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

UK 100 called to open +30pts at 6810, back above the key round number and with an already successful retest of it as support. This offers potential for a 3-day trend of falling highs to be overcome and the ceiling of the index’s overriding 3-week down channel to be revisited at 6830. The Bulls likely want to see 6860 before getting too excited about a run up to 6955 highs of 2016. The Bears are still hopeful of another drop back to the 6760 lows of yesterday, at least. Watch levels (unchanged): Bullish 6825, Bearish 6795.

A positive market open to the new month comes after a mixed Asian session that nonetheless represents an improvement on mild stateside losses. Investors are wading through overnight macro data suggesting irregular growth in the Far East/downunder, but appear focused on it being almost 2 years since both China’s official and private PMI manufacturing prints were above 50. Risk appetite is however, being kept in check ahead of tomorrow’s US jobs report, with a risk that a strong NOn-Farm Payrolls number increases market expectations for another US rate hike this year.

Japan’s Nikkei is flat (its Topix sibling outperforming) despite already contracting PMI manufacturing  worsening a touch and capital spending growth slowing. A weaker JPY is however helping, even if off its overnight lows. Note China in the red due to PMI Manufacturing reports at odds with each other; official report improved to growth, private small business-focused report deteriorated to breakeven.

Given China’s strong trade links with Australia, it’s no surprise to see the latter’s ASX  underperforming based on a mixed read-across. It’s own disappointing macro data (manufacturing, retail sales, capital expenditure) is making matters worse, even if industrial metals prices are off their lows (Iron ore, Copper; could help London’s dual-listed Miners). A still weak Oil price continues to weighing on the Energy space though.

US stocks closed out august with a mildly negative performance, with the energy sector weighing after a bigger than expected build in US crude stockpiles. Energy was, in fact, joined by most other sectors as the wider market got the jitters ahead of what could be a September US rate hike - is the US economy really ready for one? Is the Fed just blowing hot air? Who knows, and who dares to dream?!

OPEC oil production is set to hit its highest ‘in recent history,’ although note that this should merely offset a reduction in output from African producers. This goes some way to explain the fact that crude prices have managed a monthly gain of 10% in August. The chart for Brent has it currently trading at support around $47, with haphazard rising lows from the Jan trough still in play.

Continued strength in the USD is still hampering the gold price, with the latter currently trading down around its 100-day moving average $1304.  This coincides with a horizontal support line, with rising support from the Dec 2015 lows not far below. A break below this would be significant and see potential declines continue towards the 200-day moving average $1258.

In focus today: European PMI Manufacturing prints for August are seen confirming a mixed picture in the region with France struggling versus Germany, Italy and Spain solid and the UK still dealing with a Brexit-led dent to sentiment.

In the afternoon, look out for US labour market data (productivity and costs) which may sway market sentiment about the state of the US economy ahead of tomorrow’s ‘key’ (they always are, n’est-ce pas?) jobs report. US PMI and ISM Manufacturing are also expected before the Fed’s Mester speaks after the European close.

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

• Astrazeneca completes agreement with Aspen for anaesthetics portfolio
• Mccoll's Retail Group says on track to deliver results in line with expectations
• Paysafe acquires Income Access for about $30m
• Safestore Sees FY Earnings Slightly Ahead of Views
• Bofa Merrill Lynch says Ascential stake sale raises £200m
• Hays says increased uncertainty in UK market after Brexit
• Premier Oil defers test of financial covenants
• Speedy Hire board “strongly” recommends shareholders reject Toscafund resolutions
• Apple CEO says EU tax ruling 'total political crap' – Irish Independent
• Inmarsat places $650m convertible bond
• Oil prices rebound on weaker dollar, supportive China manufacturing data
• London copper up from 2-mth lows on China factory data
• Standard Chartered soft sounds dual – tranche Samurai bond