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

UK 100 Index called to open +85pts at 6145, with the reversal from Monday’s lows making further progress overnight within a new rising channel to test highs of 6150, taking the rebound to 4.7% after December’s sharp 9% sell-off. Having made it back above the recently breached 6100, the next hurdle is 6200 before we can look to early-month highs of 6450. Watch levels: Bullish 6160, Bearish 6080.

European bourses called to open with handsome gains as markets take a Fed rate hike in their stride and as a welcome end to long-running uncertainty (volatility sharply lower), even if questions remain about the pace of further hikes. While Chair Yellen envisions a slow and steady cycle of US monetary policy tightening from historical lows, and markets are pricing in just two hikes next year, committee member forecasts suggest a rather too-convenient linear one-per-quarter.

Not quite the ‘dovish hike’ markets had expected from the Fed, and a unanimous FOMC decision is at odds with the recent handful of dissenting votes. This could be genuine committee confidence, but may also have been an effort to boost credibility in central bank policy after recent ECB discord on more QE lead to the ‘Draghi disappointment’ and market sell-off. Then again, could it be that after years of crisis and extreme monetary policy we are all tainted and overly sceptical and should simply have faith in US recovery?

Asian stocks higher despite the prospect of capital outflows to a new higher-yielding US, with the USD strength benefiting Asian exporters via weaker regional currencies such as the JPY. Equity buoyancy is also in spite of renewed USD strength which sent commodities lower, Oil trading back near recent 7yr lows on a combination of currency hindrance, bigger US stockpiles (blame warm weather) and the US Crude export ban being lifted. China helped by the PBOC fixing the currency lower again after the USD rose and Australia’s ASX boosted by weaker AUD offsetting raw material related weakness.

US bourses were also buoyed by the Fed rate hike, but with a little profit taking on Wall St. futures this morning, concerns may still remain about the pace of tightening. Talk of four further 0.25% moves in 2016 smacks of the kind of machine-like hiking the Fed exhibited in the mid-2000s which is not what we would’ve expected. With that in mind, we may see more sustained Dollar strength into next year keeping the outlook for commodities uncertain at best. Surely though, as we’ve seen already this year, all pending decisions will have to be made very carefully. Trust will be key and as long as that’s evident, markets are likely to remain content.

In focus today will of course be the fallout from the Fed’s end to zero-interest rate policy (ZIRP). Data-wise though we have German IFO surveys seen unchanged in December. While UK Retail Sales may have rebounded in November (black Friday effect?) the pace of annual growth likely slowed. In the afternoon US data may take on less importance now the Fed has actually pulled the trigger, however reads on the Philadelphia Fed and Leading Indicator will be eyed due to consensus expecting a pull back by both.

US Crude stockpiles are at seasonal levels not seen for the last 80 years according to the Energy Information Administration (EIA). What do you think that means for the oil price?! Here are some clues: USD volatility overnight, potential for more sustained Dollar strength, a stubborn group of competing oil producers, unseasonably warm weather, global oversupply...

Gold has not moved as much as it could’ve - the USD didn’t spike above 100 overnight - but did engage in some volatility that, once ironed out, nonetheless saw gold resume its sideways trend beneath a canopy of falling highs. No reason to expect an imminent visit to $1000 any time soon now, but plenty of reason to expect some form of downside after last night’s decision inspired a more risk on mentality, buoying equity markets.

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

• Workspace gets planning nod to redevelop Marshgate estate
• AstraZeneca to buy 55% of cancer firm Acerta for $4.0bn
• Redde sees H1 trading profit ahead of expectations
• Avanti Communications to meet FY revenue target
• Entertainment One extends deal with Dreamworks Pictures
• National Australia Bank's chairman says Clydesdale IPO on track
• HSBC to leave prime lending rate unchanged after HK rate hike
• Soco International says CFO Anya Weaving resigns
• Premier Farnell sees oper profit at lower end of guidance range