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

UK 100 called to open -30pts at 6275 (-9.8pts ex-div), again weakening steadily overnight, but not so far as yesterday’s lows. Still holding above 6260 (intersecting support from 25 May) keeps us at the top end of the recent 2-week range which maintains potential for a bullish inverse head & shoulders reversal to 2016 highs. However, a decisive break above 6300 still eludes us and bears point to yesterday’s highs failing to challenge Tuesday's and thus potential for a bearish H&S top back to 6200 should we breach 6260. Watch levels: Bullish 6305, Bearish 6250.

Calls for a negative open derive from Asian bourses posting losses, failing to emulate the gains of stateside counterparts with Japan’s Nikkei struggling under the weight of a weak dollar and thus strong Yen as well as disappointing macro data. While Japanese Machine Orders can be volatile, being considered an investment proxy means the plunge in April (worst in 2yrs) offsets some of the buoyancy from upwardly revised Q1 GDP yesterday.

Note China and Hong Kong closed for holidays, but Australia’s ASX outperforming Japan after Chinese inflation data showed an unwelcome easing in Consumer Price inflation (stimulus positive?), but a welcome easing in Producer Price deflation which adds to the surprisingly resilient imports growth print (almost back to breakeven) that gives hope for economic transition and no hard landing. Other helpers include US Dollar weakness (delayed expectations for a US rate hike) supporting the key commodities space and oil above $50.

US bourses closed in the green yesterday with the Dow Jones finishing north of 18,000, making a 4-week high while the S&P500 hit its highest level in 10-months. Data-wise, note JOLTS Job Openings back to the July 2015 high of 5.788M. While that’s an indicator that businesses are confident and keen to hire, note also that actual hiring was down on last month.

Risk sentiment has been buoyed largely by crude oil prices making 11-month highs, with EIA US stockpile data this time confirming the two prior readings that indicated another drawdown. If oil manages to bed in above $50, that’s a potential indicator of even better things to come.  

Gold is tightly range bound this morning after rising to the $1266 level we pointed out yesterday. Support at $1260, though note a break below a 48-hour rising trendline. Brexit fear looks all but confirmed absent from the financial markets given yesterday’s positive UK NIESR GDP Estimate and the fact that Sterling has actually been strengthening YTD. Are markets happily pricing in a ‘stay’ vote then? In terms of what this means for safe havens, Gold should stay supported by the weaker USD but bulls should note that there are signs that equity markets are on the up again.

In focus today, as the Brexit debate hots up (first defection overnight) and following that surprisingly strong UK Industrial & Manufacturing Production print yesterday, April UK Trade data will be keenly watched, even if consensus is factoring in minimal change.

Stateside, the major data prints this afternoon include US Jobless Claims which will of course be of interest with that shocking May US Jobs report pushing back expectations for a US rate rise. The April reads for Wholesale Inventories is the sole release providing a window on US economic growth.

While Eurozone data is conspicuously absent from the line-up we are graced with a run of speakers kicking off (literally?) with ECB President Mario Draghi at the European open and closing with European commission President Juncker mid-afternoon (will he comment on Brexit referendum?).

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

• Home Retail's Argos has best quarter in two years
• HSBC says Brazil regulator approves sale of unit
• UK property developer Watkin Jones six – month oper profit rises
• Majestic Wine launches new share incentive plan
• Packaging maker RPC to buy British Polythene in $379 mln deal
• Wincanton reintroduces dividends; full – year revenue rises
• BHP sets sights on a new iron mine to replace ageing one
• Flybe FY pretax profit up 9 pct to 2.5 mln stg
• Essentra sees lower full – year adjusted operating profit
• RPC to raise 90 mln stg via placing
• Betting odds indicate 76 pct probability of UK voting to stay in EU – Betfair
• AstraZeneca sells rights to anaesthetics to South Africa's Aspen
• Bellway to build at least 10 pct more homes this fiscal year
• Glencore sells 9.99 pct stake in agri business to British Columbia fund