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

UK 100 Index called to open +10pts at 7425, holding just shy of recent 7435 resistance. Bulls still require a breakout to extend the recent rebound towards August highs of 7560. Bears are still simply looking for another failure at said hurdle and another retrace towards 7300. Watch levels: Bullish 7440, Bearish 7420

Calls for a positive European open follow US equity index gains of 1%+ (fresh S&P record closing high), bolstering this week’s revival of risk appetite on reduced geopolitical and meteorological concerns. This has inspired Asian bourses to push further north, at the continued expense of the usual suspect gold and fixed income safe havens.

Overnight, fresh sanctions on North Korea weren’t quite as strong as the US had been looking for, stopping short of a ban on oil imports. UK PM May also survived another Parliamentary vote on her Brexit bill although not without significant resistance – from both sides – and the likelihood of major amendments being attached.

Japan’s Nikkei outperforms again thanks to Yen weakness and oil off its geopolitical calm and dollar bounce inspired lows. Australia’s ASX advances, but at a slower pace, hampered by declines for Gold miners as the flight from safety bites.

In UK Index corporate news Ashtead says Q1 trading inline, results flattered by weak Sterling, sees increased demand for fleet, Hurricanes already generated significant activity, expects them to underpin market assumptions though 2021.

Elsewhere, AA had preliminary talks with Hastings in early Summer. JD Sports H1 pre-tax profit +33%; expects the year-end out-turn towards upper end of market expectations. Redrow Chairman completes 7% stake sale. Wood Group and Amec Foster Wheeler said the CMA has accepted suggested remedy for the former’s takeover of the latter.

US equity markets closed sharply higher on Monday as US damage from Hurricane Irma was much less than initially feared, propelling the S&P500 to a fresh record closing high. The index’s biggest one day gain since late April came alongside a 250 point rally for the Dow Jones, as Apple (ahead of today’s product launch), Goldman Sachs, The Travelers and 3M all produced strong rallies. The Tech-focused Nasdaq also closed over 1% higher.

Crude Oil prices are holding onto yesterday afternoon’s gains made after falling to 4-day lows shortly after midday. Brent Crude, despite retreating from falling highs resistance around $53.75, remains supported above $53.5, while US crude is maintaining a $48 handle having rallied from yesterday’s $47 low.

Gold has halted its risk-on sell-off having found intersecting support around the $1234 mark. This is further helped by the USD retreating from its overnight highs, however the global reserve currency remains in an uptrend from Friday’s fresh 33-month lows. Once more, sentiment is likely to be dictated by geopolitics and USD strength, with a flare up in either likely to result in a test of both $1324 intersecting support and $1320 1-month rising lows support.

In focus today will be UK Inflation prints (9:30am). Headline Consumer Price Inflation (CPI) is seen rising in August, accelerating to 2.8% on an annual basis alongside the Bank of England’s Core measure. While creeping towards the the 3% mark, it is expected to remain a distance from May’s highs of 2.9%, and BoE hawkishness is likely to be avoided should Governor Mark Carney attribute this uptick to weaker Sterling in August (-2% vs USD; -2.6% vs EUR) – as has been the case since last year’s EU referendum – and especially given the currency has reversed course since. Note Retail Price Index (RPI) also ticking higher, while the House Price Index retreats marginally in July.

Elsewhere, US NFIB Small Business Optimism (11am) is seen falling back following July’s 5-month high reading, while US JOLTs Job Openings (3pm) are understandably expected to retreat after June’s highest ever reading, although is expected to notch its second highest in July.

There are plenty of speakers scheduled today, which is likely to be accentuated by comments from the UK Government following last night’s Commons victory for the EU Repeal Bill. On the roster are BoE Market Director Salmon (10:20am) sharing thoughts in Barcelona, ECB Vice President Constancio (2:45pm) provides the concluding remarks at the ECB’s workshop on Monetary Policy in non-Standard Times and Chancellor Philip Hammond (3:35pm) provides evidence to the House of Lords’ Economic Affairs Committee.

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

• • Ashtead’s 1Q 2018 Earnings Grew; Hurricanes May Boost Fleet Demand
  • AA Did Have Preliminary Talks With Hastings in Early Summer
  • JD Sports 1H Pretax Profit Rises 33%
  • Redrow Chairman Completes 7% Stake Sale
  • Wood Group (John) says CMA accepts remedies for AMEC takeover