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

UK 100 Index called to open -20pts at 7075, in overnight retreat from its second failed attempt to conquer all-time highs (7135) in the space of a week. The index recorded its second highest close ever yesterday, but the overnight drop back to test 7080 - resistance for much of last week - will be a worry for Bulls. Are those highs a bridge too far? Bears hope this is the case and that current weakness extends back to 7040 rising support. Watch levels unchanged: Bullish 7090, Bearish 7020.

Calls for a negative open are in spite of a largely positive Asian session as Energy takes centre stage following yesterday’s oil cap cooperation talk from Russia. Of course such rhetoric is good to hear, however, oil prices already off their 12-month highs suggests a degree of understandable scepticism (and a stronger dollar) such as we saw after last month’s Algiers meeting. After all, talk is cheap and there is time enough for good intentions to evaporate.

Gains on Japan’s Nikkei stem from a weaker Yen, gains by Energy names and investors playing catch up from a long weekend. Note, however, Asian stocks off their best levels as Samsung Electronics and Chinese developers tumble on the former’s grave product problems. China flat while the renminbi remains weak versus the US dollar. Australia’s ASX is flat with early Energy gains being eroded over the course of the session and sentiment offset by disappointing home loans data hurting real estate.

US markets finished trading yesterday showing gains across the board. Amid light trading volumes due to Federal Columbus Day holiday, a strong performance from the Energy sector thanks to soaring crude oil prices helped to build on a positive open following the second US Presidential debate which added spice to the run-in, the election only weeks away.

Crude Oil prices have fallen from yesterday’s highs (12-month highs for Brent crude) due to an overnight USD strengthening but remain above $52.80 and $51 for Brent and US crude respectively. A statement from Russia’s President Putin supporting a production freeze alongside OPEC to address the global oil supply glut led to 3% gains in crude oil markets yesterday, with continuing talks today on the side-lines of the World Energy Conference likely to provide further market movements. However, some scepticism remains surrounding the implementation of the deal by the notoriously sentiment-heavy, action-light OPEC.

Gold is trading in a sideways channel having fallen slightly from yesterday’s highs but positive early morning trading could see the precious metal test $1265 resistance. Overnight comments from non-voting US Fed member Evans stating that inflation targets may not be met until 2020 potentially helping the safe-haven asset with these early gains.

In focus this morning, amid another quiet macro data line-up, expectations are for October ZEW Surveys for Germany and the Eurozone to deliver small improvements which could help the Dax and Euro. Afternoon USD-sensitive prints include US NFIB Small Business Optimism forecast to hit 2016 highs in September, and US Labour Market Conditions for which there is no consensus but we note they dropped back negative in August after hitting 2016 highs in July.

Data may be lacking but we have plenty of events/speakers to keep us on our toes. Following production-cap-cooperation comments from Russian President Vladimir Putin yesterday that helped Brent Crude Oil prices hit 12-month highs, the World Energy Congress in Istanbul is sure to remain on everybody’s radar given the knock-on for Energy names and inflation expectations.

Thereafter we may get more from the Eurogroup Meeting of finance ministers regarding disbursement of bailout funds for Greece in exchange for reforms. Additional chat about Brexit after the group’s head Dijsselbloem said a ‘hard Brexit’ was a UK decision could also impact a weak GBP. Rhetoric from the BoE’s Saunders and Kashyap will understandably be watched as well as what the Fed’s Kashkari says before the European close and the EU’s Juncker and ECB’s Mersch after.

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

• Nanoco Group's full-year loss widens
• Housebuilder McCarthy & Stone says trading more stable after Brexit dip, CFO Nick Maddock to step down
• Gulf Keystone Petroleum announces scheme allocations
• Keller wins Egypt contract with a value of about £60m
• Retailer Ted Baker revenue up on online growth, says experienced good start to its financial year
• Arrow Global Group to hold capital markets day
• PageGroup says UK confidence levels 'fragile' post – Brexit
• Great Portland says letting values since July broadly in – line with March estimates
• Airbus to cut A380 assembly rate to one aircraft per month from 2018
• Savannah Resources announces new consortium deal with Rio Tinto
• Victrex sees lower consumer electronics volumes in 2017
• AB Inbev announces listing of new shares
• Heathrow Airport says Sept. passenger numbers +0.4%
• John Wood Group wins oil well pad deal with Suncor
• NWR says Karbonia shares transferred to Prairie Mining Limited
• N Brown says on track to meet FY expectations
• Marathon sues BP for breach of contract in Texas oil refinery sale
• BP scraps plan to drill off Australia's south coast
• Oil prices dip but stay near 1 – yr highs on expected output cut