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

UK 100 Index called to open -15pts at 6640, having broken below support at 6650 which turned resistance overnight. This maintains reversal from 6800 and it could have further to run if a bearish flag pattern completes around 6575, although overnight support around 6625 corresponds with lows of mid-June. Note falling highs from end-May and long-term support unavailable until 6475-6500. Updated Watch levels: Bullish 6665, Bearish 6615.

The call for a negative open comes after a surprise drop by the Caixin (formerly HSBC) Chinese PMI Manufacturing gauge to a 15-month low, underlining need for further policy support in a slowing economy which had been displaying signs of stabilisation. The news will also surely add pressure to an already painful commodity price/Mining equity rout with Copper having slumped to a 6yr low.

US markets closed in the red after disappointing Q2 updates from the likes of 3M and Caterpillar (latter seen as global growth barometer) which added to an already souring earnings season following poor outlooks from several tech behemoths. This despite positive US macro data including US Jobless claims at a 4-decade low with commodity price declines and strong USD weighnig heavily on sentiment.

After the US close, results updates pleased investors. Amazon (AMZN) surprised to the upside, bucking a habitual trend and sending the shares 14% higher after hours, which will help with any Nasdaq recovery, however, this has failed to offset the overnight manufacturing news from China. Progress on Greece appears to have been largely ignored.

Starbucks (SBUX) continues to defy global gloom with rising sales in US, Asia & Europe. Telco giant AT&T (T) also topped profit forecasts but revenues missed due to FX and slower subscriber growth.  Visa (V) gained 8% after hours as net profit beat consensus on payment volume growth.

Asian bourses lower overnight following Wall Street’s cues for a third consecutive session as US markets struggled to swallow more disappointing earnings reports. Emerging markets hampered by still falling commodity prices, expectations of a coming US interest rate hike and poor macro data with China’s private manufacturing PMI coming out at 48.2 – a 5^th straight contraction and 15-month low, and an example of how the Chinese stock market may not be the best place to look for clues as to the nation’s economic state of play.

Japan’s Nikkei225 (despite improvements in its own manufacturing sector), Hong Kong’s Hang Seng and the Aussie ASX all also lower with lumbering neighbour and major trading partner China’s economic woes proving contagious in the region along with continually weak global commodities. Note the Aussie Dollar now the weakest it’s been in six years.

In focus today will be Europe PMI Manufacturing and Service readings (all seen holding above 50) along with the US reading in the afternoon and solid US New Home Sales. On the results front, watch out for American Airlines (AAL), healthcare Biogen (BGN) and financial State Street (STT) with the stronger USD and outlook for the rest of the year paramount.

Oil prices near four month lows, joining commodity sector cousins in getting battered by such headwinds as the Greek debt crisis, China’s equity market meltdown, the Iranian nuclear deal, a muscular US Dollar and continuing global supply glut concerns. Brent ($55) and US Light Crude ($48) trending down since 10 July.

Gold ($1085) recovering again after completing a bearish flag pattern to overnight lows $1077, testing the ceiling of a falling channel this morning with waning momentum and a resurgent US Dollar Basket, having found support at rising lows, potentially set to take more shine off the yellow metal into the weekend.

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UK Company Headlines: (Source: Reuters/DJ Newswires/Bloomberg)

• Ladbrokes Agrees Merger With Coral Group
• Hammerson's H1 net rental income £159.5m vs £146.9m; ups dividend
• Close Brothers says full-year outlook remains unchanged
• Anglo American maintains dividend as it posts steep fall in interim earnings
• Pearson sticks to guidance after FT sale; ups dividend
• Aggreko warns annual profit to be at least 8% lower
• Quarterly sales growth accelerates at Vodafone
• Lonmin Q3 refined platinum production 241,170 ounces; cuts 6000 jobs
• Diageo confirms SEC inquiry into U.S distribution
• Glaxosmithkline malaria vaccine Mosquirix gets EMA nod
• Beazley 1H Pretax Profit Gains 4.4%, Hails U.S. Growth