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

UK 100 Index called to open +25pts at 7668, rebounding from a 2-week rising support and 7625 overnight lows. Bulls need a break above 7691 to resume the uptrend toward June highs. Bears require a breach 7625 rising support. Watch levels: Bullish 7700, Bearish 7614

Calls for a positive open come in spite of broadly negative trading on Wall St, where S&P 500 fell for the 5th trading day in a row as investors grew weary of turmoil emanating from the emerging markets (Turkey, Latin America). There were some signs of positivity as trading moved to the Asia Pacific, with Japan and Australia higher after June’s Japanese industrial production data came in better than expected (-0.9% YoY vs -1.2% est.).

UK Index Miners could still be sensitive to disappointing macroeconomic data from China, where growth in both Industrial Production (+6% YoY vs 6.3% est.) and Retail Sales (+8.8% YoY vs 9.1% est.) came in worse than expected. In a worrying sign of potential after-effects of the trade war, year-to-date Fixed Asset Investment growth came in at 5.5% YoY, a record low for China. That said, dual-listed Miners (Rio Tinto, BHP Billiton) are positive in Australia overnight.

GBP is stronger this morning, adding to the mixed messages on UK Index ’s direction today, but Brent crude oil prices are rebounding from yesterday’s sharp losses, supporting London’s heavyweight Energy sector.

In corporate news this morning Ofcom has fined Royal Mail £50m for breach of competition law following the investigation into a complaint by Whistl. In a statement, Royal Mail refuted allegations and will lodge an appeal within 2 months (no fine is payable until appeals process is exhausted).

Antofagasta H1 revenue +3.6% YoY, EBITDA -16.2% on higher costs, EBITDA margin -19.1%, cash flow from operations -22.4%. Copper sales -8.6%, gold sales -40.6%. FY copper production and net cash cost guidance unchanged, assuming FX remains at current levels. Copper market outlook favourable, with production expected higher in H2.

Esure H1 gross written premiums +11.9% YoY, trading profit -18.1%, pre-tax profit -20%, impacted by claims due to poor weather  (£14m impact), expects to deliver FY profitable growth. Reached agreement with Bidco (Bain Capital subsidiary) for an 280p/share all-cash offer to take the company private. Due to takeover, no interim dividend is recommended.

WPP relocates its  headquarters from Mayfair in London in exchange for temporary head office at Sea Containers, the offices of Ogilvy and Wavemaker on the south bank of the River Thames.

Polypipe H1 revenue +0.1% YoY, like-for-like op. profit -4.2%, op. margin -70bps, pre-tax profit -1.3%, dividend +2.8%. FY outlook for UK market is mixed, but H2 trading started well and FY guidance reiterated. JPJ H1 total gaming revenue +10% YoY, adj. EBITDA -4% after increased marketing costs and new point-of-consumption gaming tax, FY outlook in line with expectations

UK CMA referred John Menzies for an in-depth investigation regarding competition concerns over de-icing services at Edinburgh, Glasgow and Heathrow airports. Motorpoint plans to start £5m buyback

In focus today will be the UK June Employment Report (9:30am). The headline Unemployment Rate is forecast to stay unchanged at 4.2% for the 5th straight month, with Average Earnings growth likewise expected unchanged at 2.5% YoY (but well off January’s 2.8% peak).

Eurozone Q2 GDP (10am) annual growth rate is projected to slow down to 2.1% from 2.5% in the first quarter, in confirmation of earlier preliminary figures. August German ZEW Surveys (10am) will likely show downbeat sentiment in Europe’s economic powerhouse, with Current Conditions weakening to 72.3. Economic Sentiment is projected negative at -20.7, but the figure is an improvement on July’s -24.7 print (a 2018 low).

In the evening, action turns to the US, with API Oil Inventories (9:30pm) potentially of interest to oil traders. The private API report has been swinging between steep build-ups and drawdowns for the 5 weeks and, with the previous week showing a large 6m barrel draw, investors will be interested to know if today’s report will continue the see-saw trend ahead of the official DOE numbers tomorrow.

A few more US companies are reporting today, including DIY retail chain Home Depot and investment bank Charles Schwab (July monthly sales).

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