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

UK 100 Index called to open -35pts at 7355 after extending yesterday afternoon’s losses overnight to trade at its lowest level since Monday’s European open. Having pared this week’s gains, Bulls will be encouraged by the 25pt rally from overnight lows and eye resistance just above 7355 as a key hurdle for a late week surge. Bears on the other hand look for former support levels at 7360 to act as resistance to inspire a breakdown from overnight rising lows and test support at 7300, potentially confirming a bearish flag to 7200.  Watch levels: Bullish 7365, Bearish 7345.

Calls for a sharply negative open come after another deadly terrorist attack rocks mainland Europe, while speculation about the future of key economic advisers within the Trump administration led US bourses to their worst single session loss in three months.

A tragic terror attack striking at the heart of Barcelona, killing 13, has shaken European futures overnight, while a tweet yesterday indicating that Gary Cohn, Director of the National Economic Council and a critical influence on policy decisions in the White House, had resigned from his post shocked US markets shortly after the open. Despite the tweet being deleted and officially denied by the White House, the damage had already been done, and comments suggesting that there was “no smoke without fire” soon emerged.

This comes only a day after President Trump’s business councils were disbanded amid rising pressure on CEOs to cut ties with Trump due to a lacklustre response to violence at White Nationalist protests over the weekend, creating wider uncertainty about the administration’s ability to pass business-friendly reforms. Amid a light data docket today, can the White House steady the ship heading into the weekend?

Asian markets are following the lead from their US counterparts, trading lower across the board. Financial sectors are subject to significant losses as US sector deregulation looks increasingly unlikely, seeing Japan’s Nikkei fall by 1.2%, Hong Kong’s Hang Seng fall by 0.7% and Australia’s ASX fall by 0.5%.

US equity markets closed were subject to their worst single session in three months yesterday, crucially with all three major indices closing at session lows yesterday. The Tech sector was badly hit in the sell-off, resulting in the Nasdaq falling by almost 2%. The S&P 500 followed suit, closing 1.5% weaker, while Cisco led the Dow Jones lower by 1.2% after releasing disappointing Q2 results.

Crude Oil prices have moved higher overnight having fallen to fresh 3-week lows yesterday morning. Signs that US supply may be tightening have put a bid into both Brent and US crude benchmarks, with the former crude stocks, with the former approaching yesterday’s highs of $51.10 while the latter holds above $47.

Gold has been pushed higher overnight thanks to increased safe-haven demand after the Barcelona attack and signs of further White House uncertainty. Having fallen back from an overnight high of $1289.5 to an overnight low of $2186, the precious metal is once again rallying and fast approaching a $1989 handle.

On the quietest day of the week for macroeconomic data, the only release of note will be the University of Michigan Sentiment (3pm), with expectations for the August print to end three months of consecutive declines having notched a fresh 2017 low in July.

Federal Reserve FOMC centrist voter Kaplan (3:15pm) is once again on the speaker trail, taking part in a moderated Q&A session in his jurisdiction of Dallas.

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