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

UK 100 Index called to open +80pts at 6225, having made a stunning turnaround and bounce off 6000 yesterday, retracing much of last week’s losses and keeping the late-August uptrend alive. While we regained the index’s 6250 hinge-point for 2015 overnight, the level has proved a hurdle and the trend from Apr/May/June remains southerly. Breakout or pull-back? Watch levels: Bullish 6260, Bearish 6195.

The positive opening call comes after the global rebound gained momentum, with futures tracking a US rally last night and Asian stocks rising their most in 3 weeks overnight as investors opine that the Paris attacks will not derail economic recovery, even if the Travel sector is impacted short-term.

It’s a sign of the times how easily markets can digest such geopolitical horrors and demonstrate such resilience in the face of atrocity and stock market gains comes in spite of lingering worries about a slowing China (Copper fresh 6yr lows) and the USD hitting new highs as traders price in a December US rate hike and global central bank policy divergence.

Japan’s Nikkei handsomely in the green, despite yesterday’s recessionary data, helped by a weaker JPY giving exporters the usual fillip while Australia’s ASX is the regional outperformer after RBA minutes struck an upbeat tone despite low inflation, and reiterated scope for further policy easing. Gains down-under also comes after Oil picked up on supply concerns and despite the raw materials space remaining under considerable pressure on China and oversupply concerns.

US stocks staged a defiant bounce on Monday following initial geopolitical jitters - the recovery pushing the major US averages well into positive territory for the day. November’s Empire Manufacturing improved but missed consensus, putting pressure on the oil price from a demand perspective.

Markets now fixing their gaze back onto the Fed for clues about a December rate hike. Note ‘not all Fed speak is equal’ according to the Wall St. Journal with some chat emanating from near the consensus-driven FOMC’s centre while other officials airing more personal views from further out that are likely at odds with the probable course of action. Perhaps unsurprisingly, Janet Yellen herself is seen as the most useful gauge of future Fed policy moves. That said, trade what you see, not what you want to see...

Note the ECB’s Coeure seeing ‘no major signs’ of Eurozone equity overvaluation apart from some little bubbles developing in some markets…! Also talk of a ‘Greek Deal’ gracing the wires once more (we missed you, Greek Deal!).

In focus today will be UK Consumer Price Inflation which is expected to have returned to positive in October, although still negative on an annual basis and the Core figure only half way to the BoE’s 2% target. Other inflation data is likely to show Producer Prices under continued pressure. ZEW Survey data for Germany is seen mixed; Current flat, Expectations rebounding.

In the afternoon, US Consumer Price Inflation is forecast to vindicate Fed Chair Yellen’s suggestion of a US rate hike in December, with October data back positive and the annual figure up a notch (commodities price declines gradually petering out). Industrial Production seen rebounding in October.

Crude Oil prices took a round trip yesterday amid market confusion - geopolitical tensions in the Middle East vs. continued global oversupply/under-demand. Interesting to note western forces blowing up IS oil assets overnight - disturbing if that had a hand in oil’s afternoon recovery, but we note technical support kicking in once more around the low $40s for both Brent and WTI, likely tempting buyers back to market.

Gold is as gold does these days, now having sunk to 5-year lows. Safehaven demand faded through Monday keeping alive the 15-year trend  of increasingly short-lived market reactions to terror-related incidents. With eyes back on US interest rates, note futures data pointing to a 66% chance of a December hike - at odds with the WSJ survey of economists a week ago that found 92% of economists expectant of lift-off.

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

• EasyJet confident on future, orders 36 more A320s

• Crest Nicholson on track to report revenue of £1bn by 2016

• Kaz Minerals reaches payment deal with Aktogay project contractor

• Paddy Power sees mid to high single digit rise in FY op. profit

• Devro says FY outlook remains unchanged

• Spirax-Sarco says FY outlook unchanged

• APR Energy signs extension of 102MW Myanmar project through 2016

• TT Electronics sees reduction in cost of operational improvement plan

• Big Yellow says H1 adj. pretax profit up 30%

• British Land first-half pretax profit rises 10%

• Halma says H1 revenue rises 11 percent

• COFCO chairman says Glencore not selling stake in agriculture assets