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

UK 100 Index called to open -35pts at 6140, with an overnight retreat from what were solid gains yesterday. Overnight losses stemmed thanks to support at yesterday’s 6140 lows. The Bulls were happy with another test of 6200 yesterday, ever hopeful of a breakout to extend the Feb rally. The Bears, however, maintain focus on the 200-day moving average at 6185 which we have tested multiple times since the beginning of the month but have yet to close above. Watch levels: Bullish 6165, Bearish 6120.

The negative opening call comes as Asian equities lose ground after the Bank of Japan (BoJ) policy update. As expected we had no policy change but markets appear disappointed with the lack of extra stimulus, especially given the bank’s more downbeat economic assessment. . It also comes despite some geopolitical positives with Russia signalling willingness to pull out of Syria.

A backtracking in commodities prices, notably oil, is also weighing on sentiment as investors prepare for tomorrow's US Federal Reserve (Fed) policy update and its potentially widespread market impact. As with the BoJ no change is expected but its updated view of the economy and markets will be critical.

Japan’s Nikkei in the red after the BoJ update and with a slightly stronger Yen hurting exporters. Australia’s ASX held back by commodities price weakness and the Reserve Bank of Australia’s (RBA) latest minutes highlighting much debate about the impact from a more slowly growing China. Note Chinese stocks easily outperforming, with gains, despite commodity price falls and a planned tax on foreign exchange transactions.

US bourses had a  mixed Monday as the oil price fell on dashed hopes of a production freeze. With the Fed FOMC meeting today and tomorrow, traders and investors are unlikely to jump on the big US data dump that’s also due today - unless we get some big surprises either way.

In focus today we have French Consumer Price Inflation which is seen still in deflation on an annual basis, vindicating ECB President Draghi’s stimulus bazooka last week to help the struggling Eurozone region. Thereafter it’s all about the US with Retail Sales seen dipping in February, although the core reading may post a small gain. Headline US Producer Price Inflation probably struggled again in Feb but the core reading may actually rebound nicely, while Empire State Manufacturing improves (still negative), NAHB Housing Market Index  ticks up and Business Inventories stay flat.

Crude prices are continuing south this morning with Brent breaching $39 and WTI $36.5 as oil’s momentum trades unwind (the rally was never really based on fundamentals), with Iran refusing to take part in a production freeze until it’s ramped up its output (“come back when we’re pumping 4m barrels a day”). If everyone else cuts now, all they’ll be doing is handing market share to Iran. Since the reason oil prices have tanked so much is to do with market share, it looks like there will be no production cuts any time soon.

Gold has come back to early March levels around $1225 after dropping out of its Feb rising channel. Potentially in consolidation ahead of another leg down. With ETF holdings in the yellow metal at an 18-month high, it could be time for a bit of profit taking as US data improves and the USD firms up.

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

• Antofagasta cancels final dividend as profit falls by 58 pct
• Antofagasta FY pretax profit falls 82.9 percent to $259.4 mln
• Evraz says Olga Pokrovskaya and Duncan Baxter step down from board
• Britain's Balfour expects to restart dividend from half year
• Dechra Pharmaceuticals buys Putney Inc for $200 mln
• Oil prices fall as oversupply lingers, economic slowdown looms
• Charles Taylor says transfer of Cardrow's insurance unit effective
• Copper slips as dollar holds gains ahead of Fed meeting
• Legal & General 2015 operating profit up 14 pct to $2.1 bln
• Cairn Energy raises resource estimate at Senegal oilfield
• Ocado sales higher, no update on Morrisons deal
• French Connection appoints Lee Williams as finance director
• Hastings Group says FY oper profit up 19 pct
• Russia's Evraz says 2015 net loss narrows to $719 mln
• UK's Sainsbury's reports first quarterly sales growth in 2 years