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

UK 100 Index called to open -10pts at 7385, back from yesterday’s flirt with a 7400 breakout. This adds to a trend of falling highs since last Friday’s 7460 peak (also a tease after getting above 7440) and opens the door for a retreat towards recent lows of 7320, if not 7300. Bulls need a break above 7400; Bears need to see 7375 give way. Watch levels: Bullish 7400, Bearish 7375

Calls for a slightly negative start come after a mixed and choppy US session – financials suffering most – developed into losses for Asian stocks overnight. Sentiment remains perturbed after mixed China trade (exports slowed, imports accelerated) and yesterday’s EUR rally (Draghi says QE tapering decision soon) sending the USD to 32-month lows but not providing the usual boost to commodities (except Gold).

Japan’s Nikkei underperforms due to continued Yen strength after the dollar fell and in spite of a downward revision to GDP data amid weaker business investment. Australia’s ASX is offside due to the hindrance of a stronger AUD, led by banks, and despite positive data (especially imports) for biggest trading partner China.

UK Index corporate news this morning includes British Land issuing £300m 12 year bonds with a 2.375% coupon as part of its financing strategy. Greene King 18-weeks like-for-like sales growth drop 1.2% due to tough trading conditions, which means unseasonal weather. Trinity Mirror is in talks to acquire 100% assets of rival Express publisher Northern & Shell.

US equity markets closed around breakeven on Thursday as investors digested falling treasury yields, corporate guidance and analyst recommendations. The Nasdaq was the only major index to close higher, rallying thanks to positive sessions for Amazon, Facebook and Microsoft. The S&P 500 and the Dow Jones, however, closed lower as Financial names suffered from falling yields and Disney suffered on disappointing guidance from its CEO.

Crude Oil prices are diverging as Brent crude extends a breakout from 2017 falling highs resistance, while its US equivalent trades sideways below $49.50 horizontal resistance. The former benchmark continues to trade in a rising channel, although $55 May highs may provide a hurdle for further gains, whilst the latter remains supported by 1-week rising lows support at $49.

Gold has traded a fresh 13-month high overnight as the US dollar drops to fresh 32-month lows, reducing the relative price of the safe-haven asset. This has helped to further supported the rally after the ECB made no changes to its accommodative policy yesterday, culminating in an overnight high of $1357.5. The greenback will likely remain a key driver of sentiment today for the precious metal.

In focus today will be UK Industrial and Manufacturing Production (9.30am), especially after the British Chamber of Commerce’s (BCC) overnight warning that there was ‘No sign’ of return to healthier UK economic growth, a weak GBP not automatically translating to an export boom.

Consensus is for slower UK Industrial Production (and Construction Output) in July, but for a rebound in Manufacturing and a slightly narrower trade deficit that may help UK Sterling. There may not be consensus for UK BoE/TNS 12-month Inflation, however, should the print deviate much from the prior month’s already too high 2.8% this too could move GBP.

The afternoon includes UK NIESR quarterly GDP estimates (1pm) for the three months to Aug. Can it recover lost ground from July and get back to June’s best level (0.3%) since Q1? Thereafter US Wholesale Inventories growth (3pm) is seen confirmed slower in July before the Baker Hughes US Rig Count (6pm) updates us on drilling activity, potentially impacted by Hurricanes.

Central Bank speakers today include the ECB’s Liikanen, the RBA’s Lowe and the Fed’s Harker.

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

• Greene King’s Pub Company 18-weeks Like for like Sales Drop
• British Land Issues GBP300M in Unsecured Sterling Bonds
• Dairy Crest Pension Deficit Drops to £100M on New Valuation
• Trinity Mirror in Talks to Acquire 100% Assets of Northern & Shell
• Lucapa Diamond Company Lulo Diamonds Sell For $7.4m
• Horizon Discovery on track to meet FY17 revenue guidance with strong order book