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

UK 100 Index called to open -35pts at 6880, with a last ditch effort to recover 6900 late yesterday failing to hold overnight before another leg lower. A breach of 6900 can now be confirmed which extends the current downtrend to nine sessions and takes us from October’s 6900-7100 range back to that of late September at 6770-6900. Bulls will be hoping for any attempt to regain 6900 while bears would welcome 6850 and lower with open arms. Watch levels: Bullish 6915, Bearish 6865.

A negative open comes after losses in Asia, and a rush to safehavens like Gold and the Japanese Yen currency, that eclipsed a jittery US session. Anxious investors the world over are pricing in an even tighter US election race, with increased fears of a Trump win next week and the political, economic and market uncertainty that would surely ensue. The probability of a Clinton win may remain high but a blindside Brexit result is also still very fresh in the memory of market participants.

At the same time we are but hours away from the latest US Fed monetary policy update. Will it continue to point to another December rate hike, to maintain its gradual path to normalisation? Is macro data good enough? Chair Yellen says politics play no part in its decisions, but surely the latest US election polls aren’t something it can afford to ignore if it wants to avoid another market tantrum.

Japan’s Nikkei is underperforming in Asia from fresh demand for the Yen currency as a safehaven alternative to Gold and a drop in consumer confidence. Yen strength is delivering its usual hindrance to the index’s exporting contingent. Australia’s ASX is bloodied by shocking Building Approvals data while Oil’s decline weighs on Energy and a reversal by base metal prices impacts the Miners.

US equity markets closed Tuesday’s session posting slight losses, as election concerns eclipse earnings season. Pfizer led losses on the Dow Jones as the pharmaceutical giant missed expectations, whilst the S&P pared earlier gains to dip below 2100 for the first time since July as 10 out of 11 sectors posted losses (Energy providing the buck to the trend) and the Nasdaq closed around 1% lower.

Crude oil prices have held steady overnight despite weekly API Inventory data showing a 9.8m barrel build, nearly 10x greater than the 1m build expected as markets warm to an official agreement from OPEC members on a long term strategy. The halt to the oil price slide that started on Monday will be welcomed by investors with weekly DOE EIA inventory figures eagerly awaited this evening. As always, expect a running commentary of the latest developments of the potential production deal from OPEC (and non-OPEC Russia) officials and oil ministers alike throughout the day.

Gold price has rallied significantly on news of the tightening race for the White House, as an ABC/Washington Post poll shows Trump taking the lead for the first time since May. Reaching one month highs having broken out of four week rising resistance it seems investors are entirely disregarding the possibility of the Fed hiking rates this evening, as the meeting is eclipsed by an election now only seven days away and the USD Basket retreating to mid-October levels.

In focus today will of course be the US Federal Reserve FOMC policy update, with the committee’s decision being delivered at 6pm. Expectations are for Yellen et al. to hold rates at 0.5% on the eve of an ever tightening US Presidential race but markets will as always, be on the lookout for any hawkish confirmation of a December rate hike.

Elsewhere, macro data this morning provides a raft of European Manufacturing PMI figures, the data from Spain, Italy, France and Germany all expected to improve on last month (most notably French figures becoming expansionary at 51.3 from 49.7 in September) while the headline Eurozone figures are also forecast to increases from 52.6 to 53.3.

Also this morning, German Unemployment data is seen flat whilst followers of UK Housebuilders will be hoping UK Construction PMI will be able to meet or beat forecasts after House Price Index data missed earlier this morning, with the data seen to slightly decrease from 52.3 to 51.8.

US macro data begins with ADP Employment Change for October (NFP warm-up?) is expected to come in slightly increased on September at 165k. Only hours before the Fed report, the ISM New York Business Conditions Index looks to break the expansionary 50 mark from 49.6 in September, followed 45 minutes later by the weekly DOE EIA Crude Oil inventories. Can another surprise drawdown help to prop up languishing crude oil prices? Or will it reflect last night’s API data showing a build 9x greater than expected?

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

• Ryanair says Oct traffic up 13 pct to 10.9 mln customers
• Persimmon says sales rose after EU referendum
• Next sales dip in third quarter, maintains profit forecast
• Just Eat nudges up full – year revenue and earnings guidance
• OneSavings Bank 9 – month underlying loan book jumps 13 pct
• British house price growth runs out of steam in October – Nationwide
• EasyJet CEO says France demand recovers to pre – attack levels
• EasyJet seeks non-UK licence following Brexit vote
• DNO and Genel receive $31 mln in Tawke payment for August
• Anglo Pacific sees 2016 royalty income above expectations
• Lufthansa trims growth plans further in Q4
• Pfizer vaccine Prevenar gains approval in China
• Rolls – Royce appoints Andreas Schell as CEO of Power Systems unit
• Kerry Group sees FY EPS growth at mid to lower end of guidance range
• Russia's Nordgold proposes reduction in share capital
• Copper falls back, but strong China data underpins market
• Oil extends losses after report shows surprise U.S. stocks build