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

UK 100 Index called to open -10pts at 6175, still bang in the middle of its 1-month shallow rising 6140-6240 channel, having traded in narrowing range overnight. Longer-term, the index continues its fight to decisively overcome 9-month falling highs around 6200. While bears remain hopeful of a retrace, sentiment among bulls is bolstered by four successive closes above the key 200-day moving average. Watch levels: Bullish 6200, Bearish 6170.

The negative opening call comes after a largely negative Asian session despite modest gains on Wall Street and oil prices holding up near highs (Brent above $41/barrel). Investors would appear to be erring on the side of caution in the wake of mixed signals from Fed officials as well as some disappointing overnight data. Could the current calm be a red flag signal before another storm? Note an explosion at Brussels airport within the last 30 minutes has knocked sentiment.

Japan’s Nikkei positive as it plays catch-up following a public holiday and on the back of some welcome Yen weakness benefiting exporter equities. However, regional sentiment has been dented by Japanese PMI Manufacturing which fell below the key 50 level that separates growth from contraction for the first time in 10 months.

China underperforming, putting an end to a its recent winning streak and stimulus hopes-led recovery, after suggestions from Oxford Economics that China’s industrial profit margins are set to remain under pressure due to overcapacity and an ailing state sector.

Australia’s ASX in the red as commodities remain under pressure and despite positive house price data and comments from the Reserve Bank of Australia governor Stevens that the central bank had room to ease policy in the case of a serious economic slowdown.

US markets closed just positive yesterday and we expect them to be under a little bit of pressure today following a Fed double whammy. While not voting members of the FOMC, Williams and Lockhart see a possible rate hike in April or June given the good economic data of late and encouraging inflation signals. We’d agree that the data is ok, but it’s what’s going on elsewhere in the world that’s likely to put the brakes on if the Fed decides to pay attention to it. Of course, it may decide not to.

The USD has reacted to this, helping Japanese equities but hindering commodities while a slew of manufacturing data prints expected today will give investors a taste of how global growth is coming along.

Corporates wise, Apple (AAPL) released a new, smaller  iPhone to try to address expectations of slowing demand for big, flashy and expensive smartphones. Meanwhile, the FBI has said it might not need AAPL’s help to hack into the San Bernardino killer’s handset.

In focus today we have Eurozone PMI Manufacturing and Services readings seen mixed, with France holding around breakeven, Germany in a stronger position (Services strong, Manufacturing OK) but the region doing just fine. German IFO surveys are expected largely unchanged, although its ZEW surveys may have improved while UK Inflation data may have rebounded. 

In the afternoon, US PMI Manufacturing is seen edging up along with the Richmond Fed recovering to breakeven. After yesterday's mixed Fed signals, note the Fed’s Evans speaking again today and Harker late tonight.

Brent and US Light Crude remain in their uptrends from January lows, paring yesterday’s losses after more chat about production freezes. This time someone from OPEC or somewhere has said Iran may participate in a freeze at a later date, which doesn’t mean ‘Iran says it will participate in a production freeze’ and does nothing to address current oversupply issues. Nonetheless, oil prices have of course gone up with both markers bedding in above $40 this morning. #getsemeverytime

Gold is breaking through 3 day falling highs on reports of a possible terror attack at Brussels Airport. Markets are likely to move as more details emerge and that will include safe-havens. This could send Gold into the upper half of a March sideways range even if fellow port in a storm the USD also strengthens.

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

• Russia's Etalon says 2015 net profit falls to 5.4 bln roubles
• Oil futures extend gains on falling U.S. crude stocks
• Genel Energy gets $12.6 m for KRI oil exports from Taq Taq field
• IG Group Q3 revenue +18% as volatile markets boost volumes
• Jimmy Choo says sees significant growth opportunities in Asia, Japan
• Anglo American completes bond buybacks
• 888 Holdings says Q1 avg daily revenue +20%
• Thomas Cook says bookings lower on uncertain environment
• Johnston Press says FY adj pretax profit +22.6%
• Wolseley sees trading profit in line with forecasts
• Majestic Wine hits 100 mln stg sales for Naked Wines
• Bellway sees higher completions, improving full – year margins