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

UK 100 Index called to open -12pts at 6615, sitting within a new sideways 6600-6635 range having shifted up slowly from Fri/Mon’s 6550-6600. The rising trend from mid-October lows holds, meaning September highs 6900 are a target, but we reiterate realism after a 9.3% bounce and with a narrowing (rising wedge) of the advancing trend. Our watch levels move to a bullish 6640 and bearish 6595

US equities posted tiny gains amid limited activity for Veterans Day holiday. This after European stocks closed 0.2% to 0.5% higher with Armistice Day impacting volumes in Europe too. The only data of the day showed a slightly better than expected improvement in US NFIB small business optimism.

In Europe, the German Council of Economic Experts predicted muted growth for Germany in 2015 while Chancellor Merkel said the EU is not planning any major new sanctions against Russia. The Fed’s Rosengren was vocal again saying the Fed should refrain from raising short-term interest rates until there is stronger evidence the central bank's goals for employment and inflation are within reach.

In Asia overnight, equities mixed, with Australia’s ASX200 in the red despite an improvement in Consumer Confidence and stable Wage Costs, while Japan’s Nikkei at a fresh 7yr high thanks to a still weak JPY/strong USD (albeit with swings overnight), a rebound in Tertiary Industry and acceleration in Money stock growth and speculation of a sales tax hike delay leading to snap elections.

Note government spokesman Suga denying media reports on a sales tax-hike delay, saying up to PM Abe on parliamentary dissolution and snap elections while BoJ board member Miyao said economy recovering moderately and with a high chance BoJ can start debating exit strategy in H2 2015 when inflation target expected to be reached. BoJ Governor Kuroda said too early to discuss exiting easing.

This morning Europe, and Germany’s woes in particular highlighted with German Wholesale Prices falling negative in October. Note also news of 5 Banks including RBS and HSBC being ordered to pay around $3.3bn for their part in manipulation of benchmark foreign exchange rates. Banking legal problems not over till they’re over.

In focus today will be the UK Unemployment Report and BoE Inflation report with expectations for a fall in claimants and claimant count as well as an improvement in the unemployment rate as a whole. While average earnings are seen rising this is still at a pedestrian rate versus inflation.

Expectations for a UK rate hike already pushed back to mid-2015, but confirmation sought from report after soft pay and inflation data (forecast likely to be cut), allowing stimulus/accommodation to stay in place for longer than thought. GDP forecasts also expected to be cut in light of global prospects impact domestically.

Eurozone Industrial Production seen rebounding in September while US Wholesale Sales are seen less weak in September although Inventories growth should be muted.

In commodities, Gold seen a revival of interest from support at $1150/oz, fuelled by thinner equity volumes yesterday and USD strength easing but remains below week highs on expectations of US monetary policy change. Bargain hunting to take it to $1180 again?

Oil down again on signs that OPEC members remain reluctant to cut supply even with prices languishing in bear market territory. Blame pointed at US ahead of US stockpile data expected to show that a sixth weekly gain in US Crude adding to argument that rising supply outpacing demand. US Light Crude trades $77.3/barrel (above recent lows of $76) but Brent Crude slumped to $81.0/barrel.

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