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

UK 100 Index called to open +5pts at 7490, holding close to the key 7500 mark, well off their overnight lows of 7480, and thus still offering potential for completion of a 2-week bullish inverse Head & Shoulders to 7570. Bulls still need a break above 7510; Bears are eyeing a breach of 7490. Watch levels: Bullish 7510, Bearish 7480.

A mildly positive opening call comes as investors weigh up Moody’s credit downgrade for China on debt sustainability concerns, a lukewarm reception for Trump’s first budget (does it all add up?) as well as rising optimism ahead of tomorrow’s OPEC meeting (especially after more favourable US inventory data) and news of potential M&A in the soft commodity sector.

In corporate results: Marks & Spencer (net profits slump on weak clothing and non-food), Kingfisher (Q1 sales weak but on track for 2yr strategic milestones), MediClinic (keeps div, expect gradual Middle East improvement), Babcock (profits up, raises div, £19bn order book, £10.5bn pipeline) and Vedanta (Looks to FY18 with more confidence than ever) and Pennon (well positioned, raises div).

In M&A: Glencore has made an informal offer for grain player Bunge. Berendsen reconfirms its 2017 profit forecast, offers a 2018 forecast and continues to believe Elis’ proposal very significantly undervalues it. Vodafone plans €500m merge of Malta unit with Melita.

Japan’s Nikkei outperforms on a weaker Yen as safehaven seeking abates, the USD bounces from recent lows and oil rallies on US inventory data ahead of OPEC. Australia’s ASX posts only small gains with the oil price and Energy rally offset by Moody’s China downgrade (biggest trading partner) hurting metals and Miners. Watch dual-listed UK Index miners on lower metals prices.

US equity markets finished Tuesday in positive territory, marking a 4-day win streak, with the S&P 500 closing only a handful of points from a fresh record closing high. Financials led both the S&P and the Dow Jones as Goldman Sachs outperformed, while the Nasdaq gained despite Apple falling. Note, hawkish talk from Philly Fed President Harker after market close, stating ‘a June rate hike is definitely on the cards’.

Crude Oil prices have continued to edge higher overnight after API inventory data noted drawdowns across all categories, helping both Brent and US benchmarks to overcome yesterday’s resistance at $54 and $51 respectively. Today, investors will remain on the lookout for further OPEC commitments to extending production cuts ahead of tomorrow’s OPEC meeting, while official US government inventory data (3:30pm) looks to confirmation drawdowns, as 18-month intersecting resistance at $54.50 (Brent) and $51.80 (US) is eyed.

Gold has fallen back from resistance at $1262 as the US dollar recovers from Tuesday’s fresh 6-month lows. With safe haven demand retreating after Monday’s UK terror attack, markets will anticipate Fed minutes this evening (7pm) and multiple Fed speakers today for any indication that a June rate hike is on the cards, with rising interest rates hampering demand for the non-yielding asset.

In focus today we have Fed Minutes this evening (7pm) which could offer more clarity on June’s widely anticipated second US rate hike of 2017, third in six months and fourth in 18. Note, FOMC members Kaplan (cautious hawk) and Kashkari (dove) speak after the US close, the former urging cautious and and gradual and the latter looking set to dissent next month.

Spanish PPI may provide read cross for Eurozone pricing pressures and the ECB’s next move in terms of policy normalisation. ECB Chief Economist Praet (9.30am) gives a keynote speech on banks in Sofia while ECB President Mario Draghi (1.45pm) does so on “Financial stability” in Madrid.

This afternoon, US House Price Inflation is expected to fall back from February’s 11-month high reading, while Existing Home Sales will look to avoid the disappointment that were provided by yesterday’s New Home Sales Figure. US Crude Oil Inventories will be watched for whether official government data can replicate another bullish report from API overnight to keep oil prices buoyed into tomorrow’s OPEC meeting.

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

• Babcock profit climbs, says long-term contracts underpin revenues
• Britvic H1 adjusted eps 18.9p
• Retailer Kingfisher’s Q1 same – store sales down 0.6%
• M&S sales, profit falls -10% after short – lived improvement
• Dixons Carphone reports strong Q4, narrows profit guidance
• HSS Hire Group says Q1 in line with management expectations
• Britvic announces appointment of chairman and board changes
• Mediclinic reports drop in full – year earnings
• Revenues rise at Zoopla as traffic hits record high
• Vedanta Resources FY profit surges on strong commodity prices
• RBS struggles to seal deal over 2008 cash call dispute – sources
• BHP applies to dig new nickel mines in Western Australia
• Gold firm as market awaits Fed policy cues
• Oil prices rise as market expects extended production cut