Markets Overview:

UK 100 called to open -15pts at 7350 (ex-div -4.5pts), consolidating the Tues/Weds pullback from 7420. Bulls need a break above 7360 to overcome falling highs resistance. Bears require a breach of 1-month intersecting support at 7335 for further downside. Watch levels: Bullish 7365, Bearish 7330

Calls for a negative start in the City stem from more losses on Wall St/Asia after oil tested a fresh multi-month low of $60 amid concerns of over-supply, especially from the US. Investors continue to tread cautiously around risk assets amid actual trade tensions or threats thereof.

After tame US inflation data, the debate persists about the need for more stimulus (US rate cut? More QE from the ECB?) being as much to do with slowing growth as an inability to deal with higher rates after so many years of extreme accommodative policy. New normal?

Copper stuck around recent lows after 2% pullback. Gold back around its rebound highs amid investor uncertainty about risk assets. Brent Crude Oil prices back up at $61.3, but still 16% off May highs. GBP flat versus USD and slightly weaker vs EUR.

In corporate news this morning:

Tesco Q1 like-for-like sales growth excl. fuel slows to +0.2% (UK +0.4%, RoI +1.3%, UK & RoI +0.8%, Booker +3.1%, Europe -4.9%, Asia +0.1%); Strong Easter, beat subdued UK grocery market (online +7%), invested further in price. Europe impacted by cooler weather. Booker doing well.

Marks & Spencer gets 85.1% acceptance for fully underwritten 1-for-5 185p/share £601m rights issue to help fund its new JV with Ocado.

Trian Funds purchase 5.98% stake in Ferguson for £736m.

Ocado and Kroger break ground on automated 335K sq ft warehouse in, Ohio, costing $55M.

Morrisons and Amazon are to expand their ultra-fast same day, online grocery home delivery service to more cities across the UK; Morrisons becomes a retailer on Amazon’s Prime Now website and app, through ‘Morrisons at Amazon’, and selling directly to customers.

Vodafone Germany acquires spectrum for 5G services for €1.9B; achieved overall auction objective and secured additional spectrum through to 2040.

DS Smith  FY revenues +12%, adj. Op profit +28%, adj. Pre-tax +31%, final div +12.2%; Free cash flow +84%, Return on Sales +130bp; Continue to gain market share in EU; US performing well following acquisition; ups medium-term return on sales target and adds to cost synergy estimate.  Saw volume weakness in certain export-led markets in H2, incl. Germany, but expect this to improve.

Polymetal more than doubles gold Ore Reserves at Veduga gold deposit to 2.8Moz following extensive exploration campaign.

Moody’s affirms London Stock Exchange at A3 Senior and changes outlook to Positive

PZ Cussons CFO Brandon Leigh has resigned stepped down from the Board with immediate effect.  Full year profit expectations in line with Jan and April guidance;

Cineworld announces $270m sale and 15yr leaseback of an additional 18 US-based cinemas. Part of proceeds to be returned via $278m special dividend.

Majestic Wine FY revenues +6.3% (Naked Wines +14.5%); adj. EBIT -33.8%; Final dividend suspend, to be replaced with special dividend equal to final FY18 payment, contingent on completion of Majestic sale. Chairman Greg Hodder steps down

In focus today:

Eurozone Industrial Production (10am) should remain weak, reinforcing concerns about the region (especially Germany) and perhaps the need for more ECB stimulus before Draghi departs.

US Import and Export Prices (1.3pm) will be looked to for signs of tariffs driving import price inflation (although US inflation was lower yesterday) as well as hampering exports growth.

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