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

UK 100 Index called to open -20pts at 6250 having twice failed to overcome 6280 overnight which maintains the trend of falling highs from 4 Nov. However, the fact we remain around the key 6250 and above overnight lows of 6225 offers hope that we are merely pausing for breath after the 4% rally off  6000 lows and that the August uptrend has legs to 6400. Watch levels: Bullish 6290, Bearish 6220.

The negative opening call comes after mixed sessions in the US and Asia with a near record high USD sending commodities prices lower (Oil back towards recent lows, Copper and Gold to 5-6yr lows), as US inflation data bolstered the case for a December rate hike ahead of Fed minutes which are expected to pave the way.

Further terror alerts have also muted overnight sentiment with the Germany-Netherlands football match in Hannover cancelled and two flights from the US to France being diverted after security alerts. Note Parisian police are raiding properties in the hunt for the perpetrators of Friday’s atrocities.

Asian stocks mixed after a late slump in the US with Japan’s Nikkei above water thanks to a strong USD keeping the JPY down, to the benefit of exporter equities, ahead of the BoJ’s latest meeting where consensus is divided about whether more stimulus will be forthcoming to fight deflation and recession..

Note Chinese stocks -1% despite property prices showing a surprise increase, begging the question have the declines finally stabilised? Are we turning a corner?  Australia’s ASX  outperforming despite commodity price pressure (Gold and Copper at 5/6yr low) helped by solid albeit sub-target Wage Price Growth data and improvement in the weak Conf Board Leading Index.

US stocks closed flat on Tuesday as volatility reigned - markets doing their best to show resilience amid uncertainty following the terrorist attacks in Paris and not helped overnight by the diversion of those two Air France planes. US data continues to be mixed with poorer macro data prints largely offset by better ones elsewhere - what that means for the Fed and its deliberations on interest rates is not clear. Indeed,  was the Monday rally partly down to hopes the Fed may hold of from raising rates in December given the increased terror threat?

The markets don’t think so as we note new commodity price headwinds with the US Dollar Basket soaring back towards a re-visit of March 2015 highs, sure to be bettered if the Fed doesn’t at least rein in its current uber-hawkish rhetoric.

In focus today, will be the Fed minutes this evening which are expected to pave the way for a rate hike next month. Before this, Fed speakers including Lockhart, Dudley, Mester and Kaplan are sure to warrant attention. Otherwise, amid a thin line-up, we have US Housing Starts and Permits with the former seen slowing but the latter gaining. With Oil prices under pressure from a strong USD and global supply glut, US Crude Inventories could both help or hinder. Another build could send prices lower, while a drawdown could perk prices up.

Crude oil inventories are expected to have grown when stockpile data is released this afternoon, yet with prices having traded near technical support this week, buyers have been active in the market which has buoyed oil a little this morning - that also despite USD pressures added into the mix. If reasons to buy have indeed been almost entirely derived from technicals, that’s fine but expect this bounce to be short-lived. The basic premise remains the same: oil prices to remain LOW for the rest of this year and well into next.

It’s like a counting game for Gold now. The yellow metal is now trading near SIX-year lows! Not long now before the word ‘cheap’ starts getting (gold)banded around no doubt, and people actually start buying the stuff. The main headwind here is of course the Dollar, so expectations remain that Gold will continue to suffer until some form of certainty returns and yes, that includes a Fed rate hike. Perhaps Gold doesn’t warrant much attention now, but around the December Fed meeting there should be some considerable, tradable volatility as well as a potential bargain investment.

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

• HICL Infrastructure sees NAV +1.8%
• Breedon says to acquire Hope Construction for £336mn
• Hikma announces resolution to FDA Warning Letter at its Portugal facility
• Informa Trading In Line With Views, Disposes of Dutch Businesses
• LondonMetric Property Buys Reading Logistics Warehouse