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

UK 100 called to open +45pts at 6630, well off yesterday’s 6535 lows, however still trading a 3-week falling channel. Bulls need a break above 6680 overnight highs for another challenge of the 6725 channel ceiling. Bears require a breach of 6630 overnight lows if they are to trouble the floor/yesterday’s trough again. Watch levels: Bullish 6680, Bearish 6630

Calls for a positive open come after another choppy US session where the index trio, which was in the red for most of the day, finished with a late surge and huge reversal to close positive. All this did, however, was add to what has become a surprisingly volatile end to the trading year, seemingly doing its best to compress 2018's moves into the space of just a few days.

Portfolio re-rebalancing and automated trading still being blamed, along with a poor US consumer confidence data and bargain hunting amid thin holiday volumes. That said head-scratching is widespread while all the same headwinds prevail; US/China trade uncertainty, monetary policy tightening, oil supply/demand, slowing growth, US government shutdown, etc.

Overnight, Asian bourses unconvinced with Japanese stocks offside, perhaps wary of a repeat of yesterday’s positive European open (after that record breaking US bounce) quickly turning red to finish the day lower. USD weakness is also proving unhelpful by producing reciprocal Yen strength.

Oil prices are higher, off their overnight lows, in spite of disappointing API data after another inventory build versus expectations (+7m barrels vs. -2.9m est.), keeping prices seesawing after supportive Russian commentary early in the week briefly helped offset supply:demand uncertainty.

In corporate news this morning CRH completes Phase 3 (€100m) and announces final Phase 4 (max €200m; 2 Jan-29 Mar) to complete its €1bn 12-month share buyback programme. Royal Dutch Shell completes sale of New Zealand entities to OMV for $578m as part of plans to simplify its upstream portfolio and re-shape the company.

Bank of Georgia raises $10m from EFSE (European Fund for Southeast Europe) and $25m from GGF (Green for Growth Fund), both with 5yr maturities; to support working capital financing and investment needs of micro and small enterprises, large businesses and public entities.

In focus today, macro data of note includes UK Mortgage Approvals (9.30am) which could have read-across for UK Housebuilders, Banks and Estate Agents.

Spanish GDP (8am) is expected to confirmed no change from 0.6% QoQ and 2.5% YoY. December Inflation, however, may have slowed a touch (1.5% YoY vs 1.7% prev.), the same true of German Inflation (1pm; 1.9% YoY vs 2.3% prev.) , which could be a concern for an ECB currently ending QE and hoping to be able to raise interest rates later in 2019.

Stateside prints this afternoon comprise Chicago PMI (2.45pm; expected to reverse November’s spike), US Pending Homes Sales (3pm; forecast to rebound after a weak November) and EIA Oil Inventories (4pm; drawdown anticipated although API disappointed with a build last night).

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