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

UK 100 Index called to open -25pts at 6670 having found resistance at 6700 on Friday and it remaining a hurdle overnight. Last week’s supportive rising lows are just about keeping the rebound from 6500 alive, however, a breakout at is 6800 needed to overcome falling highs from end-May/early Jun and the 200-day MA if 7000 is to be revisited. Updated watch levels: Bullish 6715, Bearish 6640.

The negative opening call comes after more disappointing PMI data from China added to concerns of a deepening slowdown, although it sounds like more stimulus could be on its way for the world’s #2 economy, while commodities remain under significant pressure with oil and copper resuming their southerly trends.

US markets closed mixed on Friday amid confusion about when the Fed might raise interest rates after disappointing US Employment Cost Index data (lowest growth since 1982) which it is argued reduces the likelihood of a September hike even if the Fed’s Bullard said he was not concerned, seeing the ‘economy in good shape’.

Elsewhere, US Consumer confidence and the Chicago PMI were mixed. Stocks in Energy-related names were weak on a lower oil price and poor earnings reports from Exxon-Mobil (XON) and Chevron (CVX) while the Baker Hughes US rig count fell slightly.

Asian markets largely lower overnight with low commodity prices continuing to weigh and following declines on Wall St. amid US rate rise confusion (poor macro data, hawkish commentary from the Fed’s Bullard).

More weak manufacturing data from China (July Caixin PMI hitting a 2-year low at 47.8 while official manufacturing growth stalled in the same period, remaining at a 5-year low of 50) dampened investor sentiment further as PBoC stats director Sheng said that pressure on the Chinese economy will continue through the remainder of 2015.

Margin trading on the Chinese stock market declined to its lowest level since 17 March, compounding losses on the Shanghai Composite and leading to talk of fresh, pre-emptive stimulus measures from the government to keep the 2015 growth target within reach.

Elsewhere in Asia, Australia continued to feel the commodities bite but did post some encouraging macro data – manufacturing activity back to expansion in July while new orders and manufacturing employment recovered slightly, though both remain in contraction territory. Japan’s Nikkei is being helped up by its own PMI reading which came in at a 5 month high 51.2, remaining above the breakeven level (50) for the third consecutive month.

The Greek stock exchange is set to reopen -20% this morning (if the Global X UK Index  Greece 20 ETF is anything to go by), although with some restrictions for both domestic and foreign investors, 5-weeks after being closed following the nation’s bailout referendum. Bailout talks between Athens and Creditors continue in a ‘good climate’ with the aim to reach a deal before Aug 11 in order to be able to honour a 20 Aug €3.2bn ECB debt payment deadline.

Note HSBC (HSBA) results this morning delivering profits +10%, which beat expectations and confirmed the sale of its Brazilian business for $5.2bn. There is also talk of the Chancellor considering starting to sell down the UK’s 78% bailout stake in RBS (RBS) as early as today, although he might wait until after the summer. Note Germany’s Commerzbank (CBK) almost tripling Q2 profits.

In focus today – European Manufacturing PMIs seen confirming mixed fortunes in Europe (Germany growing, France in contraction) while US Personal Income & Spending growth is seen slowing. US PMI Manufacturing expected solid along with ISM Manufacturing.

The number of operational US oil rigs increased in July, rising once more as oil producers swallow hard and get on with drilling in the face of low prices that look set to remain so for some time. WTI (currently $46) fell 20% in July, its worst performance since October 2008 while Brent ($52) joining its US cousin in reacting in mind to global oversupply.

Gold ($1096) spiked briefly above $1100 over the weekend before pulling back to trade in a range just below that level. Fears of a return to pre-2009 sub-$1000 levels allayed somewhat for the time being but continued USD strength is expected to continue to punish the yellow metal. Support  now around $1092, resistance $1098.

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

• HSBC first – half profits up 10% on China investing frenzy
• Britain cuts Lloyds banking group stake below 14%
• BG Group starts up sixth FPSO off the coast of Brazil
• Galliford Try agrees £56mn contract to build school in Shetland
• Intertek raises dividend after H1 profit climbs
• Ultra Electronics H1 underlying pretax profit falls
• AstraZeneca, Isis Pharmaceuticals announce strategic collaboration
• Fidessa H1 revenue rises 6% to £145.9mn
• Keller sees full – year results in line with market expectations
• Zamano says received preliminary approach about possible offer
• Petroceltic to suspend formal marketing of planned bond issue
• DS Smith completes acquisition of Grupo Lantero's corrugated business
• Northgate says refinancing its debt facilities
• CRH announces completion of Lafarge – Holcim deal
• Trinity reiterates 2015 profit target despite print ad slump