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

UK 100 Index called to open -5pts at 6195 after a flat US finish as investors maintain a very cautious stance on global growth outlook (US, Eurozone, China), the risk of another Eurozone crisis (fuelled by deflation; sovereign yields rising again) anxiety over the spread of Ebola, new and existing Geopolitical tensions and Q3 results disappointments with Google -6% after hours after missing estimates due to slower click growth and margins hurt by higher costs.

After an earlier market sell-off not for the faint hearted, better than expected US data helped major indices off their afternoon lows with jobless claims, Industrial/Manufacturing production and the Philly Fed all beating consensus, however, the latter gave up ground in October along with the NAHB Housing index.

Afternoon/evening sentiment also helped by the Fed’s Bullard easing nerves about a stalling economy by saying the Fed should consider delaying ending QE this month. With Fed Chair Yellen speaking later are we back to hanging on the Fed’s every word? Staying with QE, the BoJ’s Kuroda reiterated to parliament overnight the bank will continue to ease until 2% inflation but too soon to discuss exit strategy.

Asian stocks trading mixed with Australian stocks higher thanks to some bargain hunting and hopes of more stimulus in China, its biggest export market, after China’s MNI Business Indicator deteriorated in October and the China Securities Journal reported the PBOC is expected to step up monetary policy easing. China’s leaders meet next week which may give clues on addressing the slowdown and Q3 GDP is seen slowing on Tuesday.

Japan’s Nikkei well in the red on global growth jitters and Stronger JPY (via weaker USD due to hopes of US delay to rate hike/QE end) hurting exporter equities.

The UK 100 index looks not dissimilar to this time yesterday with a late recovery finding resistance overnight – this time at 6200. While it certainly was a right old rout yesterday, and the Bulls maintain we’ve seen the worst, there is still the very real possibility we revisit 6000 June 2013 lows given the uncertainty and volatility in the market. The 1-month graph speaks volumes with successive southerly jaunts. Our watch levels move to a bullish 6250and bearish 6075.

In focus today: US Housing Starts and Building Permits are expected to shows rebound in September after sharp contraction in August. The print will serve as a demonstration of consumer confidence, in addition to the preliminary results of the Uni of Michigan Survey which close the week for data. Fed Chair Yellen speaks again and we have results from US Bank of New York Mellon and Morgan Stanley.

In commodities, safehaven Gold maintains its uptrend from 6 Oct lows and trades below a 5-week high headed for its first consecutive weekly rise since July amid speculation of a global slowdown led by Europe may prompt a delay in raising US borrowing costs. The rout in global equities, Crude oil and base metals has boosted haven demand.

Oil has recovered from its test of below $80 as Goldman Sachs contested the view that the market was oversupplied, however, the black stuff is still headed for its third weekly loss and remains in bear market territory due to speculation that OPEC will hold off from supply cuts.

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