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

UK 100 Index called to open -20pts at 7145, giving up a little ground from Friday’s close but still holding above rising support going back to February’s sell-off trough. Bulls need a break above 7155 overnight highs. Bears need a test/breach of rising support at 7120. Watch levels: Bullish 7155, Bearish 7120

Calls for a slightly negative open come in spite of Wall St’s positive close on Friday, with Asian stocks on the back foot after the EU’s weekend publication of a tariff retaliation list while 45 US trade associations said US tariffs would trigger a chain reaction of negative consequences. Otherwise Asian trading ahead of this week’s Fed meeting and likely rate hike and the rising potential of a genuine global trade war. Note Energy sector strength after Oil’s Friday breakout.

Corporate news this morning: Melrose Industries offers an additional £1bn injection to GKN’s pension fund, to help secure the hostile takeover, and lowered the acceptance to 50% + 1 share. GKN says new combined Dana and GKN Driveline business to have LSE listing. Hammerson has rejected a 615p cash and share approach (40.7% premium) from France’s Klépierre. The CEO of MicroFocus leaves after profits warning. Carillion executives investigated by FRC. Barclays says activist investor Sherborne acquired 5.2% Stake.

The likes of William Hill, Paddy Power Betfair and Ladbrokes Coral may be sensitive to the UK Gambling Commission’s recommendation of a maximum stake for fixed-odd betting terminals (FOBT) set “at or below £30” (Slots stakes limit £2, non-slot limit £30 or lower) along with game limits per session, tracked play and player limits.

US equity markets closed higher on Friday, however ended lower on the week as concerns about a trade war weighed on sentiment. The Dow Jones outperformed on Friday, finishing 0.3% higher thanks to Walmart and Caterpillar gains, while Boeing was the week’s worst performer, down 6.8%. The S&P 500 closed 0.2% higher on Friday, but fell 1.2% on the week while the Tech-heavy Nasdaq underperformed, closing just above breakeven on Friday as large-cap Alphabet (Google) and Amazon fell 1.4% and 0.7%, respectively.

Gold has made a disappointing start to the week, falling below $1310 as the US dollar trades a near 3-week high overnight. While the precious metal has recovered from overnight lows of $1308, it needs to better support-turned resistance at $1314 for a chance at recovering to Friday’s highs, as well as the ceiling of a near 1-week falling channel. The tone of today’s G20 meeting and its impact on the US dollar could move the safe-haven asset today.

Crude Oil benchmarks have held onto gains made after a technical breakout on Friday, despite edging back from their highs, and may potentially be setting up for bullish flags higher. Having recovered from overnight lows as the US dollar edges back from highs, Brent crude needs to overcome $66.2 for a chance at a flag higher, while avoiding breaking down from $65.8 support, and US crude targets $62.4 on the upside with support at $62.

In focus today (and this week) will be today’s meeting of G20 Finance Ministers and central bank chiefs in Buenos Aires where the agenda will focus on unfair trading in light of the US threatening a trade war (note steel tariffs may be signed into law on Friday). Thereafter the main event of the week is likely Wednesday’s Fed policy meeting, and expected rate hike, under new chair Powell.

Thursday sees the start of a 2-day EU summit to discuss a provisional deal on Brexit, but only if all divorce matters (including the Irish border) are resolved. The Bank of England Monetary Policy Committee also meets Thursday, and while a rate hike is on the horizon, it is highly unlikely this month without an accompanying press conference.

Data-wise, the only releases of note are Eurozone Trade Balance and Construction Output (both 10am).  The former is expected to pull back to a 3-month low, edging lower for a third consecutive month, while the latter will look to avoid turning negative following an 11-month low print in December.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.