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

UK 100 Index called to open flat at 7025, but still in a mid-September uptrend that bodes well for a rally back to early Oct 7130 highs. After 7000 proved supportive yesterday, Bulls look for a bettering of 7050 as confirmation of progress whilst Bears likely need to see 7000 give way (possibly even 6950) before getting hopeful of a bigger sell-off. Watch levels: Bullish 7050, Bearish 6995.

A flat opening call for the last session of the week comes after losses in the US and Asia as investors digest a host of risk events having passed under the bridge (ECB policy update, China GDP, US election debate) and some weak earnings. Lower commodity prices on account of a stronger USD (derived from a weaker Euro) are also weighing on risk appetite.

Although ECB President Mario Draghi may have kept shtum about any QE extension, he has pretty much teed markets up for a December announcement on extension/tweaking once working committees have had time enough to evaluate and deliver their verdict. December also happens to be when markets are pricing in another Fed rate hike, so a busy monetary policy year-end is in store.

Japan’s Nikkei is in the red in spite of a weaker Yen as lower oil prices weigh on Energy and Nintendo got a negative reception for its latest hybrid console. A Typhoon has kept Hong Kong’s Hang Seng closed while China is posting losses after its MNI Business Indicator fell to Summer lows and despite an acceleration in House price growth. Australia’s ASX weighed by China business data and a stronger USD hurting commodity prices.

US equities closed Thursday’s trading session lower, Oil prices coming off highs in a 2% slide and a shaky performance from the Telecos sector leading markets. Solid macro data caused the Dollar to strengthen against its peers (helped by Euro weakness post-ECB press conference) which led to Oil’s decline. Verizon drove sector losses with a fall in revenue worrying investors, while after-hours earning releases from Microsoft and PayPal both impressed, the former's share price making all-time-highs.

Crude oil prices suffer as the dollar strengthens during Asian trading, however both Brent and US remains above the $50 per barrel mark. A 2% slide, attributed to aforementioned dollar weakness and Russia’s largest crude producer Rosneft stating a production capacity increase is possible, did not see prices break the $50 barrier, suggesting investors still have faith that an OPEC production cut will address supply fears.

Gold also declined on the back of the strengthened greenback, falling back into the tight $1250-$1265 trading channel it has occupied for the best part of the last two weeks. This comes despite the ECB’s decision to leave interest rates unchanged, normally a precursor for safe-haven assets such as Gold to rally as investors flock to alternative investments.

In focus this morning will be UK Public Finances for the impact on a Pound Sterling buffeted in FX markets by rising and falling hopes and fears related to a soft or hard Brexit; as well as monetary policy intentions at home, on the continent and of course stateside. Forecasts are for an improvement from August’s 9-month borrowing high, back closer to the average over the last 12 months.

In the afternoon, it’s slim pickings bar Eurozone Consumer Confidence seen continuing to rebound slowly from August’s summer lows, almost back to the levels posted in July, but still negative. Then it’s the good old US Baker Hughes Rig Count after the European close for news on whether higher oil prices continue to attracting more land-based operators back to the game.

Speakers are limited to the Fed’s Tarullo mid-afternoon and his colleague Williams this evening. Further comments from UK PM May (and her continental peers) regarding Brexit at the EU Leaders Summit in Brussels. There is also potential ratings updates on a host of Eurozone nation government debt, notably Portugal, a downgrade of which could make it eligible for ECB QE purchases.

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

• IHG says Q3 room revenue growth slows
• Time Out Group says it has bought YPlan
• BAT offers to buy U.S. tobacco firm Reynolds in $47 billion deal
• BAT year – to – date revenue +8.1%
• Dechra Pharma says Q1 performance in – line with expectations, says Michael Redmond to retire from board
• Computacenter says Q3 revenue +2%
• Acacia Mining sees full – year gold production ahead of forecast
• Strong dollar pulls down oil despite tightening fundamentals
• Standard Chartered HK to sell SDR bonds next week
• Nissan to decide next month whether to build next Qashqai in UK – CEO
• Shell sells non-core Canadian oil and gas assets for $1 billion