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

UK 100 Index called to open +15pts at 6150 having bounced off its worst level of 6120 yesterday but hindered by 6160 resistance overnight. Still under pressure, with potentially further downside to 6100 to complete the bearish flag pattern and revisit August rising lows. Note any rebound likely to encounter resistance at the breached 6200. Watch levels: Bullish 6165, Bearish 6135.

The positive opening call comes despite further losses across the pond and in Asia which extended the commodity-led global slump in stock prices. A tease of a rebound by Oil after US API Crude inventories dropped, bringing the black stuff off fresh 6/7yr lows ahead of US EIA Oil stocks today, has helped revive some bullishness although prepare for more volatility in Oil to keep the energy and commodities sectors spicy.

Suggestions that US majors Dow Chemical and DuPont are in advanced merger talks also helped to raise sentiment overnight even if Yahoo scrapped its spin-off of Alibaba due to investor concerns about tax risks. Both were welcome reprieves from all the negatives emanating from the raw materials sector and radical utterances from US presidential candidate Donald Trump.

Asian stocks headed for 2-month lows after Chinese inflation data showed a welcome uptick in CPI but PPI holding firm with a 45th straight month of factory gate deflation which kept commodity prices, notably iron-ore, under the cosh. Japan’s Nikkei underperforming regional peers despite strong Machine Orders data with a weaker USD hurting exporters via a stronger JPY.

Australia’s ASX still feeling the pain from a mining sector rout but helped by a USD pullback and energy names by the oil bounce. Note Chinese stocks on the up with CPI data highlighting the shift to consumption- from export-led growth while the central bank PBOC fixed the Yuan reference rate at its weakest in 4 years following yesterday’s weak trade data in an effort to spur export demand and reverse PPI deflation amid a difficult economic transition.

US stocks had more losses in a volatile session yesterday, again mirroring oil price weakness and a wider commodities rout after weak Chinese data reignited global slowdown concerns. That oil plumbed new lows yesterday could see imminent bargain hunting push the price back up, which would help depressed energy stocks and could see some form of relief rally attempted. Hard to see such a rally gaining much momentum though, since profits are likely to be crystallised quickly amid a great deal of uncertainty.

In focus today, we have US Wholesale Sales & Inventories seen growing in October, but at a slower pace, while the US EIA Weekly Oil Stocks are sure to garner more attention than usual after the recent oil price rout and decision by OPEC to keep on pumpin’ like there’s no tomorrow. Which there might not be for certain nations who rely on oil for almost all of their GDP. It remains a question of market share trumping price. After the ECB disappointment (or was it just an entree before a bigger main course?) listen out for what Nowotny and Hansson have to say.

Crude prices are off their lows, evidence that bottom pickers are indeed on the prowl while a down trending Dollar basket from its highs is also helping make the commodity cheaper. Note that while preliminary data overnight (API) showed a fall in US stockpiles, the supply/demand surplus still sits at around 500,000 barrels per day with little change expected given OPEC’s current stance. Watch out for US EIA data this afternoon

Gold has also benefitted from a pullback in the USD, though that’s likely to be all that’s pushing the price up. We could see continued gains up until the Fed hikes rates next week, since such a move is more or less priced into the Dollar, but the FOMC announcement itself (being confirmation) is likely to send Gold south again.

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

• Devro appoints Rutger Helbing as group finance director
• Share to buy up to 3,000 nominee share dealing accounts from Barclays
• Euromoney names Christopher Fordham as MD corporate development
• Tullow Oil says executive director Graham Martin to retire
• Entertainment One says trading in line with FY underlying earnings expectations
• Petra says receives $10m from sale of pink diamond
• Pennon appoints Loughlin as first group CEO
• Sophos to Make Payment to Fortinet After Signing Litigation Settlement
• Carillion announces new business worth around  £1bn
• Ashtead Group Anticipates FY Result Ahead Of Previous Views
• Vectura Group Commencement of first QVM149 Phase III trial