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

UK 100 Index called to open -15pts at 7370, back from another failure to overcome 7400 and escape a 2-week falling channel. Bulls require a break above falling highs at 7380, at least, if not 7400 support-turned-resistance. Bears, happy with a breach of 2-day rising lows at 7380, are hoping for a breach of Wednesday’s 7360 lows. Watch levels: Bullish 7400, Bearish 7360.

Calls for a negative start are in spite of a second day of gains in Asia that echoed a positive close on Wall St following more supportive earnings and further helped the House of Representatives vote in favour of the US tax bill. However, Senate’s approval is another matter entirely, already scuppering the repeal of Obamacare to deprive president Trump of any meaningful legislative win.

The culprit for the UK Index is a stronger GBP after the USD dropped overnight on news that Trump’s campaign was subpoenaed for documents regarding Russia. This has been compounded by hopes of Brexit bill negotiations, hindering the UK Index ’s international exposure more than it is helping its commodity contingent. We also note dual-listed Miners in the red downunder, and Brent Crude Oil underperforming its US Crude cousin.

In corporate news this morning Carillion issues a profits warning, expects to breach debt covenants, will require some form of recapitalisation in Q1 2018. Ferrexpo secures $195m loan to bolster earnings. Keir says trading in-line with expectations, on-course to deliver double-digit profits growth. Rentokil readies €400m bond issue to repay loans.

US equity markets pared some of this week’s losses on Thursday as strong earnings for Wal-Mart aided wider market sentiment. The world’s largest retail group surged 11% to a fresh all-time high, helping the Dow Jones to climb by 187 points, while fellow component Cisco rallied 5% after earnings. The S&P 500 saw its Consumer Staples sector lead the index higher, while the Tech-focused Nasdaq outperformed, rising 1.3%.

Crude Oil prices remain under pressure as 1-week falling highs resistance sees both Brent and US benchmarks trade at key intersecting support levels. Brent crude is holding just above $61.1 and trading off its lows as the US dollar retreats, while US Crude has outperforms its peers having continued to pick up from Wednesday’s $55 lows.

Gold is trading higher overnight as the US dollar falls following the Republican tax reform plan passing through the House of Representatives, however the precious metal has fallen from an overnight high of $1284 as it encounters intersecting resistance. The greenback will continue to drive sentiment for Gold throughout the day.

In focus today – a quiet end to a busy week for macro data – will be prints including Eurozone Construction output (10am). No consensus, but note a slowing pace of growth since February.

This afternoon, US Housing Starts (1.30pm) are forecast recovering from 12-month lows and Building Permits to regain its 4-month average. As for the Kansas City Fed (4pm), note both Empire Manufacturing and Philly Fed both missed expectations, falling much more than expected.

Speakers today include ECB President Draghi (8.30am), giving a keynote speech “Europe into a New Era – How to Seize the Opportunities” at the European Banking Congress followed by  hawkish colleague Jens Weidmann (1pm) at the same event. The Fed’s Williams (10.30pm; centrist, voter next year) closing the week after the Wall St close.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.