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

UK 100 Index called to open -200pts at 6645, with futures having broken below Friday’s 6650 lows. Although reassuringly well off their 6515 overnight lows, suggesting less panic then might be expected, we note 6650 has already proved resistance, so another leg lower can’t be ruled out. After this result, nothing can be ruled out politically, ever again! Bulls will be looking to get back above 6650 for recovery momentum. Bears will want to see us back below 6600 to open the door to further declines. Watch levels: Bullish 6675, Bearish 6590.

A negative open is not exactly unexpected given the US election result reviving Brexit memories. However, futures prices well off their overnight lows suggests far less panic than on June 24, investors perhaps welcoming the opportunity to move on from this period of electoral uncertainty, now ready to deal with a pro-Business Trump. Less chance of a US Fed rate hike also helps keep investors smiling at the prospect of cheap money and accommodative global monetary policy stance for a while longer.

Japan’s Nikkei is 5% in the red as a stronger Yen (derived from USD weakness and safehaven seeking) hurts exporters. Australia’s ASX is faring better, down just 2% as the weaker USD boosts metals prices to help the miners, although depressed oil prices keeps the pressure on Energy. Note the muted reaction in China down just 1%.

US equity markets rallied into the close and as voting entered its final stages, however futures are pointing towards a 2.5% slide. More significantly, however, is the fact that the Dow Jones is paring losses, rallying by as much as 300 points from its 5am overnight lows as the result became clearer and election uncertainty dispersed. Forecasts of the S&P falling by up to 10% seem to have overstated the potential reaction to a Trump victory.

Crude Oil prices have staged a mild rally from overnight lows, however, they remain below the levels when results began flowing in. Trump’s pledges point to making the US energy-independent via a massive expansion in US shale industry, putting (potential) future oil production stateside directly at odds with OPEC’s current focus on curbing global production in order to support prices. Is this month’s production cut deal now in jeopardy?

Gold, despite falling from its 5am highs, is the big commodity space winner of the night, rallying $45 dollars/oz on increased uncertainty surrounding a Trump presidency. The probability of a December US Fed rate hike has decreased significantly, falling from 82% before the votes were counted to evens at present, boosting the appeal of the safe haven asset.

In focus today will be the fallout from the shock US Presidential Election Result. A surprise win for Donald Trump brings back to the fore memories of the UK’s June Brexit referendum and the political, economic and financial uncertainty that has since ensued. After a UKIP-led Leave campaign in the UK, and now this in the States, there is a greater chance that Le Pen and the Front National wins in France next year, changing the face of European politics forever.

Data-wise, for what it’s worth away from politics, look out for US Wholesale Inventories and Trade Sales seen confirmed growing in September. Hopes of a US Crude Oil Inventory drawdown balancing out last week’s huge build have already been dashed by another API build last night. Oil is flirting with lows, Trump wanting to boost shale/fracking to keep the US energy self-sufficient. This is rather at odds with OPEC’s efforts to curb global production to support prices and may hinder prices near term.

Speakers today include ECB Chief Economist Praet and his colleagues Nouy and Coeure, along with the BoE’s Gracie and Haldane. However, of more interest may be what the Fed's Kashkari has to say given the new US political landscape and market odds of a Fed rate hike in December collapsing from over 80% to merely evens as we write.

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

• Tullow Oil Cuts Production Guidance at TEN Oil Field
• Esure Reports 15% Growth in 3Q Premiums
• Redrow Reports Sales Up on a Year Ago, Demand Stays Strong
• Premier African Minerals Limited Zulu Lithium and Tantalum Project Update
• SSE Profit Jumps on Commodity and Derivatives Trading Gains
• Primark Is Expanding Its U.S. Retail Foothold -- WSJ
• Sainsbury 1H Adjusted Profit Declines, Cuts Dividend
• Experian 1H Net Profit Rises
• Burberry to Buyback Additional £50M Shr Upon Completion of First £100M
• Workspace Hikes Interim Dividend by 40%
• Synthomer PLC Q3 Trading update