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

UK 100 called to up +13pts at 6772, the 1% discount of the last two sessions, coupled with the biggest weekly decline in two months, perhaps starting to tempt traders to return?

Traders will be keeping a close eye on developments in the Middle East. The Iraqi military is, for now, managing to keep Sunni insurgents from storming Baghdad whilst US President, Barack Obama has sent 275 US troops back to Iraq to protect American personnel and embassy staff in the capital city.

Seventy of the UK Index 's constituents contributed to its 23pt decline yesterday. BT Group (BT.A.L) shed 2.4% after the Sunday Times reported the company may need to increase its pension contributions.

Persimmon (PSN.L), Travis Perkins (TPK.L) and Wolseley (WOS.L) fell has much as 2% as 'risk off' behaviour continued following George Osborne's comments of last week.

It wasn't all doom and gloom yesterday. Fresnillo (FRES.L) topped the UK 100 with an advance of 1.86% as gold topped $1280. Randgold Resources (RRS.L) wasn't far behind, shares up 1.12%.

Meanwhile commodity stocks across the board enjoyed a better session, Glencore Xstrata (GLEN.L), Anglo American (AAL.L) and BHP Billiton (BLT.L) up around 1% on a cheaper US dollar.

US Stocks thankfully refused to decline, that said buying activity was hard to come by too. The Dow Jones closed up just 5pts at 16,781pts with the S&P 500 and NASDAQ both registering gains of less than 0.25% as investors kept the powder dry and adopted a 'wait and see' approach.

In Asian Markets the Shaghai Composite Index had been trading at a one-month high before an unexpected decline in foreign direct investment caused the index to slump 1%. The reading, seemingly indicting concerns among global investors as to the growth outlook for the world's second largest economy.

Commodities: Gold continued its decline from its highest level in 3 weeks as it fell as much as 0.4% to $1,267.51 ahead of the FED meeting on Wednesday. WTI Crude fell to $106.44 as a technical indicator shows last week’s increase to the highest price in nine months was excessive.

FX: GBP/EUR reached €1.256 its strongest level in 20 months as speculation the Bank of England near to raising interest rates. Yen rose against most majors on the Iraq situation. Higher by 0.2% to 101.83 against the $, and little changed at 138.22 against the € but the highest since February.

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Key Overnight Macro Data: (Source: Reuters/DJ Newswires)

• AU          New Motor Vehicle Sales                             IN-LINE
• CH           Foreign Direct Investment                          WORSE
• JP            Tokyo Condominium Sales                         IN-LINE

See Live Macro calendar for full details

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

• Premier Oil sells Norwegian licence stake to Lundin
• Ashtead Group says well positioned for further growth
• Serica buys BP's interest in North Sea Erskine gas field
• Carillion wins 70 mln stg contract in Saudi Arabia
• Crest Nicholson first-half profit up 37 pct on strong buyer demand
• Daisy Group full-year operating loss widens
• UK's Whitbread says starts year well
• BP says operations in Iraq so far unaffected by violence
• BG sells UK CATS gas pipeline stake to infrastructure fund
• Balfour Beatty selected for 30-year Canadian hospital project
• FDM Group prices shares at 287 pence in London listing
• Ithaca Energy full-year production guidance remains unchanged