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

UK 100 Index called to open -15pts at 7290, under fresh pressure overnight that adds to the trend of falling highs resistance since Wednesday’s rebound highs. This keeps the index sideways since late March, with a base at 7255, still hanging on to November’s uptrend. Bulls need a break above 7295 highs of the last few hours (bullish ascending triangle reversal?); Bears are looking for a breach of overnight rising lows support at 7285. Watch levels: Bullish 7295, Bearish 7285.

Calls for a negative open come as geopolitical risk cranks up a notch following overnight US air-strikes on a Syrian airbase in response to this week’s shocking chemical attacks. This adds to yesterday’s jitters about hawkish Fed minutes, concerns about overstretched equities and Trump trade validity light of limited policy progress, however, the equity market response is relatively calm thus far.

Demand for safe-havens has nonetheless pushed bonds, precious metals (Gold and Silver breakouts?) and both the Yen higher. Middle Eastern instability fears has also sent both Oil benchmarks (US and Brent Crude) to one-month highs, well on the way to completing the 2-week bullish flags we have been highlighting since earlier in the week.

Japan’s Nikkei is higher in spite of overnight events, Energy being buoyed by the higher oil price, although Australia’s ASX  underperforms on account of a sell-off in metals prices (Copper, Iron ore) offsetting the oil rally. Watch the dual-listed Miners in London this morning, as well as the OIl majors.

US equity markets finished mostly higher, although ended the session a distance from highs (however note markets closed before US airstrikes). The Dow Jones closed less than 0.1% higher as gains for Caterpillar offset Procter & Gamble losses, while the S&P500 was led higher by the Energy sector, although note Tech-focused Nasdaq once again outperformed its counterparts.

Crude Oil prices rallied sharply overnight on the news of the US airstrikes on Syria, as investors saw chances of supply disruption skyrocket due to the country’s proximity to major OPEC nations. Brent Crude traded above $56 per barrel for the first time level since 7 March, while US crude completed a secondary bullish flag pattern to just shy of $53. Having cooled somewhat from 3am highs, watch this evening’s Baker Hughes Rig Count for added spice in the marketplace as investors assess US production against OPEC-led production cuts.

Gold has traded at its highest level since the US election overnight as Syrian geopolitical concerns see investors flocking towards traditional safe-haven assets. Alongside the Japanese Yen and US Treasuries, the yellow metal rallied to a fresh 5-month high of $1269 on account of the airstrikes. Although price has cooled somewhat from its 3am highs, note the possible emergence of a bullish flag pattern to $1280.

In focus will be fallout from US air strikes on Syria in response to this week’s horrific chemical attacks. This is the first major event of a Trump presidency that is still very much in its infancy. The timing may also prove pivotal as he spends a second day with Chinese President Xi. So far so cordial, but markets are eager for something tangible. Trump already joked he has got nothing so far but friendship; Syrian intervention may make relationships even more strained than they already were. And not just with China; Russia and Iran too.

Data-wise, it’s all about this afternoon’s monthly US Jobs report, and the widely watched Non-Farm Payrolls print, which gives us the latest lay of the land in terms of stateside employment and whether that half of the Fed’s dual mandate continues to improve at a pace that justifies further rate rises.

The UK’s own data dump at 9:30am sees February Industrial, Manufacturing and Construction Production figures released. All three monthly readings are expected to have returned to growth after a negative January, while annual readings for both Manufacturing and Industrial accelerate again after a January dip while Construction continues to cool, albeit marginally, from November’s highs.

BoE Governor Carney (10am) gives a speech at Thomson Reuters which may have a bearing on GBP while the Fed’s Dudley (5.15pm) could move the USD with his talk about the “State of Financial Regulation and the Potential for Reform” at Princeton University’s followed by a moderated Q&A.

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