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

UK 100 Index called to open -15pts at 5900, maintaining the long-term downtrend and toughest ever start to the year for global equities. While off its overnight lows of 5840, the rebound’s failure at 5900 leaves us testing rising support from summer 2011 for a third straight session. Watch levels: Bullish 5910, Bearish 5870.

The negative opening call comes after further declines in China (down 4-8%), this time with no circuit breakers to break the falls. This saw Asian bourses continue to give up ground to their lowest in 4 years (Japan closed), fuelled by global risk aversion towards the world’s #2 economy and the impact of its slowing growth profile on the commodity space, notably oil which has seen the materials and energy sector pull Australia’s ASX back towards mid-December lows.

While China’s Yuan currency was fixed slightly firmer, note Saturday’s Chinese inflation data which saw Consumer Price Inflation edge up as expected to 1.6% but Producer Prices remain under pressure and fail to deliver the uptick expected by consensus. This data will only add to hopes of more intervention by the PBOC to both buoy the equity markets as well as the flagging growth that is concerning investors worldwide.

In focus today, amid a quiet macro line-up, will be the fallout from China’s inflation data. Thereafter with hopes high that Europe can rebound, keep an eye out for Eurozone Sentix Investor Confidence. After Friday’s strong US Jobs report the update on US Labour Market Conditions will be of interest, as well the commentary from the Fed’s Lockhart and Kaplan, with markets on edge about the pace of Fed rate hikes. Results from Alcoa (AA) kick off Q4 earnings season.

US futures are again called lower this morning following another dire session in Asia and amid continuing woes for commodities and oil that are dragging heavily on the energy and mining sectors. Investors are also seeing through good jobs data (old news now) to concentrate once again on domestic inflation and international factors. Add to this lower Q4 growth expectations after wholesale inventories fell more than expected on Friday, and a Fed that’s got pretty much every opinion going, depending on whose comments you read, and it’s uncertainty all the way.

Oil prices are still pressured around the low $30s. The prevailing themes still being Chinese slowdown and oversupply, tensions in the middle east have done little to support crude prices, well, at all! With no change expected in supply, then, and slowing demand from emerging markets, that supply/demand seesaw is continuing to tip the wrong way for oil bulls. For what it’s worth, US jobs data may underpin oil a little but the resultant dollar strength is certain to mitigate that.

Gold is healthy, as one would expect given its functionality as a safe haven asset and further assisted by the absence of a major US Dollar surge following a potentially mistimed US rate hike last month. Global factors remain supportive for Gold, as do technical indicators this morning with the yellow metal having found rising support at prior resistance.

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

• Taylor Wimpey Reports Strong 2015 Performance; New Year Begins Well
• Taylor Wimpey confident on 2016 as sales rise
• Northgate Finance Director Chris Muir to Leave March 31
• Savills Had Strong Finish to 2015; Sees Earnings Above Expectations
• Cable & Wireless Communications Offer Update
• Skyepharma estimates full – year revenue ahead of its expectations.
• M&S hopes man for all seasons can revitalise fashion
• UK insurers expect to pay out $1.9bn for flood damage – ABI
• Verona Pharma says CFO steps down
• Xchanging continues to recommend that shareholders accept offer from CSC
• Premier Oil says Isobel deep re – drill confirmed oil discovery
• Robert Walters says Q4 gross profit of 59.1 mln stg, up 5 pct