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

UK 100 Index called to open -15pts at 6400, still in its recovery uptrend from end-September and flat around 6400 since Friday’s sell-off from 6450 where it encountered a hurdle in the 50% Fibonacci retrace of the Apr-Aug decline. However we note two sets of rising support 6350-6400 from 29 Sept and 1 Oct which could give the index impetus and keep the current 10% recovery rolling north towards June falling highs at 6600. Unchanged watch levels: Bullish 6460, Bearish 6350.

The negative opening call, in contrast a positive European open, comes in the wake of the index’s best weekly advance since January and despite gains in the US and Asia (tech and industrial leading). Note China stocks continuing to play catch-up, rallying to a 7-week high on hopes of more government stimulus to counter waning growth and PBOC comments of 7% 2015 GDP growth and an equity  stock market correction overdone. 

Gains in Asia are on the back of a positive US finish (S&P best week of 2015) as Fed minutes were slowly digested and despite weekend Fed talk (Fischer) of potential for a rate rise by year-end while central bank peers at the IMF Peru meeting urged the Fed to get on with it and hike. In contrast ECB President Draghi emphasised 65% of his €1.1bn QE programme safety net left to run and sees it working better than expected while the BoJ’s Kuroda hinted October stimulus unlikely.

On the corporate front, note Glencore (GLEN) share suspended in Hong Kong pending an announcement about asset sales in Australia and Chile, which could go towards debt reduction that would improve the company’s footing. In the world of IPOs, Ferrari has priced its listing at $48-52/share valuing it around $10bn, ahead of an October 20 New York debut. And in M&A, we could get another raised bid from AB Inbev (BUD) for SABMiller (SAB) before Wednesday’s deadline.

In focus today we have a very light macro data line-up on account of holidays in the US (Columbus Day), Japan (Health-Sports Day) and Canada (Thanksgiving Day), however we do have EU Foreign Ministers meeting to discuss aid for refugee camps and border strengthening while Fed speakers are sure to keep us on our toes (Lockhart, Evans, Brainard). Note this week sees the US banks enter earnings season, with potential knock-on to UK and Europe.

Oil sees US Crude trade above September highs while Brent sits just below, but both out from 6-week sideways patterns on supply disruption fears coupled with a weak USD making the black stuff cheaper and another US rig count  drop suggesting US production adjusting to lower prices.

Gold continues to push out and away from the long-term downtrend since February, edging towards August highs of $1170 helped USD weakness (below 95.0 and breached 6-week rising lows). Revival of interest comes down to reduced Fed rate rise expectations and safehaven demand from lower pricing levels.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.

• Carillion wins new business worth £1.7bn since half year
• Georgia Healthcare to raise $100m of primary proceeds via London IPO
• PureCircle says to be granted patent for Reb M in beverages
• Tethys says remains in default of obligations in Tajik asset deal
• Eurasia Drilling shareholders revise buyout price to $11.75/shr
• Avation Plc says delivers second ATR 72 – 600 aircraft to Flybe
• Glencore says to sell some Australia, Chile copper mines
• Lamprell promotes O'Connell to the role of COO
• Plus500 reiterates FY revenue and profit guidance
• Jupiter Fund Management assets up 5 pct in nine months
• Grafton chairman of audit and risk committee to step down
• SABMiller's 4th largest investor rejects AB InBev offer