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

UK 100 called to open -10pts at 6690, having traded sideways 6675-6690 overnight after breaking back below 6700 late yesterday. July rising lows may no longer be valid now but we note a rising channel from early May (albeit with a June Brexit interruption) with a floor around 6655 that could stem declines, pleasing Bulls still eyeing a break above 6750. As for Bears, they are watching for any breach of 6675 overnight lows, but may need to see 6600 give way before getting too excited about a proper reversal, as the index remains sideways 6600-6740 since 8 July, potentially still consolidating its gains since late June. Watch levels: Bullish 6705, Bearish 6670.

A weak opening call comes after US bourses closed in the red and Asian equities followed them lower as investors struggled to hold onto positive sentiment in the last session of the weak. A strong Yen hurting Japanese Nikkei exporters was to be expected after the currency gained 1% yesterday with hopes of helicopter money being dashed, although hopes of more stimulus at month end remain very much alive. And with the ECB now expected to move in September, that would make it a hat-trick for Q3 with the BoE seen moving in August.

While Japanese PMI Manufacturing continues to rebound, a fifth month of contraction hasn’t helped sentiment. Further declines in the price of Iron Ore, Copper unable to break above $5500 and Oil prices back around July lows are also holding back the Commodities and Energy space downunder, so beware the reaction of London-listed Miners and Oilies this morning.

US bourses closed in the red with the Dow snapping a 9-session winning run, weighed on by Goldman Sachs shares post earnings and with oil prices back on the back foot. Note also volumes pulling back ahead of next week’s Fed meetup. Note shares in McDonald’s helped temper declines with investors frothing at the mouth at the thought of being able to design their own burgers online.

US earnings continued to broadly impress - thus far we’ve had Qualcomm, General Motors, eBay, Biogen and notable banking stocks Morgan Stanley, Goldman Sachs, Citi, JP Morgan and Bank of America all top expectations - low expectations mind - leading strategists to proclaim a strong economic recovery.

Crude prices back on the back foot this morning - just as oilfield services firms Halliburton and Schlumberger call the bottom for oil (dangit!). Markets are still focussed on a build in US gasoline stocks which indicates waning demand, even though falling crude inventories should balance this out in due course.

A failed 3-week bearish head and shoulders top on Gold should please bulls looking for a risk off afternoon, with the US Fed due to meet next week. Bears will see technicals coming back from overbought / near-overbought conditions to engineer another breakdown and more declines through $1320. Note the USD basket is engaging in buyers’ remorse having broken out of its 3-week bullish ascending triangle pattern, and could see more upside in the coming days.

Today’s focus will be July preliminary PMI manufacturing and Services data from both Europe and the US. France is seen continuing to struggle for growth, Germany will likely prove just fine, helping buoy the Eurozone as a whole, playing into the ECB’s wait-and-see decision yesterday on stimulus. A solid read for Eurozone could help buoy the DAX, while the CAC may suffer

The UK however, is almost certain to see a negative impact in its PMI numbers with it being the first piece of major macro-economic data suggesting slowdown and dented sentiment since the June Brexit referendum vote. While this may weigh on the international UK 100 the could well suffer more on account of it being more UK focused.

With US data continuing to prove solid, almost supporting the case for an immediate US Fed rate rise if it weren’t facing myriad global headwinds (Brexit, China, Geopolitical risk), the stateside PMI print for Manufacturing is seen edging higher this month. With an absence of other US data, could this help propel US bourses back to their recent all-time highs, making for a bullish end to the week.

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

• Beazley First Half Pretax Profit Falls
• Sainsbury, Home Retail Gets Merger OK from Competition Regulator
• Kibo Mining Reaches Deal With Acacia Mining to Take Over Two Gold Projects
• Alliance Trust Half Year NAV Per Share Rises to 591.4 Pence
• Acacia Mining Profit Jumps; Declares Higher Dividend on Outlook
• Vodafone Says Europe is Stable as Sales Grow 2.2% organic
• EasyJet Profit to Tumble, Says Goodbody -- Market Talk