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

UK 100 Index called to open flat at 7495, having traded sideways around 7500 overnight, as high as 7515 and with a 7490 floor. This keeps the bullish inverse Head & Shoulders in play although falling highs since yesterday’s peak must be monitored (bearish descending triangle top?). Bulls need a break above 7510; Bears are eyeing a breach of 7490. Watch levels: Bullish 7510, Bearish 7490.

A flat opening call comes as Asian markets react cautiously to yet another terror event, this time in Manchester. This latest horror merely adds to a melting pot of UK frustration as the country deals with ugly election campaigning before a June 8 snap general election and what is sure to be even uglier Brexit negotiations that begin just weeks after.

The UK Index is holding up for the moment thanks to fresh GBP weakness as the US Dollar finds support following its Trump-induced sell-off. Interestingly, the German DAX underperforms in spite of the EUR coming off its highs versus the Greenback, normally a benefit for its army of exporting names.

Japan’s Nikkei underperforms as the Yen benefits from traditional safe-haven seeking to hinder exporters. Australia’s ASX posts small losses as financials fall and Copper, Iron Ore and Oil come of recent rebound highs – USD off its lows, and despite OPEC optimism – to hamper Energy and Miners.

US indices closed higher across the board on Monday, with the S&P 500 returning to within touching distance of all-time highs. Closing only around 0.4% from the previous record, the Tech sector led risers on the S&P, a performance that helped the Nasdaq to outperform peers. The Dow Jones was led once again by Manufacturers (3M, Boeing) as President Trump continues his Middle Eastern tour, while Pfizer and DuPont contributed the most losses.

Crude Oil prices have edged lower overnight as investors take stock of the 3-week, 14% rally from near 6-month lows, engaging in profit taking that sees both Brent and US benchmarks fall back below resistance at $54 and $41 respectively. Markets will continue to monitor the latest rhetoric from OPEC members ahead of Thursday’s meeting in Vienna to discuss an extension to production cuts, while tonight’s API inventory data provides the latest insight into US production.

Gold has ticked higher overnight on fresh safe-haven demand, brought about by last night’s terror attack in Manchester. The precious metal now tests resistance at $1262 for the second time in under a week, further underpinned by the US dollar touching fresh 6-month lows overnight. Further greenback weakness could inspire a break above to test 11-month falling highs resistance at $1283.

In focus today, will be ongoing reaction to events in Manchester, where a terrorist attack killed more than twenty concert goers and injured many more late last night. UK Election campaigning has been suspended as a result, as May’s Tory lead continues to be eroded in favour of Corbyn’s Labour, with 90,000 new voters registered just yesterday for 8 June.

Data-wise, we eye a deluge of Manufacturing & Services PMIs. This morning, French Manufacturing is seen virtually flat while Services tick lower, the same being true for German and Eurozone Manufacturing although Services should hold steady. This afternoon, US Manufacturing is seen improving slightly while Services hold firm.

Other releases include German IFO surveys, expected to tick slightly higher across the board, shortly before UK Public Sector Net Borrowing is forecast to almost double in April while CBI Retail Sales are seen falling sharply in April. US New Home Sales are expected to retreat from April’s 9-year highs, while the Richmond Fed Manufacturing Index continues to edge back from March highs.

The roster for speakers today is jam-packed, with German Chancellor Merkel (10am) kicking things off, before the Fed’s Kashkari (2pm & 8:15pm) speaks either side of the ECB’s Coeure (4pm; roundtable discussion on “Impact of macroeconomic policies on European imbalances” at the 10th anniversary of the Paris School of Economics). The Philadelphia Fed President Harker (10pm) rounds things off with a presentation and audience Q&A in New York.

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

• Britain suspends election campaign after terror attack
• Oil prices fall as White House proposes U.S. oil reserve sales
• Greencore sees 5% UK packaging, raw materials inflation in H2
• Topps Tiles says 26 – week revenue fell 1.3% to £106.6m
• Severn Trent’s pretax profit up 4.3% on higher prices, savings
• Entertainment One posts FY pretax profit £37m
• De La Rue full – year pretax profit rises
• Britain’s Nationwide Building Society profit falls 23%
• Australia’s Rio Tinto slips as copper prices edge lower
• Homeserve posts FY adjusted pre – tax profit £112.4m
• Genomic Vision to enter into technological collaboration with AstraZeneca in oncology
• Astrazeneca says Bydureon EXSCEL trial meets safety objective in diabetes patients
• Copper prices steady as dollar weakens; China data in focus
• Gold prices steady despite Manchester blast, US political woes support