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

UK 100 Index called to open +30pts at 6410 with Monday’s bounce off 6310 now challenging Friday’s 6420 highs and the trend of falling resistance dating back to 23 Oct. This keeps us sideways since early October, pausing after the late September rally. Whilst in an uptrend from late-Aug lows, we have yet to trouble falling highs from late May which sit just above where we trade. Watch levels: Bullish 6440, Bearish 6375.

The call for a positive open comes after Asian stocks jumped overnight, helped by the very strong IPO for Japan Post and its subsidiaries (biggest global IPO this year) and Chinese stocks rallying, albeit erroneously, on re-publication of 5-month old comments about a Shenzhen-Hong Kong exchange link ‘this year’ to compliment the Shanghai-HK link.

Improved readings on Japanese and Chinese PMI Services suggesting momentum are also helping, coupled with the ECB president Draghi dovishly defending his willingness/ability to flight low inflation and growth via more accommodative action, possibly in December. So the Fed could hike and ECB could do more, in the same month. Could they offset each-other and keep the global easy policy party in full swing.

Asian stocks followed US and European bourses higher but with much more impressive gains, as commodity producers climbed on a higher oil price and renewed appetite for risk assets. Chinese stocks rose the most in 3 weeks led by financials and technology helped by the exchange link article and reports that Beijing is ready to open up its markets further to foreign investors.

US Equities closed moderately higher with the NASDAQ managing a new record close – topping that made back in 2000 during the dot com bubble. What that says about valuations on the US tech stocks that contributed to yesterday’s gains remains to be seen.

Interesting to note the NIESR predicting a UK rate rise as early as February 2016 while ECB president Draghi continues to be dovish on Eurozone monetary policy. This may look like a divergence but don’t forget that of the US, UK and Eurozone central banks, the ECB was last to implement QE by some way so it makes sense it should be the last to exit.

In focus today: PMI Services for Europe with solid improvement expected from all major components while Eurozone Producer Prices are expected to show deflation easing in September, but pressure worsening since last year. Ahead of Friday’s US Non-Farm Payrolls, the US ADP Employment change will be looked to for clues about the strength of the US job market and whether it adds weight to the Fed’s call for a rate rise this year. US PMI Services and ISM Non-Manufacturing are both expected to remain solid before the Fed’s Yellen speaks.

US Light crude trading near the top of its range (after reports of supply disruption in the US and Brazil) gave a boost to US energy stocks, with corresponding benefits in Europe from Brent making $50 a barrel and Tullow Oil (TLW) getting an additional boost from elsewhere to send its shares up 16%. US Stockpile data due out today looks as if it will show another increase in supply despite a fall in operational drilling rigs which presumably had a hand in sending oil prices to where they are now. Disruption is temporary by definition. Beware!

Gold has retreated to near 4-week lows below $1120 having traded out of its 3-month rising channel on speculation about US and UK interest rate rises and subsequent risk-on re-adjustments.

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

• M&S non – food sales dip again but profit margins grow
• Countrywide sees FY EBITDA down, but optimistic on future growth
• Old Mutual says Q3 Wealth unit inflows up 45%
• Glencore says targeting net debt of about $25bn by year-end
• Legal & General 9mth net cash rises 14% to $1.45bn
• Vedanta Resources halts dividend after profit falls
• AB InBev, SABMiller extend takeover deadline to Nov. 11
• Stagecoach on course to meet expectations for the year
• Ryanair traffic rises 15% in October
• Lonmin says could "cease trading" if $400mn rights issue not backed
• J D Wetherspoon Q1 operating margin falls to 6.2%