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

UK 100 Index called to open +25pts at 7320, holding around overnight fresh all-time highs which keeps the impressive rising channel of the last month alive. A breakout might allow the index complete the 9-month bullish inverse head and shoulders pattern highlighted since the beginning of the week, although remaining upside could be limited (20-30pts) and the daily RSI may have peaked at overbought. So long as 2017 rising support and 7300 holds, there is potential for further gains. If breached, however, retracement towards 7275 and then 7200 is possible. Bulls likely needs to see 7335 to believe in a breakout while Bears will want to see 7300 give way to put the 2017 uptrend is in jeopardy. Watch levels: Bullish 7330, Bearish 7300.

Calls for a positive open come in spite of Wall Street losses and a mixed session in Asia overnight. The latter is derived from mixed Chinese trade data which, in local currency terms show exports still growing and imports not slowing as much as expected, but exports in dollar terms falling sharply, delivering a negative knock on to Australian market sentiment. Decent imports growth can be taken as supportive of the nation’s transition to from maker/exporter to service/consumption.

Investors continue to digest Wednesday’s aggression from Trump towards the media, intelligence services and drugs companies, and the distinct lack of focus on the stimulus plans that have helped fuelled stock market gains thus far. Will the more statesmanlike figure seen on 9 Nov resurface on Jan 20, and importantly stick around thereafter? Market participants also await US banks results which kick off reporting season around midday.

Japan’s Nikkei is getting a leg up from exporters basking under a weak Yen, although the benefit has waned as the US Dollar pulls back from its overnight best, buoyancy in retail and a healthcare rebound. In stark contrast is Australia’s ASX, in the red (close to weakest since early Dec) as Banks and Miners weigh heavily with Oil and metals prices (base and precious) back from recent highs. Watch the UK dual-listed Miners this morning.

US equities yesterday once again pared early losses as a US Dollar rally helped avoid a much larger sell off. The Nasdaq snapped its streak of record closing highs, closing lower (-0.3%) for the first time in 2017 while the S&P 500 outperformed, albeit still 0.2% down on the day as financials weighed on the index. The Dow Jones also suffered from financial weakness, closing down 0.3% as Trump rally darling Goldman Sachs led losers.

Crude Oil prices continue to recover from the lows of Tuesday night as OPEC members line up to report cuts to production over and above the quotas set out at November’s Vienna meeting. A rise in Chinese imports reported overnight bodes well for crude demand to continues to rise in the world’s largest consumer of commodities, while tonight’s Baker Hughes Rig Count will be closely watched for any further signs of increased US production that could offset OPEC’s cuts.

Gold price has retreated from its highs above $1200 as the US Dollar rallies overnight, however remains in uptrend from its December $1120 lows. A lack of comment overnight from Fed Chair Janet Yellen on Fed rate hikes in 2017 helped the precious metal remain above $1190, although rising US PPI inflation data this afternoon may see a US Dollar rally negatively impact investor appetite.

In focus today will be a duo of US data, Producer Price Index and Retail Sales. The former is seen cooling off after last month’s two-year high reading, although markets will be watching for any surprise to the upside to confirm rising inflationary pressures in the US, much to the interest of the Fed. The range of data for the latter are broadly seen accelerating (excluding a marginal decrease for core figures), most notably with a sharp uptick in the headline MoM figure to 0.7% from 0.1% in November.

Other data of note includes the University of Michigan Sentiment, expected to fall slightly after December’s two-year high reading, although remains higher than the remaining 2016 figures, while Business Inventories are expected to swing positive in November. The Baker Hughes Rig Count will be closely scrutinised after last week’s data raised fears about increasing US crude oil production offsetting OPEC’s production cuts, prompting a sharp sell-off for both Brent and US crude.

A speech from the Fed’s Harker this afternoon headlines speakers today, with the Bank of England’s Saunders this morning the other pick of the bunch.

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

• SIG Records Marginal Rise in 2016 Like-for-like Sales; group sales +11.2%
• Grafton Group 2016 Revenue Rises 13.4%
• Mitchells & Butlers 1Q Comparable Sales Rise; Trading in Line
• Estate agent Countrywide says London slowdown hits volumes
• Secure Trust Bank sees FY results in line with market expectations
• Oil prices inch up on record China crude imports, Saudi output cut
• Gold down from 7 – wk high on dollar strength, technical swing
• UK car insurance prices rose 14 pct in 2016 – industry survey.