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

UK 100 Index called to open +10pts at 6375, still holding in the middle of a bullish ascending triangle pattern, a breakout from which could usher us towards 6700. Sideways activity around 6400 maintains the pause following the strong run end-September. While overnight lows sustain rising support for November, beware falling highs since Wednesday. As always, if you take a long look at the short-term, make sure you take at least a quick look at the long-term. Watch levels: Bullish 6405, Bearish 6350.

The positive opening call comes after further gains in Asia, despite small stateside losses, as the strong USD that hindered Q3 corporate results edged further towards August highs thanks to hawkish Fed talk and expectations of a decent US Jobs report. This benefited Asian currencies and exporters in turn, while Chinese stocks pushed further into bull market territory on assumptions of further intervention to bolster growth.

US bourses tracked lower on waning volume ahead of today’s Non-Farm Payrolls report. Fed chatter graced the wires as is usual at times like this - Lockhart saying that the last policy statement was deliberately trying to convince investors of a possible December rate hike. To be clear then, the Fed definitely might raise interest rates in December… He added that the final decision will be….wait for it……Data driven, pushing his view that the case for tighter policy will only strengthen before the Fed's December meeting.

In focus today: UK Industrial and Manufacturing Production seen delivering divergent views with the former dropping and latter improving in September. At odds with resilient views of BoE yesterday? A UK rate hike seems a long way off now. Well after the Fed, which we are not convinced can move itself by year-end.

Thereafter it’s all about the US Jobs report and what it could mean for a US rate rise. We still feel that the headline number is by-the-by and more important is wages growth and participation and indeed absent inflation. Note after all the hawkish Fed speakers of the last few days, it’s the turn of several likely dovish ECB members. 

In other news about meetings in December, a senior OPEC delegate said the cartel is unlikely to cut output if non-OPEC countries don’t get on board with such action. There’s no indication whatsoever that anyone is up for trying to support oil prices by managing supply with both Russian and Saudi output now above 10mn barrels a day.

Gold still under pressure in the $1100-$1110 region ahead of the US jobs report. If it’s up, the dollar will strengthen and ramp up the pressure on the yellow metal. If down, however, a drop in economic confidence, dollar weakness and potential (risk-on) equity market rally leaves the outlook for gold less certain (ironic given that gold is seen as a hedge against uncertainty…).

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

• AstraZeneca agrees to buy ZS Pharma for $2.7 billion
• Inmarsat's third – quarter earnings rise 8.6%
• Capita says acquired aggregate 9.99% stake in Xchanging
• British Airways – owner IAG upgrades long – term guidance
• Tullett Prebon to reduce headcount by 5% in interdealer product area