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

UK 100 called to open +25pts at 5945, once again up off its overnight lows but still below 5950 and yet to challenge the downtrend of the last week. This means that the bounce from yesterday’s lows may be no more than the tease we saw this time yesterday, failing to overcome 6050. The bulls will surely need a break above 5975, possibly even 6000, to be convincing of a turnaround. The bears will be watching for another break of yesterday's lows to maintain the downtrend. Note the daily RSI’s brief foray to oversold. Watch levels: Bullish 5975, Bearish 5930.

The positive market open can be attributed to Asian markets outshining their stateside peers, although gains would appear to be the more the upshot of US dollar strength than anything, providing respite to Nikkei exporters by overriding recent Yen strength derived from safehaven seeking as markets fret and sell-off.

China stocks also higher after a lower PBOC renminbi fix (lowest since Jan 2011) and despite the MSCI refusing - for a third time - to include China A-Shares in its widely followed Emerging Markets index spurring speculation of intervention by state-backed funds.

Note Australia’s ASX lower as a stronger US dollar keeps a lid on industrial commodities and miners while energy names suffer from oil's retreat taking US Crude back below $49 and Brent sub-$48 (longest losing streak in 4 months). This follows US API data suggesting a build last week ahead of official EIA US stockpile data this afternoon. An IEA report saying the Oil market will not rebalance until well into 2017 is also weighing. Note precious metals Gold and Silver still holding up well on account of safehaven seeking.

US markets finished with modest losses, with financials worst off ahead of the Fed update and despite a positive Retail Sales report and the Atlanta Fed GDP model being revised up to 2.8%.

Markets remain very cautious on account of Brexit fears and the outcome of that trio of central bank policy updates (Fed, BoJ, BoE) coupled with an increasingly uncertain outlook for global growth as event-risk looms large and the US economic recovery being called into question as data blow hot and cold.

In focus today will be the Fed policy update this evening with markets potentially adopting their traditional wait-and-see stance to digest the declines of the week derived from Brexit fears, awaiting  the most up to date words of wisdom from Fed chair Janet Yellen. Dovish? Hawkish?

With unemployment seen flat in May the UK April Unemployment report is likely to be scrutinised more for the update on Wages growth with it possibly having slowed up in April. The BoE policy update is also scheduled for tomorrow and despite BoE/TNS Inflation expectations having risen to hit the 2.0% target, any misplaced optimism about a rate hike is surely tempered by a Brexit possibility looming large.

After warning that a UK exit from Europe would make him cry, it’ll be interesting to hear if German Finance minister Scheuble has anything more to say on the matter with Brexit polls increasingly pointing to the UK waving goodbye to the European Union next Friday.

In the afternoon, US Producer Prices growth is forecast to improve, much like import prices did yesterday. Suggestive of inflation, will this send the USD Basket even higher, to the detriment of commodities even before the Fed delivers its latest view of the monetary policy landscape and reveals what its views as headwinds.

After a run of awful US regional manufacturing data last month, the Empire State - which cratered - is seen improving but remaining negative. In support of this, US Industrial and Manufacturing Production are expected to have dropped in May before US Crude Oil Stocks show what could be a fourth drawdown in as many weeks, and the fifth in six.

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

• AstraZeneca names a head for its integrated cardio metabolic centre
• Lancashire names new property treaty reinsurance underwriter at Cathedral
• FCA restores Aveva's shares after announcement by company
• Daily Mail and General Trust exec Dutton to move to Zoopla
• Rolls – Royce tells UK staff EU membership is best for company
• Oxford Instruments says fy revenue falls 4.9 pct
• Berkeley sees housing reservations fall 20 percent before UK vote on EU
• JKX Oil and Gas confirms police inspection in Poltava
• Betting odds indicate 62 pct probability of In result in Britain's EU vote – Betfair
• Aveva's shares after announcement by company that M&A talks ended with Schneider