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

UK 100 Index called to open flat at 7367 (ex-divs -1.3pts), back from another test of 7380 resistance overnight but still holding July uptrend of rising lows. A meaningful break above 7385 still eludes the Bulls who hope the index is in the midst of a bullish rising wedge back to 7450. Bears need a breach of rising lows at 7360 to open the door for a retrace to 7300. Watch levels: Bullish 7390, Bearish 7360.

Calls for a flat open follow a mixed return for US bourses and a flat-to-negative session in Asian overnight as yesterday’s oil price slide weighs on Energy and markets digest Fed minutes suggesting it readying for the great unwind of its financial crisis, QE-stimulus-bloated balance sheet, despite continued disappointing inflation data.

While the USD gave a very mild welcome to ‘hawkish’ Fed minutes, GBP has strengthened overnight but the EUR has pulled back, which may give for a mixed start for Europe. Geopolitics remain prevalent with Gulf states criticising Qatar’s negative response to diplomatic demands, Trump seemingly goading North Korea and Lagarde warning the G20 about growing risks to global growth.

Equity market weakness has been more pronounced on Japan’s Nikkei than Australia’s ASX, with a stronger USD and thus weaker Yen offering little benefit. Down under may have derived a little benefit from metals prices like copper and iron ore getting off their recent lows in spite of the stronger USD.

US equity markets closed mostly higher on Wednesday as the Tech sector ended its recent spate of weakness, offsetting weakness in Energy names as Crude Oil suffered a sharp sell-off. The Nasdaq outperformed peers as the ‘FAANG’ large-cap growth stocks all closed higher, while the comparative sector on the S&P500 led the index higher. The Dow Jones closed just shy of breakeven as gains for Boeing offset weakness in Energy names.

Crude Oil prices have recovered from last night’s late technical sell-off, helped off its lows by API inventory data showing a 5.8m barrel drawdown. However, both Brent and US benchmarks remain a way off Tuesday’s highs as resistance at $48.40/45.70 comes back into play. A breakout from these levels could see both measures mount an extended recovery back to yesterday morning’s highs of $49.50/$47, while a failure could see benchmarks trade in tight ranges around yesterday’s lows.

Gold has fallen back from $1230 overnight, its highest level since Monday’s sell-off despite having not initially reacted to the hawkish Fed minutes. Safe-haven seeking remains rife with escalating tensions in the Korean peninsula, while the US dollar is having a minimal reaction to the aforementioned Fed Minutes. The precious metal has found weak support around the $1224 mark, although a breakdown from which could see a retracement to weekly lows of $1218.

In focus today will be the latest US ADP Employment Change (1:15pm), widely viewed as a warm up for tomorrow’s US Non-Farm Payrolls report. The print may be even more pertinent after Fed minutes suggested allowing unemployment to fall too low could result in the economy overheating and produce financial excesses.

After largely solid PMI Services from Europe, US PMI Services (2:45pm) is expected to be confirmed having edged back from April’s highs but around the average of the last 5-months.  After yesterday’s oil price slump, and in light of the US API drawdown last night, delayed US EIA Crude Oil inventories data (4pm) will be closely watched this afternoon.

Following yesterday’s Federal Reserve minutes release revealing policymakers are looking to remove quantitive easing measures as soon as September, the ECB minutes from its 8 June policy meeting (12:30pm) will be scrutinised for any sign of similar hawkish concessions being made.

Speakers scheduled today include the Fed’s Williams (centrist non-voter; 8:45am) discussing the global growth slump at the Economic Society of Australia, ECB Chief Economist Praet (11am) at the International Conference of Commercial Bank Economists (ICCBE) in Paris, and Williams’ colleague Powell (centrist voter; 3pm) on housing finance reform in Washington DC.

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

• Ferrexpo posts H1 2017 total pellet production 5.1m tonnes
• 3I Infrastructure portfolio overall continues to perform in line with expectations
• Barclays says European banks remain biggest overweight
• Gem Diamonds says recovery of high quality 126 carat diamond from Leteng mine
• GVC Holdings says H1 2017 group daily NGR up 10%
• John Laing Infrastructure Fund says chairman Paul Lester to step down
• Dechra says trading in line with management expectations
• Ireland exercises over – alotment option in AIB IPO
• Easyjet June passenger numbers rise 11.3%
• Great Portland says working up plans to commence redevelopment in Q1 2018
• Just Eat names Moneysupermarket.com's Peter Plumb as CEO
• Primark owner AB Foods' outlook has “marginally improved”
• Reckitt Benckiser downgrades growth forecast after cyber attack
• UK builder Bovis spends extra £3.5m to tackle home problems
• C&C Group reports Sterling devaluation will negatively impact earnings
• London copper steadies near one – week low as strike concerns underpin
• Gold steady as US policymakers split on rate hike outlook
• Oil rises on US crude stock draw, but prices remain weak