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

UK 100 Index called to open -5pts at 7375, testing overnight lows after failing to overcome overnight intersecting resistance at 7390. Bulls need a break above 7390 to re-open the door to recent 7435 highs. Bears require a breach of 7375 overnight lows to kick off a revisit of rising support at 7340. Watch levels: Bullish 7395, Bearish 7370.

Calls for a slightly negative open come despite a third S&P record high as sentiment in Asia once again waned overnight. The driver overnight is a disappointing batch of Chinese economic data (Retail Sales, Industrial production), that leads to fresh questioning about the strength of the key economy. More aggressive rhetoric from North Korea towards Japan hasn’t helped either.

Japan’s Nikkei in the red (double-top?) as the benefit of USD inspired Yen weakness is offset by strength versus both EUR and GBP. Australia’s ASX outperforms, with smaller losses, thanks to jobs data and Media stocks welcoming the idea of less controls on ownership. Energy also likes the higher Oil price, offsetting Miners struggling with lower metals prices following the China data.

In UK Index news: UK housebuilders may react to better than expected RICS data overnight. Next profits fall. raises sales guidance and nudges up pre-tax profits guidance. Morrisons profits rise, ups dividend, reduces net debt, says sales to exceed £700m by end-18, and net debt to remain below £1bn. Thomas Cook forms strategic alliance with Expedia to reduce holiday costs.

JD Sports Fashion Conditional combination with Sport Zone in Iberia. GlaxoSmithKline announces unanimous FDA approval for Shingrix in over 50s. AstraZeneca says Aspen acquires remaining rights to AZ anaesthetics for $555m. GVC Holdings posts H1 warnings growth; sees profits above consensus. GKN Chief Executive Nigel Stein to retire.

All three major US indices closed at fresh record highs on Wednesday as Energy names benefited from an uptick in Crude Oil prices, which helped to offset general weakness in Tech stocks. The Dow Jones led the way thanks to gains for Chevron, which negated losses for Caterpillar, while the S&P 500 ticked marginally higher thanks to its Energy sector offsetting Tech losses following Tuesday’s record high close for the sector.

Crude Oil benchmarks have maintained yesterday afternoon’s gains after the US EIA reported that largest drawdown in US gasoline stocks on record. Coming after Texas and Florida were hit by destructive hurricanes, markets now expect a demand surge stateside to cover the sharp decrease. Brent crude briefly traded above $55 a barrel, a fresh 5-month high, before dipping marginally lower, while US crude has retreated from resistance at September highs of $49.4.

Gold has extended losses overnight as the US dollar continues to rally from last week’s 33-month lows. Having rallied sharply yesterday afternoon, the global reserve currency has paused at 1-week highs, although a break above resistance could see a bullish flag pattern to a September high. This would put the precious metal under further pressure as it trades at 3-month rising lows support; a break below $1319 support could see Gold trade a fresh September low.

In focus today will be the Bank of England’s latest monetary policy update (12pm). With inflation having accelerated to 2.9% in August (almost 1% higher than the bank’s 2% target), while unemployment hit a 42 year low and wages growth remained stagnant, the balance of voting will be key in terms of message about how likely a rate hike is within the next 6 months.

After the BoE, traders’ attention will shift to US Inflation and Earnings prints (1:30pm). Headline Inflation is expected to tick marginally higher for a second straight month, much to the relief of Fed policymakers, however the Core measure, usually seen as the central bank’s preferred measure, is expected to dip to a 33-month low. Just like in the UK, with a similar inflation/jobs/wages quandary, real average earnings growth may even be of more interest.

Alongside the BoE minutes – released simultaneously with the policy decision – key events include speeches from German Chancellor Merkel (9am) ahead of the German election in less than two weeks’ time, while the ECB’s Weidmann (4:30pm) and his colleague Mersch (5pm) both speak at a conference held in Estonia contemplating the way forward for the EU27 and Eurozone.

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

• Thomas Cook partners with Expedia for hotel sales
• UK retailer Next nudges full – year outlook higher
• Astrazeneca says Aspen acquires remaining rights to AZ anaesthetics
• GVC sees full – year earnings ‘comfortably ahead’ of estimates after solid H1
• Morrisons turnaround gathers pace with profit rise
• Genel energy says Taq Taq field partners receives gross payment of $10.22 mln
• Booker Group says Q2 like – for – like total sales up 1.3 pct
• Interserve says outturn for year will be below prior expectations, warns about trading in Britain, higher costs
• GlaxoSmithKline announces unanimous FDA approval for Shingrix in over 50s
• Tesco acquisition target Booker reports Q2 sales up 1.3 pct
• Safestore expects full year earnings to be in line with expectations
• Spire Healthcare H1 profit slumps on impairment charge, start – up costs
• Barclays wins end to U.S. litigation over pre-crisis disclosures
• London house prices record biggest fall since 2008 – RICS
• Oil holds gains, buoyed by hopes for robust demand
• Gold slips to lowest in nearly 2 weeks, U.S. inflation data in focus