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

UK 100 Index called to open +5pts at 6725, increasingly looking like it is turning over after a marked slowing in its Brexit bounce. Of note are falling highs since Wednesday’s 12-month peak which, coupled with falling lows since mid-week, puts the index in a bearish 3-day falling channel. This adds to the negative divergence we have been highlighting (rising highs on index, falling highs on RSI indicator). Bulls want to get back above 6750 while Bears want to see 6700 to confirm a reversal. Updated watch levels: Bullish 6755, Bearish 6705.

A neutral open comes after a mixed Asian session with the Bank of Japan failing to deliver what greedy markets wanted – more stimulus. We did ask whether it would do little or even hold off until September, like the ECB, in order to see what the BoE does next week and allow the Japanese government to introduce the fiscal stimulus it has announced. Some say a limited offering suggests the BoJ has run out of options. But just because it didn’t move overnight, doesn’t mean it won’t move later. Patience please.

Japan’s Nikkei is now positive in spite of the Yen strengthening, the USD/JPY currency cross maintaining its 3-month falling channel. Australia’s ASX is also positive despite oil prices continuing to leak and a weaker USD Basket failing to help the key commodity space. Even Gold! ote Banks/Financials/Insurance helping both bourses after Japanese rates weren’t taken further negative.

US bourses closed mixed ahead of today’s GDP print with the Nasdaq the outperformer after Facebook and Apple gave positive earnings updates. Dow component Ford, meanwhile, warned it may not meet its FY guidance after Q2 profits fell short of forecasts. Post-close we had results from Amazon and Alphabet which continued the tech earnings bonanza and should help paint a positive picture for US equities into the weekend.

Gold has ended up lower following some overnight volatility, with a stronger Yen winning out against the US Dollar. In breaking news, the Bank of Japan has just said that ‘QQE and negative rates have not reached their limit’ which could help stem a sell-off in USD/JPY and spell a bit more downside for Gold.

Brent and WTI are still trending down as the US gasoline glut continues and concerns surface about slowing global growth hitting demand. Bears eyeing potential downside targets of $41.75 and $40.50 respectively.

In Focus today will be the fallout from the overnight BoJ policy update which delivered fall less than markets were expecting in terms of stimulus (greedy markets always wanting more!). We’ve also got Eurozone and US Advance GDP for Q2 today which could shift sentiment into the weekend, along with a slew of important inflation data.

French Consumer Price Inflation is seen falling in July – again, less buying pressure to push up prices. A similar story is expected in Spain and for Eurozone as a whole  with the key core reading edging back on an annual basis along. GDP likely did the same in Q2.

This afternoon, US GDP Annualised (QoQ) is seen on a roll with consensus of 2.6% against a reading of 1.1% in Q1. Personal consumption also seen up which is all good for the US economy and could well bring Fed hawks out of their nests (even though they won’t raise rates just like that, they might start preparing markets…) so watch US equity markets around that one. Any inkling of cheap money for not much longer  and all that…

Rounding off the afternoon we’ve got US Chicago PMI which looks to be pulling back yet comfortably above the 50 watershed that separates growth from contraction. With Uni of Michigan Sentiment looking for a break back above 90, it looks like it’s all go in the US! The Baker Hughes Rig Count is set to kick the oil price in whichever direction it sees fit with its counting game. Here endeth July.

EBA Banks stress tests results are released after the US close.

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

• UBM Half Year Profit Rises; 2016 Trading Outlook Unchanged
• Indivior 2Q Profit Drops by 10%, Ups FY Guidance
• IMI Sees 2016 Earnings Outlook in Line
• Laird Earnings Fall
• Barclays Profit Takes Hit From Asset Sales
• IAG CEO Sees Slight Pickup in U.S. Bookings
• IAG Profit Rises as Brexit Hurts Airlines
• Reckitt Benckiser Pretax Profit Down 19%
• Crude Slump Weighs On Oil Firms’ Earnings — WSJ
• Pearson Trades in Line; Books Earnings Loss
• UBS Gets Brexit Bump — Market Talk