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

UK 100 called to open -10pts at 6175, having moved sideways since yesterday following the breakdown below 6220. The break below intersecting support from Jan lows adds weight to Bearish arguments with many believing this to be merely a narrowing pattern pause before another leg down. Bulls happy to have stayed above the 200-day MA and hopeful of a bounce by the daily RSI to revive the Feb uptrend. Watch levels unchanged: Bullish 6205, Bearish 6170.

The negative opening call comes after a down day in the US and in Asia overnight as persistent volatility in the Greenback keeps risk appetite in check as a bounce from the 15-month lows plumbed yesterday takes the wind out of commodity market sails, notably oil and even safehaven gold. Corporate results from more majors this morning also suggests a mixed picture in terms of outlook.

In Japan’s absence for public holidays, Australia’s ASX underperforming on account of weakness in commodity stocks (BHP faces $44bn legal challenge from last year’s Brazil dam disaster) with the USD bounce hitting raw material prices and oil as well as reversing some of the beneficial AUD weakness that resulted from yesterday’s surprise RBA rate cut. As service sector survey remaining in contraction is not helping. Note Chinese bourses surprisingly flat.

US bourses closed in the red, led lower by energy and materials as Oil sold off from its highs and fresh jitters from Asia-Pacific crept westwards. A couple of Fed speakers graced the waves yesterday in typically vague fashion. Williams suggested that a June rate hike is on the cards, although it also might not be, while Lockhart agreed that June is a ‘live meeting’ and went on to say that two hikes this year are ’certainly possible.’

Corporate results from Shell (RDSB) showed earnings on a replacement cost basis of $0.8bn versus $4.8bn in Q1 2015 (Source: CNBC). A sharp fall, yet surely expected given the collapse in the oil price.

It’s been pointed out this morning that a meeting between OPEC governors failed to agree on any kind of strategy to deal with low crude prices because of disagreements between Saudi Arabia and Iran. While such acrimony hasn’t exactly halted oil’s advances of late, the more of it that’s reported, the greater the downward pressures will be. Today’s focus will be US inventory data with, as mentioned already, both crude markers well off their recent highs.

Gold is having a bit of trouble staying above $1300 which is an indication that the yellow metal’s rally is consolidating. This could lead to long positions being unwound (profit taking) upon which we could see a ‘dip’ where fresh buyers may come in. The wider metals picture has been tarnished by some disappointing Chinese macro data this week, even as the USD hits 15yr lows.

In focus today will be Eurozone PMI Services data which is seen confirming major regional members (and the UK) in growth territory for April. Eurozone Retail Sales expected weak in March before ECB member and Bundesbank head Jens Weidmann surely stands up for Germany in response to President Draghi’s recent dig.

In the afternoon, US ADP Employment change will of course be looked to as a suggestion for where US Non-Farm Payrolls will be on Friday. Watch also US PMI and ISM Services (solid) and US Factory orders (charmingly volatile) as well as US Crude Oil Inventories.

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

• Randgold says Q1 production down 11% on quarter on quarter basis
• Insurer Direct Line’s Q1 gross written premiums rise 4.2%
• Ryanair April traffic grows 10%
• Imperial Brands affirms guidance after sales miss expectations
• Intu Properties says UK development pipeline on track
• Virgin Money’s Q1 mortgage lending jumps to £2.1bn
• J D Wetherspoon quarterly like – for – like sales up 3.8%
• Gemfields says generates $116mn in revenue till date from auctions in 2016
• Ultra Electronics appoints new group finance director
• Shell makes further spending cuts after BG deal
• Glencore says Q1 copper output down 4%
• Wizz Air April load factor increases slightly
• Standard Life buys AXA’s Elevate advisory business
• Sainsbury’s reports second straight year of profit decline
• Shell says Q1 oil and gas production rises 16%. CEO says 2016 capital investment trending towards $30bn
• BAE Systems makes good start to year, outlook unchanged
• AB Inbev Q1 results below Reuters Poll estimates, suffers weak start to year in Brazil
• Deutsche Telekom Q1 core profit up 12.9% helped by U.S.
• Oil stable after two – day decline on stall in global growth