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

UK 100 Index called to open +25pts at 6365 after an overnight rally extended the breakout from a 4-day down channel and saw the 6400 level tested. We note potential for gains of the last 24hrs to be the beginnings of a second leg of the recent strong rebound from September lows. The 4-day down channel could well have served as a mid-way pause-for-breath consolidation before resumption of the northerly march. Towards 6600/7000? Updated watch levels: Bullish 6410, Bearish 6310.

The risk-on opening call for Europe comes after Asian bourses rose for a second day, taking a positive lead from a strong European and Wall Street finish and heading for their longest positive run since April. This remains driven by weak/mixed macro data from China, US and Europe delaying expectations for a Fed rate hike and high hopes of additional global stimulus to bolster growth which is considered positive for risk appetite.

Refreshing to see a bullish appetite on a Friday, especially with China Q3 GDP looming large on Monday morning. How fast will the world’s #2 economy have grown? Enough to hit full-year target? Can official statistics be trusted? China stocks extending rally to 2-month high on speculation of more government stimulus and reforms of state owned corporates to maintain growth. Equities in Japan rising, helped by the USD/JPY bouncing to the benefit of Nikkei exporters.

US stocks hit 8-week highs after better than expected Citigroup (C) Q3 results helped the banks sector stage a rebound, especially after an uncharacteristically weak report from Goldman Sachs (GS), while biotech continued to recover from the Tuesday sell-off. Oil services giant Schlumberger (SCL) Q3 results showed a 48% plunge in profits which beat consensus but offered a gloomy outlook. Note the Fed's Dudley adding a caveat to his hawkish 2015 hike stance, noting the weak/mixed incoming data of late, while Mester maintained the US can handle a hike and delaying too long could risk needing to raise too fast later.

In focus today we have the final reading for Eurozone Consumer Price inflation data which is expected unchanged at -0.1% headline and 0.9% core. In the afternoon, US Industrial Production expected to have remained weak in September, although improved from August, while US Consumer Sentiment is seen ticking higher.  The US Baker Hughes Rig count update is sure to have an impact on the Oil price. Note Q3 results from US industrial heavyweights General Electric (GE) and Honeywell (HON) out today.

Gold back from its $1190 3 ½ month highs hindered by a stronger USD making the safehaven more expensive and some profit taking following the recent strong run to erase 2015 losses. A rare discount for platinum versus Gold may also have seen some bottom picking in the alternative precious metal at the expensive of the yellow metal. Prepare for renewed interest towards the end of the day should markets adopt a risk-off stance ahead of the China GDP data on Monday.

Oil bounced back above September channel highs despite a rise in US EIA Stockpiles, a stronger USD and the head of oil services giant Schlumberger (SCL) saying the outlook is ‘increasingly challenging’ and not sure we have seen the worst; recovery may not materialise until year-end. China data sure to be a driver given the importance of oil as an input commodity.

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

• FDA declines approval of AstraZeneca diabetes drug combination
• Rio Tinto lifts iron ore shipments despite China risks, draws on inventory
• British American Tobacco completes auction for Souza Cruz
• Aggreko says Das steps down as executive director
• Capital Lease says to seek shareholder consent to cancel admission on AIM
• Peertv proposes undertaking a share consolidation
• ITE Group CFO steps down
• Sherborne urges Electra to reconsider opposition to Bramson
• Huntsworth names Jones as chief financial officer