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

UK 100 called to open -20pts at 6675 with a breakdown out of July's Bearish rising wedge pattern and move below the key 6700 level that's been eyed by the bears since last week. 6665 curently serving as support for bulls, though we note the index looking toppy for some days now with a divergent RSI on the shorter term chart. Updated watch levels: Bullish 6710, Bearish 6655. 

A negative opening call comes on the back of a lacklustre session in Asia pacific Asian session in which the Bank of Australia cut its interest rate to a record low - as many had expected it would. Finally, a central bank has done something markets actually expected! Of course, this should have been a positive for equity markets yet the ASX perhaps fell victim to the mood in Japan as markets there await the announcement of a stimulus package from the Bank of Japan with perhaps less than a good dose of trust.

US stocks closed mixed, with the S&P and Dow weighed down by a similarly directed oil price with that market continuing to suffer from excess global production. The tech-led Nasdaq was positive. Other drivers were few yesterday but markets may well once more begin to price out a US rate hike following what looks to have been a correction in the recent trend of good economic data.

Crude prices have managed to pop back up above $40, but markets remain concerned about the imbalance between supply and demand driven largely by Americans doing less, well, driving this summer. With US production up, another two rigs online last week and the aforementioned dearth of consumption, the pressure should not ease any time soon.

Gold remains supported around $1308 with further upside possible now that a US rate hike looks less likely - that after a disappointing GDP estimate last Friday (as I always say...just and estimate). The next major resistance looks to be up around $1400, but don't expect a smooth ride to get there!

In Focus today we’ve got the UK’s construction PMI for July, of note given yesterday’s miss in manufacturing and sure to seed much speculation ahead of Thursday’s BoE update.

At 10:00 it’s inflation data from the Eurozone, with the monthly print seen coming back (from an already sluggish 0.6%). The YoY reading is at least looking to go slightly less deflationary but pressure likely remains with a weakening GBP putting the blowers underneath the Euro.

In the afternoon, US personal income and spending data is looking mixed if forecasts are to be believed. Note however last Friday’s GDP miss (although just a first estimate…) could be the precursor to another disappointment here. A good run of US data looks to have petered out.

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

• AG Barr sees H1 like-for-like revenue down 2.% to £125mn
• Morgan Sindall says H1 pretax profit £15.4mn
• Rotork sees FY margins lower than 2015, warns of continued impact from weak oil prices
• Direct Line H1 pretax profit £298.5mn, -3.6% fall in H1 operating profit
• Gulf Keystone says about 82% of convertible bond – holders agree to restructuring
• BBA Aviation H1 revenue from cont ops up 15.7% to $1.02bn
• Travis Perkins says like – for – like sales in July below Q2 levels, says EU referendum hit demand
• Silver miner Fresnillo's H1 core profit jumps nearly 50%
• Meggitt says on track to meet FY forecasts
• Greggs sees year in line after H1 underlying pretax profit rises