UK 100 Index called to open -10pts at 6775, not far off the 6760 lows of yesterday. This after a sharp pull-back into the European close to trade sideways 6765-6790 overnight. Bulls will need 6790 overnight highs to be cleared to inspire hope of 3-week channel highs at 6850 being regained. The Bears will want to see yesterday’s 6760 lows give way to open the door for a test of the channel floor just above 6700. Watch levels: Bullish 6795, Bearish 6755.

A negative European open comes in spite of a solid Asian session supported by higher oil prices giving a fillip to the Energy sector after OPEC agreed to a 6-month production cut (first since 2008), although this is still contingent on significant participation by non-OPEC (read Russia), to help rebalance an oversupplied market and buoy prices. Conflicting China PMI Manufacturing data may also be weighing along with continued slowing UK House price growth which may also hinder the housebuilders.

Japan’s Nikkei and its exporters are getting help from a weaker Yen, even if the currency is off its worst levels. Strength among Energy names is also helping both it and Australia’s ASX to a similar degree while Miners get an additional boost from a rebound in Copper and Iron ore. Note China PMI Manufacturing still growing, but a higher official reading is at odds with a lower unofficial print.

US equity markets closed mostly flat or lower as bourses used the boost to the Energy sector on OPEC’s production cut agreement in order to offset losses made in other sectors. The Dow Jones posted fresh all-time highs in early trading built upon the Oil inspired rally, however later retreated alongside the S&P 500 which pared early gains to eventually close in the red based on a poor trading session for the Utilities and Telecom sectors.

Crude Oil prices enjoyed a 9% rally yesterday and have continued on their way northward overnight in Asia as the OPEC production cut deal already reaps rewards for the world’s largest producers. Long-term apprehension surrounding the deal (and the potential for a pick-up in US shale production) will be thrown to the back of investors’ minds as Brent regains a $52 handle and US Crude fast approaches $50 per barrel. How long can the post-deal rally last?

Gold suffered a breakdown of its $1184 support yesterday to fresh 9-month lows as China introduced further efforts to curb its import, adding to a mounting list of downward pressures on the precious metal. An overnight bounce from one week falling lows support has led to a failed challenge at $1176 intersecting resistance, with the price of the metal now falling once again.

In focus this morning will be November European Manufacturing PMI which are seen improving in Spain and Italy, but confirmed edging back in France and Germany. The Eurozone regional figure is however seen inching up. All are forecast to remain easily in growth territory.

In the afternoon, with the US Jobs report looming tomorrow, anything employment related is likely to garner more attention than usual so listen out for US Jobless Claims and Challenger Job Cuts. Thereafter, US PMI Manufacturing is expected to be confirmed higher in November, the same being true for ISM Manufacturing.

Speakers include the ECB’s Nowotny, followed by the Fed’s Mester and Kaplan who both spoke yesterday in which case new nuggets may be lacking.

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

• British Gas to freeze UK energy prices this winter
• Bank of Ireland says told to maintain 8% transitional CET1 ratio
• Britain's Daily Mail publisher hit by decline in ad revenue
• Glencore updates on some completes disposals
• Glencore says on track to cut debts, beats asset sales guidance
• Britain's Serco sticks to 2017 profit forecast, signs UK hospital contract worth up to £600m
• Rio Tinto says target of SEC probe over Mozambique coal
• BHP Billiton Australia copper mine hit by another power outage
• Anglo American sells stake in South African miner Exxaro
• Grainger says Brexit uncertainty has not impacted its sales pipeline
• Catena Media buys website casinouk.com in UK
• UK house prices rise at slowest rate since January – Nationwide
• British American Tobacco opens e–cig shop with new product
• Brent crude oil prices surge to nearly $52/bbl after OPEC agrees output cut