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

UK 100 called to open +25pts at 6920 with Friday’s 6820 breakout from a 3-week bugbear falling channel extending to 100pts, taking the index close to its 6955 post-Brexit highs overnight. This bodes well for the breakout being the final leg of a 1-month bullish flagpole that ultimately gets the index back to last year’s all-time highs of 7135. The Bulls will be looking for any test of 6955 for signs that the current rally has legs while the Bears will be looking for the level to represent a hurdle. Updated watch levels: Bullish 6940, Bearish 6880.

A positive market open comes as Asian equities follow their stateside counterparts higher with investors interpreting Friday’s US Jobs data as being inconclusive and insufficient to convince the Fed that a US rate hike is warranted this month. Traders clearly like the idea of cheap money for longer, even if only for a few more months, as well as a positive China PMI Services figure and chat from the G20 suggesting pressure on the UK to opt for a soft-Brexit to avoid jeopardizing the strength of existing trade relations.

Japan’s Nikkei is higher in spite of a stronger Yen as the USD gave up some of its initial jobs data gains, investors pricing in a rate rise delay. Japanese Stocks higher on hopes the BoJ will indeed ease policy further if benefits outweigh costs (this month?). Strong Labour earnings data is helping offset a weak PMI Services print, thanks to welcome inflationary hints.

Australia’s ASX is outperforming thanks to the weaker USD giving a fillip to the commodities space and Miners, an Oil price bounce overnight helping Energy names. We do note, however, Copper up but Iron Ore down, offering a conflicting message.

Oil prices have staged a bounce overnight with US Crude bouncing off $44 and Brent off $46.5 (Bullish flag?) thanks to that weaker USD, positive China data and Saudi Arabia and Russia agreeing  to work together to ensure oil market stability as we move towards this month’s unofficial OPEC led production freeze meeting.

Note Gold staging its own breakout thanks to the weak USD and the prospect that continued loose monetary may lead to inflation that may actually need hedging. Either that or investors are back concerned about the strength of US economic growth not being as strong as hoped and considering the need for more of the safehaven metal.

In focus today will be the fallout from the overnight Chinese PMI Services print, of interest of course given the ‘transitioning’ status of the Chinese economy. It’s expected unchanged, but signs of decent expansion could affect the traditionally Asia-focused UK 100 stocks such as Standard Chartered, Burberry and of course those all-important Miners.

Chinese data is likely to be quickly overshadowed by the same from the UK, however, with its PMI Services print sure to garner attention from Brexiteers and Europhiles alike (it accounts for 80% of UK GDP), both teams eager to ratify their own sides of a debate that rages on. We’ve already had a few bullish surprises from the UK. Will Services growth return to growth like Manufacturing did last week? Or will it spice up the post-Brexit story.

Data from the Eurozone is expected to come in softer, with both its Services PMI and Retail Sales seen falling a tad in August. Note the G20 meeting in China which would appear to be pressuring the UK for a soft Brexit to maintain trade.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.

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

• Carillion Selected by Centrica for £90m 5-year Contract
• Vectura Product Update - Ultibro  Breezhaler
• GlaxoSmithKline Positive Results from the COPD Salford Lung Study
• Woodside to Pay BHP Billiton $250M Plus $150M Contingent Payment for Gas Assets
• LondonMetric Property Sells Retail Asset for £6.6M; Buys Warehouse
• Wizz Air August Passengers +16.6%