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

UK 100 Index called to open -10pts at 7030, holding a week-long uptrend, albeit one slowed by shallow falling highs resistance since mid-month. Bulls still need a break above 7075. Bears require a breach of rising support around 7030. Watch levels: Bullish 7075, Bearish 7030

Calls for a subdued open come after mixed trading in Asia after Wall St closed just offside ahead of the Trump-Xi summit, the WSJ reporting that both were looking for a deal to suspend any new US tariffs in return for adjustments in China’s economic policy. President Trump once again vacillated in public, his messages characteristically and unhelpfully mixed.

Weak overnight China PMI data (Manufacturing lowest since June 2016, a whisker from contraction; Non-Manufacturing lowest since July 2017) may have dampened sentiment but China-sensitive dual-listed Miners trade mixed (Rio flat on Australia’s ASX, BHP -1%).

USD (and GBP) is holding steady, neither helping nor hindering the UK 100 , following the overnight release of Fed FOMC minutes which pointed to a December rate hike, though participants expressed intention for more flexibility in 2019 (more fodder for those hoping for a dovish Fed turn?).

In corporate news today UK Housebuilders may welcome stronger than expected November UK Nationwide House Price data (+1.9% YoY vs 1.7%e vs 1.6% Oct; +0.3% MoM vs 0.1%e vs flat Oct).

Shire gets European marketing approval for Takhzyro for hereditary angioedema. UK Index Russel confirms Shire (being acquired by Takeda) to be deleted from UK 100 on 2 Jan, replaced by highest ranking reserve constituent. Babcock wins 10yr £100m contract to service and operate aerial firefighting fleet for Canada’s Manitoba province, its first such contract outside of Europe.

Tesco has teamed up with Volkswagen to build 2500 electric charging stations at 600 UK stores, with a 7KW plug offered free charge and a 50KW charger costing ‘market rate’. St. Modwen Properties confirms redemption of £80m 6.25% fixed rate retail bonds due 2019.

Fitch assigns GVC Holdings with a final long-term rating of 'BB+', outlook ‘stable’. S&P Global Ratings upgrades Real Estate company Grainger to 'BB+'; outlook stable.

Avanti Communications 3-month revs $10.8m, EBITDA -$10.6m; cash $13m; order backlog $164m; Confident that current business and pipeline will mean strong growth in bandwidth revenues in final quarter; new contracts underpin significant growth in 2019 core bandwidth revenue.

In focus today will be this weekend’s G20 in Argentina where leaders will discuss the most pressing geopolitical and economic issues. All eyes on today’s Trump-Xi summit, with investors hoping for progress in resolving the trade war, although neither President wants to be seen to be backing down.

Outside US-China relations, oil traders have a close eye on a meeting between Russian and Saudi leaders, with a potential oil output cut on the agenda to stabilise sliding oil prices.

In terms of macro data, it’s a quiet finish to the trading week (and month). Preliminary Eurozone Inflation (10am) should show a slowdown in November price growth (2% vs 2.2% prev.), in line with the ECB’s medium-term target. The region’s Unemployment Rate is expected to fall to 8% (from 8.1% in October).

Speakers include several ECB council members including Mersch (10:15am), appearing at the Banca d'Italia/ECB TIPS launch event and Cœuré (12:45pm), moderating a panel at the "Global Research Forum".

ECB President Draghi participates in the Fed-sponsored Group of Thirty meeting in New York. The event typically takes place behind closed doors, but we might get sideline comments.

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