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

UK 100 Index called to open -40pts at 6125, in the midst of what looks like another journey south to the floor of what has become a 5-week 6100-6200 sideways channel. The bulls will be looking to profit from any rebound towards the 6200 ceiling. The Bears are prepared to roll with the weakness in the hope that we get finally a breach of 6080 support. Still in 9-month downtrend. Watch levels: Bullish 6155, Bearish 6120.

The negative opening call follows mild US losses and a red session in Asia overnight where stocks dropped to a 5-week low due to Yen strength and oil continuing to lose ground with more US stockpile growth forecast and lack of belief in any OPEC-led production freeze. investors also continue to reassess the recent risk asset rally and outlook for global monetary policy.

Japan’s Nikkei underperforming regional peers due to a strong Yen (USD/JPY at 18-month highs) which dampens the outlook for exporter earnings. This after BoJ Governor Kuroda said monetary policy alone cannot solve Japan’s economic problems and Labor Cash Earnings accelerated much more than expected in February, offering some welcome/unwelcome signs of long-absent inflation. While USD remains weak, Yen suffering from its safehaven status.

China and Hong Kong bourses offering mixed signals after holidays. Australia’s ASX lower on account of weak energy and raw materials prices hurting the miners. Overnight, Services data in commodities-reliant Australia fell back into contraction in March while Consumer Confidence gave up ground. This supports the Reserve Bank of Australia's decision to leave rates at record lows, and it highlighted persistent Aussie dollar strength could hamper economic transition to new growth drivers.

Indian PMI Services fell back to breakeven just before its central bank cut interest rates as expected. A poor Feb for German Factory Orders, albeit volatile like US, also adds to Eurozone woes and vindicates the recent ECB stimulus bazooka. The data looks to be setting the DAX up for a much weaker open than peers.

US markets closed down Monday after a quiet session was hit by oil price declines. Low volumes seem to reflect trepidation ahead of US earnings season, due to be unofficially kicked off by Aluminium producer Alcoa next week.

On the plus side for US stocks, confidence in a ‘slowly, slowly’ approach by the Fed prevails despite Boston President Rosengren (usually quite dovish, now pretty hawkish) breaking the mould and, rather confusingly, telling ‘pessimistic’ markets they may be in for a surprise rate hike. While Rosengren sees little spill-over from emerging markets headwinds, that’s at odds with the IMF’s view.

No surprise to see crude prices fall yesterday as the global oil production freeze soap opera continued to weigh on market sentiment. Both Brent and WTI are in steepening downtrends from 18 March high points, having dropped out below their falling channels and currently consolidating ahead of more potential downside towards $36 (Brent) and $34 (US Light).

Gold has popped back up above the key $1225 level this morning, tracking the slightly softer opening call for equity markets and following a return to market of Chinese investors. A break above 11 March falling highs $1231 would be encouraging, while a further break above resistance around $1240 would be convincing.

In focus today will be the Services PMI data seen holding its heads above water and posting continued growth in the Eurozone, UK and US. Eurozone Retail Sales seen flat in Feb. In the afternoon, US ISM non-Manufacturing nice and strong, although US Economic optimism remains weak.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.

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

• Deutsche Bank Downgrades Tesco Ahead of FY Results
• Oil prices extend losses on looming gasoline glut
• Kazakhstan files $1.6 bln claim against BG – Eni venture – Lukoil
• Petroceltic updates on development drilling in Algeria
• Motoring group AA full – year earnings drop 3.3 pct to $591 mln
• Wizz Air says March passengers number up 20.8 pct
• Moss Bros says FY revenue rises 5.5 pct
• Credit Suisse faces tough questions after $1 bln write – downs
• Card Factory says FY revenue rises 8 pct, fiscal pre-tax +96%
• Tate & Lyle performance in line with expectations
• Iron ore shipments to China rise 12 pct in March – Pilbara Ports
• Cranswick FY16 Total Sales Volumes +12%
• John Wood Group Buys Australian Engineering Firm for Undisclosed Sum
• Electrocomponents Sees FY Profit at Top End of Market Views