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

UK 100 Index called to open flat at 7355, back from overnight highs of 7375, but equally holding above the lows of 7345. This maintains the 7320 bounce from yesterday lunchtime that gives us a semblance of an uptrend that could help us back towards 7400/7450. A break above 7375 is required to keep Bulls inspired, while a breach of 7340 would likely do the same for those of a bearish persuasion. Watch levels: Bullish 7370, Bearish 7345

Calls for a flat start follow a mixed Asian session at odds with a positive US close, and in spite of refreshing and reassuring Trump willingness to act decisively while Texas deals with and Florida faces extreme weather. Even if that means siding with Democrats. After recent faux pas, linking hurricane relief to a 3-month fiscal deadline extension likely buys him both some time and goodwill. With Dems at least. 

A short-term deal to raise the US debt ceiling and delay a tricky budget vote has been welcomed by those fearful of another government shutdown, even if it means kicking the proverbial financial can down the road. Again. A calculated move by Trump in the absence of any major legislative wins, as well as a message to stubborn Republicans that he can work with or without them.

In Asia, Japan’s Nikkei outperforms thanks to consumer discretionary, industrials and Energy, thanks to a higher oil price and weaker Yen after the USD rallied. Australia’s ASX flat despite gains for Energy and a stronger USD holding commodities back. China and Hong Kong down due to weakness among IT and financials.

UK Index corporate news this morning includes AstraZeneca's Duaklir improving lung function in COPD patients. Imperial Brands sells part of stake in Logista. Ashmore FY net profit rises as emerging markets perform well. Bovis Home says half year performance in line with expectations although profits impacted by legacy customer service costs. ZPG agrees to acquire money.co.uk. Genus FY pretax profit falls but it lifts its dividend.

US equity markets closed higher yesterday following the announcement of the debt ceiling extension, paring losses from earlier in the session. The S&P 500 outperformed, rallying 0.3% as Energy names led the index higher, while both the Dow Jones and the Nasdaq finished close behind, up 0.25% and 0.28% respectively.

Crude Oil prices have retreated from overnight highs as the US dollar rallies in reaction the US debt ceiling extension, however remain close to multi month highs. Brent Crude has fallen from 2017 falling highs resistance at $54.3 having traded a fresh 3-month high yesterday afternoon, while US crude is falling after encountering 3-month falling highs resistance and its 200-day moving average at $49.5.

Gold fell further from Tuesday’s 12-month highs following the announcement of the US debt ceiling extension as fears of a US government shutdown abated. However, the precious metal has maintained this week’s breakout from $1326 resistance as North Korea remains firmly at the forefront of investors’ minds. The ECB policy update this afternoon will likely drive sentiment today as markets looks for any update on its long awaited QE taper.

In focus today will be latest monetary policy update from the European Central Bank (12:45pm) and the subsequent press conference by President Mario Draghi (1:30pm). While many had been hoping that this meeting would provide more clarity on a firm date for the ECB to begin the long awaited tapering of its quantitative easing programme, the overwhelming strength of the Euro in recent months could now delay the decision.

Expect instead a press conference and Q&A laden with references to the strong euro and its impact on both inflation and Eurozone exporters, with any firm announcement on the start date and duration of tapering now expected in October.

This morning, UK Parliament will debate aspects of the (formerly known as ‘Great’) Repeal Bill before the eventual vote on the legislation on Monday. Labour has already made its opposition to the bill, which would allow sweeping powers to change vast swathes of EU law into UK law with little oversight, known, which could result in a testy affair in the House of Commons once proceedings get underway around 9:30am.

In terms of macro data, UK Halifax House Price growth (8:30am) is expected to have slowed in August, but holding steady on a 3-month rolling basis, before the final reading of Eurozone Q2 GDP (10am) is expected to confirm previous prints. This afternoon’s US data is comprised of Non-Farm Productivity and Unit Labour Cost (1:30pm), the former seen improving in Q2 while the latter retreats, before the Labor Day delayed EIA Oil Inventories (4pm) add the regular excitement to crude oil markets. Note API data last night showed US crude oil stocks +2.8m barrels, gasoline -2.5m and distillates -0.6m.

US central bank speakers today include Dallas Fed’s Kaplan (4:40pm) and Cleveland Fed’s Mester (5:15pm).

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

• Imperial Brands Sells 13.3M Shares in Logista for GBP230.8M
• AstraZeneca's Duaklir Improves Lung Function in COPD Patients
• AstraZeneca's Tezepelumab Cuts Exacerbations in Severe Asthma
• Bovis Home says half year performance in line with expectations
• Rio Tinto PLC Increase to Kestrel Ore Reserves
• ZPG to Buy Money.co.uk Website Owner for GBP140M
• Genus FY Pretax Profit Falls, Lifts Dividend
• Euromoney Mulls Sale of Hong Kong-Based Division
• Ashmore Full Year Net Profit Rises as Emerging Markets Perform Well
• Frontier IP Group plc CSI launches novel sensor system at IFA Berlin