Mike van Dulken & Henry Croft at Accendo Markets commented to clients this morning:

FTSE 100 Index called to open flat at 7725, still hugging the 7715 floor of December’s rising channel. Bulls need a break above 7740 overnight highs to pave the way towards 7800. Bears need a test of that 7715 rising floor, if not a breach of 7700. Bullish 7740, Bearish 7715


Calls for a flat start to the week derive from a tepid debut in Asia (ex-Japan), failing to grab hold of Wall St coattails where we saw yet more record highs, even after a disappointing jobs report. Tech remains strong. Mixed Fed chat and lower oil and commodity prices (Copper) may be a hindrance, along with disappointing German Factory Orders data, although progress on German coalition talks helps quell political concerns, not that geopolitics really hurt markets last year, or the year before.


In UK corporate news this morning: Babcock International launches ‘Team 31’ bid for new UK £1.25bn general purpose light frigate. Micro Focus ups dividend, continues to integrate HPE Software, announces management changes. Mothercare warns on profits. TP ICAP acquires SCS Commodities, an independent US energy and commodities broker.  Solo Oil and Aminex say progressing towards drilling the second appraisal well, Ntorya-3, Tanzania.


US equity markets rose on Friday, capping off the best start to a year since 2006 for the Dow Jones and Nasdaq despite a weaker than expected Non-Farm Payrolls print. The former climbed over 200 points, outperforming peers, as Boeing shares surged after reports of a potential tie-up with Brazil’s Embraer, while the latter climbed 0.8% as both Apple and Alphabet closed at record levels. The S&P 500 also climbed to a fresh record high thanks to that Tech sector strength.


Crude Oil prices are trading slightly lower overnight as the US dollar extends its rally from last week’s lows and analysts continue to weigh up the ongoing impact of US shale oil production increases against OPEC/non-OPEC cuts. Global benchmark Brent has continued to fall from Thursday’s two and a half year highs of $68.6, holding just above $68, while US crude holds at $61.5 from highs of $62.2.


Gold is trading at intersecting support of $1318, back from Thursday’s highs of $1326 as the US dollar extends its recovery from last week’s lows. Traders have seized upon hawkish speak from 2018 Federal Reserve voting members over the weekend, which has in turn hurt the non-yielding safe haven asset. Further speeches from incoming FOMC voting members this afternoon could impact the precious metal should 2018 monetary policy be discussed.


In focus today will be UK Halifax House Prices (8.30am) which, despite being expected to show a cooling have potential to surprise to the upside, benefiting UK housebuilders, in light of Nationwide’s data beat consensus last Thursday.


Eurozone Sentix Investor Confidence (9.30am) and Eurozone Business Confidence (10am) are all seen pretty much flat while Retail Sales (10am) are forecast to have rebounded. Any news on the UK government cabinet reshuffle could also have an impact on Brexit sentiment and GBP.
Today’s central bank speakers include a trio of Fed members of which two are voters this year. Bostic (voter; 5.40pm) speaks on “Economic Outlook and Monetary Policy”, Williams  (voter; 6.35pm) “Should the Fed Stick with the 2% Inflation Target or Rethink it?” and Rosengren (9pm) at the same Inflation Targeting Conference.

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