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

UK 100 Index called to open -15pts at 6660, the September downtrend taking another leg lower. We may be off the worst levels of the month after a second bounce from 6640 overnight but still need to overcome overnight highs of 6670 before bullish inspiration can take hold. Intersecting resistance from September high lurks just below 6700, making for another hurdle to clear before Bulls get excited. The Bears are looking for another test of overnight lows that could take us back to early August support at 6610. Updated watch levels: Bullish 6680, Bearish 6745

A negative market open can be attributed to a weak Asian session where several bourses have already begun long weekends and following mild stateside losses. Looming central bank updates (SNB, BoE today; BoJ, Fed next week) continue to burden investors desperate for more stimulus to keep the accommodative policy market party going or at least signals that tighter policy is not imminent. All the while macro data remains mixed and concerns grow about both a waning potency of existing global stimulus and fresh options running dry.

Japan’s Nikkei is underperforming due to exporters taking a knock from a stronger Yen and Energy under the cosh from another leg down by Oil (US Crude sub-$44)  despite a US stockpile drawdown. Note Australia’s ASX outperforming in spite of mixed jobs data and after an easing in inflation expectations. Miners are benefiting from a rebound in the price of Copper (major breakout) and Aluminium and support for Nickel, all offsetting weakness in Energy, even if Iron Ore remains weak.

The Dow Jones closed slightly lower with losses in Tech (notably IBM) and once again US Energy weighing on the rest of the market thanks to a continued crude oil price slide even after a brief rally following surprise EIA inventories data. This afternoon’s latest release of US macro data may prove divisive for Fed rate speculators as particularly strong data may yet again see the probability of a rate rise increase next week increase. Volatility remains king stateside.

Oil begins trading this morning flat with a slight increase in Brent crude price thanks to an overnight bout of bargain hunting from optimistic investors. Although don’t expect this to curtail the current slide in oil prices, even after yesterday’s brief rally resulting from surprise EIA inventory figures. Fresh worries about an increase in US crude production alongside a tripling of distillates are the latest to hit the already oversupplied global oil market.

Gold continues on its sideways trend with a slight decline this morning as quiet markets (in the absence of Chinese trading) wait for upcoming central bank policy announcements. After breaking a five-day downtrend yesterday thanks to increasing uncertainty in equity markets, the Bank of England policy decision at midday may rattle the market should Carney & co. surprise us with anything other than maintaining interest rates at 0.25%.

In focus this morning will be UK August Retail Sales seen reversing some of that surprisingly strong July rebound which followed a weak June. We have already had the BRC Retail Sales suggest August contraction, the weakest month in almost 2yrs. This will only add to uncertainty about the post-Brexit landscape on which we will hear more from the Bank of England at midday. No policy change expected so soon after a bold move last month, but the minutes will be interesting in light of recently positive macro data and Carney’s ‘serene’ comments.

Eurozone August Consumer Price Inflation is seen recovering from deflation in July although the annual rate remains close to zero and the Core read unchanged at less than half the ECB’s target underlining the quandary Draghi finds himself in after years of stimulus and clearly waning potency.

In the afternoon, US Retail Sales growth is forecast just in the red for August, although positive ex-Autos & Gas. The control group is even seen accelerating. Empire State Manufacturing is expected to post improvement albeit still negative, while the Philly Fed gives up a little ground before PPI data improves to inflation from deflation and Industrial Production declines. Does an upside surprise from any of these data points have potential to increase expectations of as Fed rate rise next week?

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

• Next 1H Pretax Profit -1.5%; Backs FY17 Expectations
• Wm Morrison Sees No Adverse Brexit Impact; Earnings Rise
• Booker: Tobacco Display Ban Resulted in Marginal 2Q Sales Decline
• Informa to Buy Penton Information Services for £1.18bn
• GlaxoSmithKline Results Phase III Study Shingrix Vaccine in NEJM
• JRP Group Swings to 1H Pretax Profit; Upgrades Synergy Targets
• Redrow Seeks Authority to Buy Back Shares
• Biffa Intention to Float on the London Stock
• Meat retailer Crawshaw says adverse weather, Brexit hit H1 trading
• Ophir says two bidders in the fray for Fortuna contract
• Premier Farnell says H1 adj pretax profit -11.1%
• Enquest says ends Kraken stake sale talks with Delek Group