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

UK 100 Index called to open flat at 6745, still struggling to break beyond 6760 due to hurdles in falling highs from June 4 and the 200-day MA (6772). However, pullbacks have failed to scupper uptrend from July 27 lows 6500, keeping rebound alive and maintaining chance that a far-from-perfect bullish inverse Head & Shoulders pattern sees index break higher. Updated watch levels: Bullish 6775, Bearish 6695.

The flat opening call comes despite a decent Asian session offsetting US weakness as markets prepare cautiously for a solid US Non-Farm Payrolls figure which could cement prospects of the US Fed moving to raise rates from historic lows next month after Jobless Claims fell to a 4-decade low and despite Wednesday’s ADP data disappointing.

Jitters over Chinese and indeed global growth persist while we await a Greek bailout deal with Germany suggesting more time needed and another bridging loan needed to tide Greece over. Note Greek Banks bouncing yesterday after a tough resumption to trading this week and PM Tsipras and French President Hollande agreeing a deal could and should be made after Aug 15.

Asian stocks mostly higher overnight despite a negative lead from Wall Street with traditional caution dominating ahead of US Non-Farm Payrolls data which could be a driver for increased speculation on the outlook for US Federal Reserve and whether the Fed hikes rates in September.

Japan’s Nikkei higher buoyed by a weaker JPY and telecoms sector following strong earnings while the Bank of Japan (BoJ) kept expansive policy unchanged with no changes to growth or inflation expectations, still expecting moderate recovery.

Australia’s ASX in the red, headed towards July 9 lows after banks dropped on ANZ’s cash call, commodities prices remain weak, Home Loans didn’t rebound as much and despite the Royal bank of Australia (RBA) delivering a more upbeat assessment of the economy down under but accommodative policy still appropriate and reasonable chance AUD weakens when Fed hikes.

Chinese stocks higher on reports that China Securities Corp seeking seeking CNY 5tn more  to prop up the equities market.

US markets slumped by their most in a fortnight, with the Nasdaq underperforming due to Media sector earnings disappointments, softness in Apple, and a sell-off in Crude Oil prices to a fresh 4-month low which dampened inflation concerns and expectations of a September Fed rate rise even if big bets were thin on the ground ahead of today’s US Jobs report.

The focus today will be dominated by the US Jobs report and whether it will be strong enough to maintain the Fed’s assessment of ‘solid growth’ in the Labour market and drive it to raise rates in September despite inflation (the other half of its dual mandate) remaining sub-target.

Oil prices plumbed fresh multi-month lows (although bounced overnight on US Senate opposition of Iranian Nuclear deal) on continued worries about the global supply/Demand dynamic for the black stuff with supply still rising, and potentially set to rise further with Iran returning to the fray if sanctions are lifted, even if US data showed another bigger-than-expected weekly stockpile drawdown. US Light back to $45 and Brent back >$50, but only just hanging on.

Gold moving in to the apex of 3-week narrowing pattern around $1088, continuing to test to the upside but with no avail. Watch for a breakout/breakdown around the 1.30pm US Jobs report as the USD could be very be volatile.

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

• William Hill H1 operating profit -1%
• Bellway completes 13.2% more homes, margin +300ps
• Dialight to cut 12% of its total workforce
• Allied Irish near trebles H1 pre – tax profit to €1.2bn
• Allianz Q2 results beat expectations