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Good morning Vienna

Published: 08:10 25 May 2017 BST

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FTSE 100 Index called to open +15pts at 7530, having broken above 7520 resistance overnight and made fresh record highs in the last hour. Bulls need 7520 to hold up as support if they want to see another leg higher (2-week bullish inverse Head & Shoulders pattern back on?). Bears require 7520 to give way to kick off a reversal. Watch levels: Bullish 7540, Bearish 7520.

A positive opening call after further gains on Wall St (more records) and in Asia overnight. This as oil prices remain firm ahead of the OPEC meeting and commodities (ex-iron ore) welcome a weaker USD after the latest Fed minutes supported market expectations of another US rate hike next month and welcome flexibility when it begins to shrink its QE-inflated balance sheet.

Japan’s Nikkei is higher despite a stronger Yen (after the USD sold off), with Energy buoyed by the oil price. Australia’s ASX is up to the same degree, helped by commodities and a strong rebound in Chinese equities which are shrugging off yesterday’s Moody’s credit downgrade.

US equity markets once again closed higher as the S&P 500 recorded a fresh all-time closing high. This latest move higher comes as investors welcomed the hawkish Fed minutes from May, with expectations of a June hike increasing further. The Dow Jones saw Goldman Sachs contributing the most gains for the second straight session, while the Nasdaq again outperformed, up 0.4%.

Ahead of today’s OPEC meeting in Vienna, Crude Oil prices have continued to trade around 1-month highs, with global benchmark Brent crude recovering from overnight lows to trade just short of $54.50 and US crude marginally below $52 from $51 lows overnight. While markets are expecting a 9-month extension to the group’s current agreement, a deepening of cuts would fuel bullish sentiment, whereas anything shorter than 9 months would likely see prices fall.

Despite the hawkish Fed minutes, Gold has rallied overnight to test $1260. This move comes as the US dollar weakened on account of the Fed stressing flexibility when it comes to addressing its bloated balance sheet. This helped the precious metal to rally from $1252 lows to pare half of Tuesday’s dollar rally induced losses and once again head towards a test of 15-month $1262 intersecting resistance.

In focus is an OPEC meeting from which markets expect a 9-month extension to coordinated oil production cuts. Closing press conference at 4pm, but prepare for drama throughout the day as oil ministers fill the airwaves with commentary on the day’s discussions. A 9-month cut extension has been talked up so much that anything less will likely be a disappointment. Watch Oil prices.

The second estimate for UK Q1 GDP (9.30am) is expected unchanged, suggesting a slowdown - probably echoed by the Index of Services print - while the annual pace of growth gets back above 2.0% for the first time since Q2 2015. Watch GBP. BBA Home Loans likely fell for a fourth month, to levels last seen in Oct/Nov. Watch shares in UK Housebuilders.

In the afternoon, US Wholesale Inventories (1.30pm) are forecast flat, while Jobless claims rise off last month’s lows. After this week’s Chicago Fed beat and Richmond Fed miss, the Kansas City Fed Manufacturing Index (4pm) will be looked to for its own regional assessment. Watch USD.

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