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

  UK 100 Index called to open -8pts at 6409, making it another negative start and having given up more ground sharply yesterday from the festive peak around 6650. This maintains the trend of falling highs from September, backed up by falling highs on the daily RSI, with potential for a full retrace to the Oct/Dec/2014 lows around 6100. The 6400 level was regained before the US close, but we are back testing it as we write. Watch levels: Bullish 6450, Bearish 6375

The weak open stems from a very negative US finish as the Oil price fell further to print fresh 5yr lows and test $50/barrel on a combination of over-supply fears, a Saudi State owned oil company cutting prices to Europe and the US, a strong USD and increased bets (Put options) on further falls. This added to depressed global inflation expectations, while Greek political woes and its future within the single currency EUR added to existing unease about the global growth outlook.

These drivers have seen Asian equities similarly bloodied overnight (Japan’s Nikkei the standout underperformer -3%) despite data showing growth improvements for both the Japanese PMI Services and the HSBC China PMI Services readings, with the latter notably expanding for the eight straight month and at its fastest in three.

Europe finished deep in the red hurt by poor German Consumer Price Inflation readings which reinforced Eurozone deflationary fears and supported calls for sovereign bond buying QE from the ECB. This outweighed a better than expected ISM New York reading and added to global growth fears (Europe/China), political uncertainty (Greece, EUR) and divergent monetary policy dominate sentiment (Fed/BoE vs ECB/BoJ/PBOC).

In focus today we have final Eurozone PMI Services readings for December, with France expected to edge closer to growth, German growth to slow a little and Eurozone growth as a whole to improve slightly. The print for UK PMI Services is expected to remain strong and the US solid, although US ISM Non-Manufacturing is seen giving up some ground and Factory Orders negative for a second month.

Gold maintains its uptrend from Jan 2 lows of $1170 to regain $1210 despite the strong USD on US rate rise expectations and monetary policy divergence round the world, resuming its safehaven relationship and traditional gains versus weak equities as market jitters (Greece, EUR, global growth) establish themselves. Short-covering still likely helping. All eyes on Dec highs around $1240.

US Light Crude fallen below $50/barrel and Brent to $52 as the bear market for the commodity maintains course on fears that US inventories will show more expansion, and that global supply will continue to exceed demand as global growth is called into question amid a slowing China and troubled Europe and as the USD stays strong on a hawkish Fed versus global peers.

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.

Key Overnight Macro Data: (Source: Reuters/DJ Newswires)

• Australia              Trade balance                    Deficit grew by less
• Japan                    PMI Services                      Growth accelerated
• China                     HSBC PMI Services          Growth accelerated

See Live Macro Calendar for full data line-up, incl. consensus expectations

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

• Gulf Keystone says focusing on maintaining 40,000 bopd target
• Senior Plc names David Squires as new CEO
• Galliford Try agrees 49 mln stg Wick community campus contract
• Meggitt acquires Precision Engine Controls Corporation $44.2 mln
• Sigma Capital appoints Malcolm Briselden as finance director
• Ferrexpo says full-year output rises 2 pct
• Bunzl expands safety business in north America
• Gulfsands Petroleum finds gas in Morocco

Amara Mining says 63 pct rise in indicated resources at Yaoure