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

UK 100 called to open +5pts at 6795 after a positive US close (new all-time highs for DJIA) on relief that the Fed FOMC policy update maintained its dovish slant but a mixed session in Asia overnight due to slowing Chinese property price growth (slowest ion 18 months) despite looser policy, which just went to highlight the current divergence between the world’s #1 and #2 economies.

While the Fed language appeased (‘rates low for considerable time’, ‘labour market underutilisation’), in addition to lower than expected US Consumer Price inflation, the FOMC committee hawkishly raised its end-2015 rate target was to a level well above current market pricing, which served to offset some of the relief.

The resulting rally in USD and thus weakening in the JPY sees Japan’s Nikkei as the standout performer overnight with Hong Kong’s Hang Seng in the red on China worries and Australia’s ASX around breakeven.

In focus today we have UK Retail Sales seen improving in August, although ex-Autos is expected to have slowed along with CBI Trends Orders. In the afternoon, US Jobless Claims are forecast slightly better than last week although US Housing Starts and Building Permits may have dropped in August, along with the Philly Fed Business Outlook. Note Fed Chair Yellen speaks again this afternoon.

Ahead of Scotland’s Independence vote today (result should be known overnight/Friday morning), the latest polls suggest the ‘No camp’ retaining the lead, albeit a very slim one.

As expected, the UK 100 was unable to breakout of its September downtrend yesterday, despite jitters about a hawkish Fed policy update proving unfounded. A bullish signal comes from yesterday’s low being well above the priors and the index back knocking at 6800 ahead of the result of the Scottish referendum. Will the nation break away or not, and will the UK Index breakout or breakdown?

In commodities, Gold has taken another dive to $1217/oz, its lowest since January, after the US Fed increased its interest rate projections, spurring USD gains which made the safehaven more expensive, although further declines could lead to emerging market demand from the likes of China/India.

Industrial Metals have suffered on the back of the stronger USD and weak China property price data, although the Aussie government sees Iron Ore stabilising as suppliers down-under increase capacity further.

In Oil, US Light Crude fell back for a second day from its recent recovery to $95/barrel as US stockpiles increased for the first time in 5 weeks. Its cousin Brent also dropped back from its attempt to regain $100/barrel after the run of weak Chinese data begged questions about global economic growth.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.