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

UK 100 Index called to open -30pts at 6095 with a sharp sell-off to 6050 after the European close completing December’s bearish flag pattern. While an overnight bounce to 6100 bolsters rising support from end-August, a failure to test above 6100 this morning merely adds to December’s downtrend. Long or short-term, which will prevail? Watch levels: Bullish 6110, Bearish 6075.

The negative opening call comes after Asian stocks extended their drop following a major turnaround by US bourses to make it a third down day in a row on global growth concerns as Apple led the tech sector lower, results from Costco disappointed and an oil price rally evaporated, undoing progress by commodities-linked names and M&A talk.

In Asia, Japan’s Nikkei underperforming due to USD weakness and improved PPI deflation helping the JPY to month-highs to the detriment of exporters. Australia’s ASX also a victim of currency strength  with a strong Aussie jobs report (best since 1988) denting hopes of another RBA rate cut, sending AUD to Monday highs. China stocks outperforming as brokerages rally on speculation of simpler IPO registration process.

The Dow Jones gave up over 300pts yesterday after rallying initially, with oil about-turning soon after supportive crude inventory data was released as markets remained focused on global oversupply and generally depressed commodity prices, further weighed on by a slowing Chinese economy, weak US manufacturing and generally sluggish global growth. Is the US, or the world for that matter, really ready for next week’s Fed rate hike?

In corporate news, and given the travails of the commodity sector, note the update from Glencore (GLEN) suggesting it is ahead of schedule with its debt reduction programme, even able to increase its targets via deeper spending cuts. Peers still under scrutiny as to their plans.

In focus today will be chat from ECB speakers (note Fed counterparts in blackout period ahead of next week’s potential rate hike). We also have the BoE policy decision although no change expected and the minutes more important. In the afternoon, US Import price deflation will be of interest for any signs that deflationary pressure is easing (unlikely with commodities still under so much pressure) which could reduce fears of a December rate hike being too early.

Crude oil is still in a downtrend this morning with only the most fleeting of rebounds yesterday afternoon coming off the back of US stockpile data, which showed a bigger than expected drawdown in crude (=supportive of the oil price) but a large increase in distillates (the processed stuff like petrol), which basically compounded the oversupply issue: Net change = zero.

Gold’s uptrend is leveling off this morning with volumes likely receding ahead of next week’s FOMC meeting. A breakdown out of a bearish pennant pattern should happen imminently or not at all and might see $1067 hit today, while support holding around $1072 likely to see the yellow metal move sideways in a tight range.

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

• Centrica says FY earnings outlook in line with expectations
• TUI Group annual earnings beat guidance
• Go-Ahead says on track to meet FY expectations
• Londonmetric Property sells distribution warehouse for £18.2mn
• Sports Direct Intl on track for earnings goal
• Britain's Mulberry reports encouraging H1 trading
• PZ Cussons says Nigeria trading environment difficult
• Micro Focus Intl. posts jump in H1 earnings​; exec chairman Loosemore to stay until 2018 at least
• Wood Group sees FY EBITDA at around $465mn​
• Recruiter Michael Page appoints new chairman David Lowden