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

UK 100 Index called to open +25pts at 6695, looking set for a test of 6700 and still benefiting from an ECB tag-team effort from Praet and ECB President Draghi with the former saying if oil price falls led to deflation, then impetus for ECB to act and the latter explicitly saying asset purchases ‘could’ include government bonds (QwhooppeE!) and some big M&A boosting confidence (Halliburton-Baker Hughes, Activis-Allergan).

With hopes for more global stimulus to keep the economic ball rolling now rampant following said comments and the Japanese recessionary data yesterday, mixed China data likely helps too after yesterday’s bad loans data with Property Prices weakening more than expected (second consecutive annual drop, sixth straight monthly fall) and Foreign Direct Investment slowing.

The UK 100 jump north to test 200-day moving average may not have broken us out from bearish rising wedge pattern, but appetite and direction of choice clear, with recent momentum loss serving as consolidation before another up-leg, Progress above 6600 puts us well above two lots of resistance-turned-support from Oct-13 and Mar-14. 6900 in sight for year-end? Our watch levels: bullish 6700 and bearish 6655.

US markets closed mixed on the news of Japanese recession and despite data misses (Empire Manufacturing, US Industrial Production, US Capacity use) and accommodative San Francisco Fed Research saying inflation risk still to the downside, odds twice as likely for it to remain low until end-16.

Asian markets also mixed, with Japan’s Nikkei outperforming thanks to the weak JPY on hopes of more stimulus and speculation PM Abe will announce a delay to next October’s sales tax hike delay, triggering snap elections, where he hopes to garner more support for his economic policies. Note Australia’s ASX in the red on a stronger AUD following RBA November minutes suggesting AUD overvalued not helping economy.

In focus today will be UK Consumer Price Inflation (CPI) for its impact on perceived timing of a UK interest rate rise, with expectations for barely positive reading in October. UK ONS House Prices worth keeping an eye on too (to slow or not to slow?).

German ZEW Surveys will be of interest given Germany’s recent data woes, seen delivering mixed messages with current situation down but expectations up. In the afternoon, US Producer Prices are seen remaining under pressure - a thorn in the side of Fed hawks – while the US NAHB Housing Index is expected to edge up.

In commodities, Gold has failed to be tarnished by the equities rally and the USD strengthening, holding near recent $1190 highs perhaps helped by continued short-covering of late placed bets on more heavy falls.

Oil pretty stable despite uncertainty as to what OPEC will decide about output levels next week (to cut or not to cut?) amid an environment of rising production and questionable demand. US Light Crude holds $75.5/barrel and Brent Crude $79.1/barrel.

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