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

UK 100 Index called to open +30pts at 5570, after retreating from a second failed attempt to break back above 5600, the accelerated February downtrend again proving too much to overcome following yesterday’s early breakdown to 3.5yr lows. Bulls hoping for rising lows from 5500 to help deliver a better challenge of the downtrend while bears eyeing potential for continued downside towards 5440, even 5200. Watch levels: Bullish 5640, Bearish 5535.

The positive opening call comes despite continued weakness in the US and Asia and a deepening of the global bear market. This after Japanese stocks woke up on the wrong side of the Yen (shares -5%) to play catch up following a public holiday, reacting to domestic currency strength and anxiety about the banking sector (bad loans, negative rates, China slowdown, US recession, commodity depression) and central banks' ability to ride to the rescue, again.

A strong bounce by US Crude is helping sentiment, even if a 1-week downtrend remains a significant hurdle, along with JPMorgan Chase CEO Jamie Dimon putting his money where his mouth is and spending $26m of his hard-earned cash on shares in the bank in a show of confidence on the troubled sector, which sees good news from Commerzbank swinging to a bigger than forecast profit this morning.

US bourses closed in the red (or was it the gold?) yesterday, while we note Dow Jones futures as yet undecided on where they’re headed this morning. With Janet yellen back on the griddle for a second day, sticking to her guns while using the type of language we really hoped she wouldn’t, investors saw more of the signals they needed to exit equity markets and pile into safe havens like gold and the Yen. Note that, with Yen strength compounded by the unwinding of carry trades, we’d expect pressure on the USD to ease slightly as that tapers off. A dovish overtone remains, nonetheless.

Note also markets receiving a weak lifeline in the form of more ‘market-manipulating,’ throw-away comments, this time from the UAE oil minister about cutting oil supply. Said lifeline going on to look somewhat frayed.

In focus today we have Eurozone Industrial Production seen bouncing back in December but GDP unchanged in Q4. In the afternoon, US Retail Sales and Business Inventories should have returned positive even if growth was likely tepid at best and Import Price deflation probably intensified in Jan, while a good or bad Uni of Michigan Sentiment read could decide sentiment into the the week-end.

Oil watchers will be looking to the Baker Hughes Rig Count for signs of further reductions in US activity and a potential turning point in the global supply glut, given the inability or rather lack of desire by OPEC and Russia to make a move and risk losing market sure should the price recover.

Brent remains range-bound this morning after late volatility on Thursday - emanating from more of those crude output cut comments which affected both the UK and US markets. Note 4 Feb falling highs failing to be fooled in either case. Interestingly, the tone from OPEC (and surrounding area) seems to have moved towards ‘not increasing output’ rather than cutting it.

Gold has stopped for lunch and a quick siesta, having sunk into the soft, memory foam mattress that is $1240. Watch out for another risk-off Friday on unchanged fundamentals (safehaven, weak USD).

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

• Segro confirms in talks with Roxhill over logistics development
• Cairn Homes and Hines Ireland ink housing deal for Cherrywood
• Nationwide Building Society says underlying profit +15% in 9 mths to Dec. 31
• Developer Countryside's London IPO priced at 225p - lower end of range
• Monitise H1 revenue £33.4m versus £42.4m
• Hammerson, CPPIB sign JV over Grand Central shopping centre
• APR Energy says all resolutions at EGM passed
• Rolls-Royce sticks to 2016 guidance, halves dividend
• Premier Oil says terminated contract with Ocean Rig UDW
• Oxford Instruments names Gavin Hill as finance director
• Europa Oil & Gas Award of New Offshore Ireland Licensing Option
• GlaxoSmithKline Fined £37.61M for Paying off Competitors