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

UK 100 Index called to open +30pts at 6425, having successfully broken above 6400, putting an end to 6-month falling highs resistance and meaning potential for recovery to Oct highs 6490 and Jun falling highs 6500. The breakout keeps the Sept uptrend alive but 6500 needs bettering before we can revisit the 6600-6800 levels last traded Jul/Aug. Watch levels: Bullish 6440, Bearish 6390.

The positive open for equities comes after a largely positive session in Asia as investors interpreted a very weak US manufacturing print as holding the Fed to a very slow and gradual pace of further hikes, supported by mixed Fed chat overnight ahead of Friday’s jobs report. Worries that after all the hype the ECB policy/stimulus update could disappoint have also receded allowing European bourses to maintain their northerly climb.

Chinese stocks rallied but not without more volatility as investors looked to cashed out of small caps to have cash for IPO resumptions. Japan’s Nikkei is the regional underperformer as investors weighed up the weak US manufacturing and the impact of a USD pullback on Japanese exporters via a stronger JPY. Australia's ASX hindered by the oil price and metals coming back under pressure as well as a strong AUD following better than expected GDP read.

In focus today we have Eurozone inflation seen showing the need for more ECB stimulus  while US ADP employment could well vindicate a Fed rate hike. Lots of Fed speakers (including Fed chair Yellen) today to keep us on our toes after that poor US manufacturing print as well as the US Beige Book economic assessment in the evening.

US stocks gained over the course of Tuesday with a welcome breakout above technical resistance allowing a test of 17900 this morning, and despite a hiccup around a disappointing ISM Manufacturing print (into contraction territory). The Fed was on the wires again yesterday ahead of Janet Yellen’s two appearances today with nothing of great note to change the outlook for US interest rates. Rhetoric still largely rate rise positive, accompanied by the usual counter arguments (inflation...) that simply allow for the US central bank to keep its options open.

For the UK Index reshuffle, based on yesterday’s closing process it looks like (to be confirmed) it’s goodbye to Morrison (MRW) and Meggitt (MGGT) from the top-tier UK 100 Index and hello Provident Financial (PFG) and DCC (DCC), however G4S (GFS) is likely to drop out at the expense of newly IPOd and UK 100 worthy Worldpay (WPG).

Crude oil futures inched lower overnight after API data indicated another rise in US stockpiles - that likely to be confirmed today by official IEA figures - and led to some position squaring by energy traders.

Gold higher than it was at yesterday’s European close. Being right at the apex of a narrowing pattern, there’s little on the cards this morning save a breakout for the yellow metal. Note the US Dollar Basket trending up strongly again overnight which could give some indication as to where next for gold, while the medium term outlook remains bearish given Friday’s US jobs report which would have to seriously disappoint in order to put a Dec Fed rate hike in jeopardy.

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.

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

• Brewin Dolphin FY adjusted pretax profit up 7%
• Majority shareholder sells 13% of UK insurer Saga
• Telford Homes says H1 pretax profit at £21m
• Londonmetric Property sells retail asset for £13.6m
• Better Capital fund sells interests in Santia Holdco Ltd
• Vodafone extends partnership with Swisscom for four years
• Numis Corporation's FY revenue rises 6% to £98m
• Software firm Sage sees no slowdown in growth this year
• Amec Foster Wheeler says to partner with UK Power Networks
• Greene King's Half Year Earnings Boosted by Spirit Pub Acquisition