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

UK 100 Index called to open -20pts at 6835 with overnight weakness being retraced this morning. A break above the 50-hour moving average should reignite bullish sentiment for a re-test of yesterday’s high 6865, while support at the 100-hour moving average will be eyed by bears expecting a breakdown and further declines towards 6745. Bullish 6850, Bearish 6805

The negative opening call for European equities comes amid some awkward moments for the Bank of England, whose bond buying program got off to a shaky start with pension funds not exactly champing at the bit to sell their holdings. This casts doubt on the ability of the UK central bank, and its global peers, to revive sentiment in normal people - which is what stimulus is all about at the end of the day. If markets rallied on the announcement of the stimulus package, then they can sell off again if the BoE’s ability to implement it is seen as compromised (this is a sentiment thing - it doesn’t actually have to be compromised).

Asian markets are mostly lower (Japan closed for Mountain Day), tracking the US on a fall in crude oil prices which hit global growth sentiment. With US stockpiles growing unexpectedly yesterday and reports that OPEC production has risen, many investors will expect further declines into the end of the week, and possibly a good rally into next on the mandatory ‘production freeze’ chat which nearly always gets broadcast in these situations.

Gold continues to sell off towards rising support at $1335 and is currently consolidating just below the 50-hour moving average - which is presumably more bearish than if it was doing the same just above. Technicals suggest further downside is possible while the USD Basket finds itself at the floor of its 3-month rising channel - a bounce therein potentially adding downwards pressure to the gold price.

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

• Old Mutual posts below – expected 9 pct drop in H1 operating profit
• British bank Aldermore's first – half profit jumps
• Cinema chain Cineworld Group H1 revenue grows on strong titles
• William Hill sees nothing in 888 – Rank approach to merit talks
• Coca – Cola HBC sales fall on cool weather, economic uncertainty
• L&G says Cofunds sale to boost Solvency II surplus by 125 mln stg
• Glencore H1 zinc output down 31 percent as tightens market
• TUI lowers sales forecast on geopolitical tensions, confirms full – year goal as customers shift holiday destinations
• Steinhoff raises offer for Poundland
• Hastings H1 opg profit up 20 pct; on track to meet, beat all targets
• Card Factory says on track to meet FY forecasts
• RBS prices $2.65 bln of additional tier 1 capital notes
• Vedanta Biosciences Announces Collaboration with the NYU Langone Medical Center to Develop Microbiome – Derived Immunotherapies for Cancer
• London nickel sinks on profit – taking, copper steady
• Aegon acquires Cofunds from Legal & General for 140 mln stg, Q2 earnings miss on higher U.S. claims
• Oil prices fall on U.S. crude inventory build, record Saudi output