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

UK 100 Index called to open -145pts at 5925, having broken below 6000 overnight to maintain its New Year correction from 6300. All eyes on whether we get as low as December lows 5870 and if this can serve as support or whether we revisit 5800 and the intersecting trendline of support from end-July. Watch levels: Bullish 5970, Bearish 5915.

The negative opening call comes as Asian equities lurch 2-3% lower after more turbulence in China as bourses were suspended for the second time this week, investors triggering circuit breakers (-7% after just 15 mins), rushing for the exit, nervous about slowing economic growth, continued need for FX devaluation by the PBOC (5yr lows vs USD) to boost competitivity and overheated equity markets.

Further declines in the price of Oil, testing $33/barrel on supply glut fears have added to the fray, with the 18-month rout taking prices to 12 year lows, which is sure to weigh on both the majors and minors in the sector and prolong the easing of deflationary pressures. Could the $20/barrel that Goldman Sachs be reached sooner than anticipated? 

Geopolitical risk remains to the fore with the fallout from the North Korea H-bomb test, however, the Saudi-Iranian situation is unlikely to deliver any further boost to the price of oil with Iran more likely to oppose any OPEC production cut as it moves to return to market following the lifting of sanctions. US markets followed European counterparts lower after Fed minutes suggested concerns about the economic outlook and absent inflation.

In focus today will be Eurozone Retail Sales seen rebounding in November while regional business sentiment figures are expected to have remained almost unchanged. US Jobs data unlikely to garner much attention given that the fed is happy with unemployment and more focused/worries about inflation, even if tomorrow’s Non-farm Payrolls is sure to see market volatility. After the Fed minutes last night, listen out for Lacker and Evans speaking this afternoon and this evening.

Note commodity prices remain under considerable pressure with Copper breaking below December rising support at $4550, although safehaven Gold has maintained its rally to reach $1100.

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

•         Clarkson says trading in line with expectations
•         Majestic Wine comparable retail sales +7.3% for Christmas period
•         M&S CEO Marc Bolland to retire in April
•         BOC Aviation orders 30 A320 family aircraft
•         Ferrexpo Q4 pellet production +4.3% sequentially
•         Gold miner Centamin forecasts production ahead of last year
•         UK builder Persimmon sees 2015 revenue rise as builds more homes
•         Poundland hit as Christmas shoppers desert the high street
•         Rathbone Brothers says managed £29.2bn at end-Dec.
•       EasyJet passenger numbers rise 4.6% in December