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

UK 100 Index called to open -20pts at 7305 with futures having fallen sharply overnight after opening at 7335, briefly dipping below key 2-month support at 7300 amidst an ongoing challenge of the pivotal psychological level. Bulls will hope that the proximity to 7300 will only prove temporary, eyeing a break above 7310 in a bid to return to overnight highs. Bears on the other hand will be looking for 7300 to give way for a sharp move lower.  Watch levels: Bullish 7315, Bearish 7295.

Calls for a negative start to the week come after a re-escalation of geopolitical tensions ahead of a joint US and South Korean military exercise, which in turn has led to a negative session for Asian equity markets. The manoeuvres have prompted a hostile reaction from Seoul’s neighbours to the North, claiming that a ‘merciful strike’ will be unleashed upon the US territories of Guam and Hawaii.

Investors will also be eyeing key events later this week, including the US Federal Reserve’s annual symposium at Jackson Hole taking place over the course of three days from Thursday onwards. Finally, note Rightmove overnight reported that UK house prices fell in August by the largest of the year so far, down 0.9% from July, with prices in London falling by 1.9%.

Asian markets are trading predominantly lower as tensions in the Korean peninsula dampen wider risk sentiment, while corporate results in Hong Kong help its Hang Seng index to outperform in the region. Japan’s Nikkei and Australia’s ASX are both 0.4% lower, with poorly received results for Bluescope Steel (-20%) weighing on the latter.

US equities closed lower on Friday, however welcomed the news of Steve Bannon’s departure from the White House and eventually closing off session lows. The Nasdaq outperformed, falling by  just 0.1%, while the S&P 500 fell by 0.2%. The Dow Jones underperformed, closing 0.5% lower as Nike weighed following weak results from Foot Locker.

Crude Oil has maintained Friday’s gains after widespread short covering on Friday prompted a sharp move higher. Brent crude has held above $52.50 while its US counterpart trades just shy of $48.50. Gold has ticked higher overnight after falling to $1280, its lowest level since Wednesday’s sharp rally following the Barcelona terror attacks.

With a quiet macroeconomic calendar to start the week, in focus today will likely be political events on the other side of the Atlantic as the Trump administration returns after the weekend to a Steve Bannon-less White House. The divisive political operator was oft seen as the leader of nationalist sentiment within President Trump’s cabinet, with many hoping his departure will usher in a fresh urgency to pass pro-business reforms through Congress.

The only data of note today are UK Public Sector Net Borrowing (9:30am), looking for the deficit to have declined for a fourth consecutive month, while the US Chicago Fed National Activity Index (1:30pm) will look to post its first back-to-back positive readings of 2017.

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

• John Wood awarded five – year maintenance service contract for Phillips 66 refinery
• Avocet Mining says standstill agreement extended to Aug. 25
• Rathbone says Smith & Williamson merger would bring benefits
• The victor, the spoils? Trump eyes Afghanistan’s elusive mineral riches
• Student online lender Prodigy Finance raises $240m in equity and debt
• Gold trades little changed as investors focus on geopolitics, central bank meet