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

UK 100 Index called to open +25pts at 7063, albeit back from a bullish overnight flirt with 7100 to maintain a 6980-7100 range. Bulls need a break back above 7080, if they want to see another test of 7100 while Bears require a breach of 7050 if they want a full retrace to 6980. Watch levels: Bullish 7075, Bearish 7050

Calls for a positive open come after a strong session on Wall St, where Banks and Tech rebounded from this week’s dip into bear market territory (Nasdaq +1.7%). Blue-chips initially benefited from suggestions that US trade czar Lighthizer informed business leaders that new round of China tariffs was on hold, but pulled back from highs after the White House officially denied.

Asian equities are mixed this morning on the back of trade uncertainty while GBP holds firm following yesterday’s Brexit drama induced sell-off and corresponding Dollar weakness helps the commodity space; oil, copper and precious metals all bouncing from November lows.

In corporate news today British American Tobacco & Imperial Brands share FDA concerns on vaping, but say science doesn’t support treating menthol cigarettes differently than other cigarettes. Takeda prices €7.5B unsecured 2020-30 € Senior Notes at 0.375-3% to part-fund Shire acquisition.

AstraZeneca says Phase 3 MYSTIC lung cancer drug trial (Imfinzi + tremelimumab combinations) failed to meet primary endpoints. ITV CEO says is in talks with potential UK partners for new subscription video-on-demand service for launch next year.

OFCOM fines EE (BT) £6.3m and Virgin Media £7m for breaking consumer protection rules with excessive charges for 482K customers who ended contracts early. WPP CFO says plans to sell up to 80% of stake in market-research unit Kantar.

National Grid requests increased electricity distribution rates in Massachusetts and New York (c. $70m extra annual revenues) to cover operating costs. Plans to invest $167m in EV charging infrastructure and energy storage.

Kier Group happy with FY19 targets, albeit H2 weighted. Says H1 costs of transformation programme to exceed savings by £10m, but FY expected neutral. Sale of KHSA JV for £24m, to cut average net debt to £390m in H1 2019 (down from £410m in H2 2018).

Halma acquired radar surveillance provider Navtech Radar for a £21m initial payment. FlyeBe completes £5m sale and 25 year £515K/year leaseback of Hangar 1 at Exeter. RPS finalises Group Leadership Team (GLT) with three key appointments.

In focus today is sure to be the ongoing turmoil surrounding the UK Cabinet and the fate of Theresa May’s Premiership. Following the unveiling of the Brexit agreement, high profile ministerial resignations and a potential vote of no confidence in the leadership, EU and Brexit-sensitive UK Index names (Banks, Airlines, Housebuilders) and GBP could remain volatile into the weekend.

In macroeconomic data, look to Eurozone’s Inflation (10am). Price growth in October is expected to confirm a pick up from 2.1% to 2.2% YoY (fastest since Dec 2012) thanks to higher prices of energy, services, processed food and industrial goods.

US Industrial Production (2:15pm) is seen weakening in October after Hurricane Michael led to energy outages. Strong mining, meanwhile, should help Manufacturing Production pick up.

In terms of speakers, ECB President Draghi (8:30pm, centrist) gives a keynote address at Euro Finance Week, while the Bundesbank’s/ECB’s Weidmann (1pm, hawkish) speaks at the European Banking Congress.

The Fed’s Evans (4:30pm, non-voter, dovish) speaks about current economic conditions and monetary policy at a Fixed Income Forum Roundtable, with moderated audience and media Q&A.

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