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

UK 100 called to open flat at 6588 having met support at Jul/Aug rising lows and continuing the narrowing pattern from mid-Jun. Bulls will be looking for a breakout above 20- and 50-day moving averages and on towards resistance at falling highs (hopeful at best) while bears seeing the MAs holding firm and a pullback beneath those rising lows. Watch levels: Bullish 6750, Bearish 6470

The flat opening call comes as markets checked declines following the China currency saga with some encouraging US macro data and progress in Greek bailout negotiations. Poor European GDP data on Friday likely priced in already following a tumultuous Q2.

Asian stocks traded mixed overnight despite positive cues from Wall Street and easing worries about China's yuan devaluation.  The IMF said on Friday that China’s currency isn’t undervalued despite last week’s decline against the U.S. dollar, but the ailing economy still needs to adopt a fully market-based exchange-rate system within three years.

Japan's Q2 preliminary GDP contracted less than expected, beating consensus while nonetheless remaining in the red. With economic recovery in the world’s #3 economy remaining lacklustre, much talk is abounding of further stimulus measures (another ‘Arrow’) to beef up the already ‘Super’ QE programme set in play by Shinzo Abe.

In Europe, more reports of a deal in Greek bailout negotiations amid a rebellion within the ruling Syriza party and an IMF that is still calling for debt relief. German Chancellor Angela Merkel signalled willingness to consider this, keen as she is to have the IMF involved. German MPs due to vote on the deal Wednesday with approval expected.

US markets largely higher as the Philadelphia Fed survey indicated lower growth ahead, putting the chance of a September Fed rate hike below 50% and reinforcing good macro data elsewhere showing continued modest expansion in the U.S., which some investors say is enough to lift corporate profits.

In focus today we have the Eurozone trade balance at 10.00am with US empire manufacturing and NAHB housing market index this afternoon.

Friday’s Baker Hughes rig count indicated a fourth straight week of gains with more efficient horizontal rigs a major concern for market bears. While the pace slowed somewhat, a generally gloomy outlook remains planted firmly over the market as supply increases with a drop in demand from key consumer China seen as a major headwind for the price. Both US Light ($42) and Brent ($48) sitting around near those 5.5yr lows. No fresh drivers as yet.

Gold ($1119) doing all it can to escape consolidation into a falling channel after last week’s impressive performance peaked around $1125. The yellow metal has potential to at least hold onto current levels for the next day or two as some concerns remain over China’s currency volatility, while attention will remain on the PBoC.  Gold has broken out above the ceiling a narrowing pattern, key watch level $1120.

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

• Quindell names Indro Mukerjee as new CEO
• Alent says deal scheme details being sent to its shareholders
• Ubisense H1 rev 10.4 mln stg
• Green Dragon Gas H1 rev up 8 pct
• Bovis Homes first – half pretax profit rises 9 pct
• Clarkson Plc H1 rev up 30 pct