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

UK 100 Index called to open flat at 7340, holding an overnight breakout to 3-day highs of 7350. This extended the rebound from 7300 and adds to support following Tuesday’s sell-off. Bears continue to point to the limited 0.5% rebound and potential for a bearish flag back to 7200. Bulls highlight growing support at 7300; higher lows maintaining the longer-term uptrend. Bulls require a break above 7350. Bears desire a breach of 7340. Watch levels: Bullish 7355, Bearish 7335

Calls for another flat European open come after last night’s US congressional vote on repeal of Obama’s Affordable Care Act (ACA) was delayed by 24hrs and US markets closed flat. This adds to concerns that Trump lacks enough house support (even among Republicans) and that he may struggle to get approval for all the stimulus policies that he pledged.

However markets aren’t panicking. This is thanks to suggestions that a favourable vote isn’t a prerequisite for work to begin on other measures like tax cuts and infrastructure spending. However, it would mean Republicans, who have hated ACA since its 2010 birth, have to accept it will stay. An ultimatum, if you like, setting markets up for a dollop weekend risk.

This would appear either fortunate timing for a successful vote tomorrow, restoring confidence in the Trump reflation trade, to revive risk appetite come Monday. Either that or an unfortunate result that leads to more questioning about how much Trump will actually be able to deliver on, keeping markets under pressure.

Japan’s Nikkei is outperforming thanks to an easing in Yen strength and gains for Banks on hopes that US bank deregulation will proceed despite any trouble in repealing ACA. The sector is also helping Australia’s ASX for the same reason coupled with higher residential lending rates seen boosting net profitability.

A last minute postponement of the key congressional Healthcare vote saw US equity markets pare early gains to eventually close a touch lower. As a result of the mixed messages from House Republicans, the Healthcare sector led declining sectors on the S&P500 as the index underperformed its peers, while UnitedHealth led losses on the Dow Jones while Nike mounted a recovery from Wednesday’s 7% fall to help the index close just shy of breakeven.

Crude Oil continues to trade in a tight range after Tuesday’s sell-off, as both Brent and US benchmarks look to avoid falling back below key support levels of $50 and $47.50 respectively for the second time this week. Sentiment today will likely be provided by the Baker Hughes Rig Count, as the key US production metric is on course for its 10th consecutive weekly increase.

Gold, after trading at a fresh 3-week high yesterday, was unable to maintain its position above its 200-day moving average and has since fallen back towards $1241 intersecting support. This retreat comes in reaction to a strengthening US dollar as Donald Trump provides an ultimatum to Republicans, stating he will continue his legislative push next week regardless of its outcome. This could leave the door open for further greenback strength today and consequently a bearish impact on commodities.

In focus this morning will be a raft of Manufacturing and Services PMI prints from Europe, with France (Manuf. accelerating, Services falling back), Germany (Manuf. slowing, Services improving) and the Eurozone (both Manuf. and Services slowing marginally) although crucially, all of these readings remain above the expansionary 50 level.

This afternoon, US Durable Goods Orders growth is expected to slow in February, although note the ex-Transport figure is expected move back into growth following a flat figure in January. Manufacturing and Services PMI readings from the States are both seen accelerating in March before, as always, the Baker Hughes Rig Count will provide an insight into US Crude Oil production heading into the weekend.

Speaker-wise, we have a quartet of Fed speakers scheduled, as voting members Evans (Chicago) and Dudley (New York) join non-voters Bullard (St. Louis) and Williams (San Francisco), the latter having been busy overnight delivering hawkish rhetoric about 3 or 4 hikes this year.

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

• Acacia says Tanzania ore export ban costing over $1m in daily revenue
• Fastjet names Rashid Wally as non – executive chairman
• UK’s Lamprell cuts 20% staff; sees 2017 as toughest year yet
• British engineer Smiths posts higher H1 profit, reaffirms FY outlook
• easyHotel says trading for five months ended Feb 28 slightly above board’s expectations
• London copper faces weekly drop as supply concerns ease
• Gold slips as markets await U.S. healthcare vote
• Oil edges up as Saudis cut supplies to U.S., but global glut remains
• Vodafone India – Idea Cellular merger may be worth 23% more than the agreed price – Economic Times