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

UK 100 Index called to open flat at 6980 with a steady climb from overnight lows of 6955 getting half-way back towards yesterday’s breakout highs which were just shy of the key 7000 mark. This offers potential for the highs to be tested again today, something that would encourage those Bulls already eyeing last year’s all-time highs of 7135. The Bears will be hoping that the uptrend and/or any foray north fails again and that overnight lows give way. Note any further GBP weakness could give the UK Index another boost today. Watch levels: Bullish 7005, Bearish 6950.

Another flat start comes in spite of a positive Asian session which bucked a negative US close. Investor sentiment suggests investors struggling with fresh Brexit concerns now that a timetable has been announced versus some positive Asian macro data.

Japan’s Nikkei is outperforming thanks to a mildly weaker Yen versus the US Dollar while Australia’s ASX is the regional underperformer on account of banks facing politicians amid new fines. This is spoiling Energy sector gains thanks to a higher oil price and the Reserve Bank leaving rates unchanged at their record low.

US Equities closed lower on Monday after Friday’s late rally and some weaker than expected macroeconomic data caused some readjustment in markets. September Manufacturing PMI hit a three-month low while construction spending also fell after a predicted increase, however ISM Manufacturing increased to a greater than 50 expansionary figure.

Oil, having fallen from yesterday’s highs, remains in uptrend after last week’s preliminary OPEC agreement to reduce oil production as investors warm to the prospect of a concrete deal being agreed at the next official meeting in November. Reaching the $50 per barrel mark yesterday for the first time since August may help to increase sentiment in the crude oil market, although an overnight strengthening in the US dollar and yesterday’s report of a Libyan production increase may impact crude oil prices today.

Gold is trading sideways since yesterday’s close although remains in an almost two week downtrend, not helped by the strengthening of the USD overnight. With the DAX 30 reopening today after Germany’s Unity Day holiday yesterday, the movement of Deutsche Bank shares may have an impact on the safe-haven asset, although the continuing week-long holiday in China may see the metal embrace a period of consolidation.

In focus today we have UK Construction PMI seen flat in September, just below the key 50 level that separates expansion from contraction. The sector is being watched after the UK government’s announcement of £5bn in new funding to encourage more housebuilding. Potential for more infrastructure spending could help further amid the UK’s creep towards Brexit. Thereafter Eurozone Producer Price inflation (PPI) is seen falling back negative in August, although the annual deflationary rate may well have improved.

In the afternoon, US ISM New York will give an idea about business conditions among manufacturers and non-manufacturers in the New York area while US IBD/TIPP Economic Optimism measures sentiment among consumers about economic conditions. Note both measures in contraction last month so any improvement towards growth would likely help bolster US risk appetite.

Speakers today include a number of ECB representatives (Linde, Costa, Praet and Knot) throughout the morning, followed by the Fed’s Lacker ("Economic Outlook”, West Virginia) early afternoon and the BoE’s Sanders (Institute of Directors, Manchester) just before the European close.

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

• BHP Billiton, Rio Tinto rebuff proposed iron ore tax change in Australian state
• British PM May says Brexit timetable important for businesses
• Carillion wins £350m Nationwide Building Society contract
• Catena Media buys social media sports news website in UK
• Electra Private Equity to draw £36m from Premier Asset Management IPO
• AstraZeneca's Brilinta fails in peripheral artery disease trial
• AstraZeneca Pharma India medical representatives threaten strike – Business Standard
• Plymouth Minerals signs drilling contract with Meridian Drilling
• Ryanair says September traffic +13%
• Wizz Air passenger numbers rise +17.9% in September
• easyHotel says Barcelona hotel due to open in early 2018
• Greggs says full year expectations unchanged
• Australia's Rio Tinto hits 5-month high on iron ore demand, copper gain
• Vedanta Ltd to invest more in India, says CEO – Business Line
• Copper prices firm after US factory report in holiday – thinned trade
• Oil prices dip on surging Iran sales, but looming OPEC deal offers support
• Dollar up on upbeat manufacturing survey, “hard Brexit” fears hit pound