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

UK 100 Index called to open +30pts at 7500, after a breakout above 7485 late Friday triggered the last leg of a bullish inverse Head & Shoulders pattern. This has potential to send the index 95pts north to 7570, well beyond recent record highs. Bulls want a meaningful break above 7500; Bears would welcome a breach of 3-day rising support at 7490. Watch levels: Bullish 7505, Bearish 7480.

A positive opening call comes after a Wall St relief rally on Friday suggested investors putting last week’s political chaos behind them. Asian counterparts made a solid start to the week, buoyed by continued optimism towards Oil and Thursday’s OPEC meeting delivering a production cut extension and a hitherto un-eventful Trump visit to the Middle East.

On the FX front, note the UK Index benefiting from GBP weakness after Brexit Secretary David Davis warned that Britain will walk out of talks if the EU demands €100bn. Meanwhile the German DAX gets a boost from the EUR edging back to its Friday afternoon lows versus USD after the Greenback came off its lows amid the late relief rally by US equities on Wall St.

Japan’s Nikkei is higher thanks to a flat Yen, troubled airbag manufacturer Takata reaching a settlement with carmakers and Softbank closing its mammoth $93bn Tech fund. Australia’s ASX outperforms thanks to gains for Oil, helping Energy, and while Iron ore futures extend their bounce from 18-month rising support, we note Copper prices struggling under 2-month falling highs.

US indices continued to recover on Friday from the politically motivated mid-week sell-off, with all three major bourses closing higher. The Dow Jones finished over 100 points higher, as Caterpillar and Boeing provided the greatest positive impact ahead of the confirmation of the US-Saudi trade deal, while the S&P 500 also saw Industrial names outperforming as all 11 sectors on the index closed positive. The Tech-focused Nasdaq underperformed peers having closed 0.5% higher.

Crude Oil prices have extended their rally from 5-months lows earlier this month, with Brent Crude briefly rising above $54 and US crude regaining a $51 handle for the first time in May. This latest leg up comes as the Saudi Arabian oil minister is due to arrive in Iraq to discuss stretching OPEC’s production cuts, with markets expecting a minimum 6-month extension to be agreed. However, is there still time for the group to disappoint before Thursday’s meeting in Vienna?

Gold has softened overnight, falling from resistance at $1257 as the US dollar recovers from fresh 6-month lows. However, rising lows support at $1253 remains in play, helping the precious metal to rally from overnight lows of $1252. Investors will continue to eye the US dollar for any potential commodity read across, while the political state of affairs may also provide some direction given heightened tensions.

In focus today, will be Oil’s continued ascent and the build-up to Thursday’s OPEC meeting form which expectations are high of a production cut extension and maybe even an increase. Following an uneventful weekend for President Trump in the Middle East, markets continue to eye his behaviour (more presidential) as well as developments back home related to last week’s explosive allegations.

Data-wise, look out for the forecast April rebound for the Chicago Fed Nat. Activity Index, seen getting back to levels last seen in February. Thereafter, the China Conference Board Leading Economic Index will be of interest given fresh China jitters about an overleveraged economy.

Speakers today, ahead of Wednesday’s Fed Minutes and US GDP 2nd estimate on Friday, include the Fed’s Harker (2pm; “Link Between Physical and Economic Well-being). Kashkari delivers welcome remarks at the Opportunity & Inclusive Growth Institute Conference at 2pm, followed by a Q&A at 10pm, before colleague Brainard speaks twice, making a dinner keynote speech (11pm) and another about “The Roles of Opportunity and Inclusion in Strengthening the U.S. Economy” (11.30pm).

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

• Highland Gold receives new exploration licenses adjacent to MNV
• Airbus appoints independent compliance review panel amid probes
• AstraZeneca sells rights for beat – blocker Seloken to Recordati
• Premier Oil says Zama – 1 well offshore Mexico was spudded
• Nanoco signs deal with Japan’s Kyulux to develop next generation displays
• Gold prices dip as Asian stocks gain, but Trump worries support
• Sharp announces joint management commercialization of LED display
• Australian iron ore miners climb; Rio hits near 3-month high
• Barclays tightens email security after Jes Staley hoax – FT
• Oil rises on expectation of extended, possibly deepened output cut