UK 100 Index called to open +10pts at 6910, having eased back from 6940 overnight highs after yesterday’s bullish break beyond 6890 was built upon to complete yet another bullish flag pattern. Extension of December’s bounce to 4.4% and the clearing of 2-month falling highs resistance bodes well for continuation of this Santa Rally towards October’s 7130 all-time highs. Bulls likely need to see overnight highs of 6940 overcome before jumping in. Bears are watchful of any signs that 6900 and yesterday’s 6890 break-out are being troubled. Watch levels: Bullish 6845, Bearish 6895.

Calls for another positive European open come after Wall St extended its Trump-inspired rally to make fresh all-time highs. This was helped by a strong Buy signal for followers of Dow Theory and confidence that the ECB will extend its QE programme this afternoon to keep the accommodative policy gravy train rolling and help offset a likely Fed rate hike next week.

Bullishness has been built on overnight via upbeat China trade data demonstrating a reassuring rebound in both Imports and Exports growth, suggesting both domestic and foreign demand that supports the current positive global outlook within the investment community.

Japan’s Nikkei has seen its overnight rally take it ever closer to fresh 2016 highs despite a downward revision to 2016 GDP growth forecasts, helped by persistent JPY weakness versus major currency peers. Note Samsung shares hitting fresh all-time highs in South Korea. Australia’s ASX is rallying towards August’s highs of the year as Miners are driven north by a rally in iron ore prices that has been vindicated by overnight China Trade data. China equities surprisingly flat.

Both the Dow Jones Industrial and the S&P 500 closed at record highs (+1.5% and +1.3% respectively) as a significant milestone was reached in the Trump rally. The Dow Jones Transport average reached all time highs (for the first time since 2014) simultaneously to the Industrial average, suggesting that increased goods production is being sufficiently transported, a generally accepted bullish signal. This resulted in yesterday evening’s rally with Trump-focused sectors (Financials, Transports, Infrastructure) leading the charge, whilst the technology focused Nasdaq also rallied 1.1% however failed to reach all-time highs.

Crude Oil prices continue to slide as investors looks to Saturday’s meeting between OPEC and non-OPEC producers to confirm the group’s production cut deal. The conditional agreement made in Vienna last week hinged on the participation of non-members, however with the exception of Russia, many producers are tentative about joining the agreement. Concerns US shale producers will pick up production in the wake of the OPEC deal will only further add downward pressure to crude prices.

Gold staged a breakout from a 3 week downtrend as expectations for an extension of the ECB’s QE programme today helped alleviate downward pressure placed on the precious metal by the upcoming US central bank equivalent FOMC meeting next week, further helped by a weaker USD. However, the safe haven asset failed to maintain a break out from the $1178 mark, suggesting limited upside.

In focus today will be the ECB’s latest monetary policy update, with Draghi & co. widely expected to announce a 6-month extension to its current quantitative easing (QE) bond-buying stimulus programme whilst maintaining its €80bn monthly purchase limit. However, the meeting will be more closely watched for any mention of the tapering of QE to hint at an endgame, whether in the ECB’s economic forecasts or Draghi’s post-decision presser.

Macro-wise, a barren European slate means that the only release of note is US Weekly Jobless Claims, although these will likely go unnoticed after last Friday’s blowout unemployment figure.

The only other speaker, Draghi aside, is the Bank of Japan Governor Kuroda shortly after 9am, whilst further Brexit soundbites could arise on the final day of the UK Supreme Court hearing on Article 50. Note, the full result of the hearing won’t be made until January.

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

• Glencore purchases stake in oil giant Rosneft for 10.5 billion euros ($11.3 billion) from Russia alongside Qatar, confounding expectations that the Kremlin’s standoff with the West would scare off major investors.
• Britain’s National Grid has agreed to sell a 61 percent equity interest in its UK gas distribution business  that implies an enterprise value of around £13.8bn, it said on Thursday.
• TUI Group posted core earnings growth of 12.5% in its 2015/2016 financial year, in line with forecasts, and said it was extending by a year an existing profit target.
• Sports Direct reported a 57% slump in first-half profit, capping a calamitous period in which it has come under fire for the treatment of workers and was left badly exposed by the fall in the value of the pound after the Brexit vote.
• British online supermarket Ocado reported a 13.1% rise in fourth-quarter sales, representing a slight slowdown from the previous quarter.
• Workers at BHP Billiton-owned Escondida, the world’s largest copper mine, expect to present the company with their proposal for a new collective contract and begin wage talks later this month, a union leader for the Chilean mine said on Wednesday.
• Tata Steel UK offered British unions a deal guaranteeing jobs and investment on Wednesday in return for pension cuts, moving the company closer to merging its European assets with Germany’s Thyssenkrupp
• British house prices hit a seven-month high in November and companies hired more workers, surveys showed on Thursday, suggesting the economy remained resilient five months after Britain’s vote to leave the European Union.
• Reynolds American Inc, Altria Group Inc and Fontem Ventures, a subsidiary of Imperial Brands Plc: The U.S. surgeon general on Thursday called for action to reduce the use of e-cigarettes among young people, noting they have overtaken cigarettes to become the most commonly used tobacco products among this group.
• Oil prices edged up in thin trading on Thursday after steep falls in the previous session, supported by a weaker dollar, positive economic data and a drawdown in U.S. crude stocks.
• London copper futures edged up on Thursday after losses the session before, buoyed as the U.S. dollar lost ground.