Political uncertainty. Everywhere!

Political uncertainty. Everywhere!

Mike van Dulken, Head of Research at Accendo Markets commented to clients this morning:

FTSE 100 Index called to open -15pts at 7510, back from Friday’s highs of 7530 and an overnight spike as highs as 7540 to test intersecting falling highs resistance at 751. Bulls need a break above 7530 to inject fresh impetus; Bears need a breach of round number 7500. Bullish 7530, Bearish 7510.

Calls for a negative open come after disappointing China PMI Services data sapped an otherwise decent start to the week in Asia at odds with a negative Friday finish for Wall St that saw it end its record run. Political uncertainty continues to dominate, be it stateside, North Korea, Spain or closer to home in Westminster, helping safe haven Gold break higher.

With Japan’s Nikkei closed for holiday, Asian trading is buoyed by China gains on its return from Golden week, playing catch-up and ignoring PMI data that has seen Australia’s ASX pull back from an overnight flirt with fresh October highs fuelled by Telecoms and Industrials.

A weaker USD is presenting a hurdle for the UK FTSE by way of reciprocal GBP strength. Germany’s DAX, however, is benefiting from Euro weakness amid Catalonian independence concerns and strong German Factory Orders data.

FTSE headlines this morning include Smith & Nephew CEO Olivier Bohuon to Retire by End of 2018. AstraZeneca: FDA Grants Tagrisso BTD for 1st-Line EGFR. AMEC Foster Wheeler to sell most of UK North Sea business for £228m.

Imagination Tech and Canyon Bridge to publish scheme document containing full terms and conditions of acquisition.Centamin record gold production +26% QoQ, 5% YoY. Maintain 2017 guidance. Interserve wins £70m Housing Development Contract in Leeds. Trinity Mirror 3Q revenue -8% on local advertising decline.

Oil prices are off Friday’s lows helped by a lower US rig count and OPEC Secretary General Barkindo saying there is a growing consensus that a rebalancing process is under way, gradually but steadily, achieving common and noble objective, although extraordinary steps may still be needed.

Gold has broken back above falling highs resistance at $1276 to test $1281 amid fresh geopolitical concerns, most notably towards North Korea with the threat of another missile test.

In focus today will be the Eurozone Sentix Investor Confidence (9.30am), forecast up a notch in October, holding around recent 10yr highs. Thereafter, data is distinctly lacking on account of the US Columbus Day holiday, meaning all we have to go on is speeches and soundbites from the Eurogroup meeting and the 5th round of Brexit negotiations.

The ECB’s Mersch (9.45am) gives keynote speech at the 9th international banking conference on banking and financial regulation in Milan. Colleague Lautenschlager (5pm) gives a speech at Hohenheim University organised by the Banking Industry Foundation in Stuttgart.

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