). In the afternoon, at the same conference, the Fed’s Williams (2.30pm) joins a debate and Q&A entitled "Do monetary policy frameworks need to be adjusted in a world of (potentially) low natural real interest rates? If so, how?"

This afternoon, the ECB’s Constancio (12.45pm) delivers a keynote speech "Strengthening EU prospects in a period of major change" in Malta, where Draghi, Praet, Constancio and Cœuré will all also participate after the European close. Busy little ECBs, n’est-ce pas?

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

• Airbus says placed $750m in 30 – year bonds at fixed 3.95%
• Britain's HomeServe sees full – year profit in line with expectations
• BP to develop Indonesian retail fuel business with AKR Corporindo
• London copper maintains gains ahead of China – U.S. meet
• Easyjet says March passengers at 6,334,753, up 10.6%
• Daily Mail & General Trust appoints Tim Collier as group CFO
• Hikma enters into settlement agreement with Jazz
• Ferrexpo posts lower Q1 pellet production
• Unilever announces results of business review
• Unilever to sell spreads business, launch buy – back
• Gulf Keystone sets 2017 production guidance at 32,000 – 38,000 bopd
• Gulf Keystone trims annual loss after debt – for – equity deal
• Shell sells its 50% stake in New Zealand gas field to Todd Energy
• Victrex buys UK – based Zyex for £10m in cash
• Cobham said to overhaul contract bidding strategy after setbacks – Bloomberg
• Petra Diamonds announces pricing of $650m note issue
• BTG sees FY revenue at or above upper end of guidance range
• Oil prices fall on bloated U.S. market, but other regions tighten
• Shell switches New Zealand holdings ahead of possible divestment