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

UK 100 Index called to open +10pts at 6620, having made new highs overnight, after 6600 support confirmed yesterday following persistent testing, keeping the uptrend from mid-October lows alive. Potential for another upwards shift in sideways activity. September highs 6900 still feasible, but still in narrowing (rising wedge) pattern. Our watch levels: bullish 6650 and bearish 6595

The positive opening call stems from China data overnight (Retail Sales, Industrial Output) confirming the nation’s slowdown continuing into Q4, but which only goes to stoke the fires of market hope that more stimulus will be forthcoming buoying risk appetite. Note Dow Jones futures making a new record high.

US equities finished mixed after a weak European session, where banks were hurt by the FX rigging probe and rising tensions in Ukraine, with NATO saying columns of Russian military/troops were seen entering the country. Data-wise, there was only US Wholesale Sales and Inventories, beating expectations for September.

The Fed’s Kocherlakota (dissented at last meeting) reiterated his belief that said rising rates in 2015 would be a mistake with inflation unlikely to hit 2% until 2018. He speaks again this afternoon along with Plosser and Fed Chair Yellen.

While ECB President Draghi affirmed commitment to expanding the balance sheet and taking more unconventional measures, note ECB/Bundesbank’s Jens Weidman saying despite low risk of deflation, price growth to stay sub-target for sustained period with accommodative policy appropriate, along with discussion of additional measures.

Asian markets mixed, with Japan’s Nikkei outperforming thanks to a weaker JPY on BoJ comments about QQE being open ended, election speculation and mixed data (PPI weakening, machine orders and Industrial Production strengthening). Note Australia in the red despite stimulus-positive China data with comments from RBA that growth below trend until pick-up in 2016 on falling mining investment and fiscal tightening.

Oil remains in focus with the Saudi Oil Minister saying he wants stable markets/prices but sees no price war, but provided no hints as to 27 Nov changes in policy (output cut?) after 30% price plunge to $80, doing its best with fellow OPEC members to ensure stability. The US EIA lowered its expectations for 2015 oil/gas prices based on a weakening outlook for global economics and oil demand growth. US inventories are released this afternoon. Another build to support EIA view and recent price falls?

In focus today, after Germany highlighted the region’s deflationary woes with CPI confirmed negative will be updates from France, Spain and Italy. Thereafter it’s quiet until US Jobless Claims (seen flat) and the latest US Crude Oil inventories which could be a driver for the price of the black stuff later in the day. With Fed speakers so influential, note Plosser, Yellen and Kocherlakota speaking after the European close.

In commodities, Gold back around $1160, off its $1140 lows, but unable to retest  its $1180 highs of late as USD strength limits interest while equity gains dent safehaven demand while investors ponder over monetary policy the world over.

Oil remains under the cosh after China Industrial production data confirmed the nation’s slowdown moving into Q4, intensifying questions over global demand while production is rising. This afternoon, US stockpile data expected to show sixth weekly gain in US Crude adding to argument that rising supply outpacing demand. US Light Crude steady at $77/barrel (above recent lows of $76) but Brent Crude now testing $80.0/barrel.

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