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

UK 100 called to open +20pts at 7018 after pulling back considerably on Friday to close below 7000, breaching support around 7050 as global indices experienced a significant wobble. Updated watch levels: Bullish 7100, bearish 6900.

The warm open comes after fears of a Greek default sent shockwaves through global markets Friday. Things recovered over the weekend, however, after news that China had applied further economic stimulus measures to boost its ailing economy distracted investors – another reduction in the reserve requirements ratio (RRR) for its banks by 1 percentage point freeing up 1.2 trillion Yuan for lending and new rules allowing mutual funds to lend shares for short selling, increasing the supply of shares to the market.

Global markets were reassured by the action, largely expected throughout 2015 and arguably already priced into the Asian markets, which remained mixed in Monday trading as a result. In Japan, BOJ Governor Kuroda spoke, saying there is “no doubt” that inflation is recovering towards the 2% target rate and that monetary easing is having the desired effect while adding that the BoJ won't hesitate to adjust if inflation strays off the path.

In Europe, Draghi rejected speculation that Greece may exit the single currency, saying that the Euro is "irrevocable" and that going short the currency is “pointless.”  The comments come amid growing concerns in the financial markets that Greece may not be able to come to an agreement with its international creditors to unlock billions of euros in bailout money that Athens needs to repay the IMF and pay its own public sector workers.

US stocks pulled back heavily on Friday, joining European peers as investors sold off fearing the imminent materialisation of a bubble market. Treasury secretary Jack Lew urged Greece to reach an agreement with creditors, suggesting that a Greek default would be a very bad thing – causing “immediate hardship for Greece” and considerable damage to the world economy. “It's something that the European and global economies don't need — to have another crisis." (Thanks for the unique insight, Jack). In Fed news, it looks as if a US rate hike is more likely than not to happen in September rather than June.

In focus today we have Eurozone Construction Output and ECB asset purchases which will report the progress of the Eurozone’s own monetary easing programme.

Oil prices rose in Asian trade after the PBoC RRR cut. A spur for economic growth in the world’s #2 economy is good for commodities since China is a major consumer, with the pace of economic growth having a direct effect on demand. US Light Crude holding above $56 at $56.55 while UK Brent trading at $64.19.

Gold ($1204) was largely steady in Asian trade despite the bold RRR cut by the PBoC announced on Sunday which should be encouraging investors back into higher risk instruments and away from safe haven assets. The yellow metal continues to trade either side of $1200 although it has held above since close of play Friday.

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Key Overnight Macro Data: (Source: Reuters/DJ Newswires)

• UK                          Righhtmove House Prices           Lower YoY increase
• Germany             PPI                                                         Miss, deteriorated

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

• Aveva Group sees FY results in – line with market expectations
• Petrofac sees further £130M loss at Laggan Tormore project
• Evraz sees second quarter steel production below first quarter levels
• Stellar Diamonds says gets 5,000 carats from trial mining at Baoulé Kimberlite
• St. Modwen names Rob Hudson as new finance director
• Kenmare Resources says temporarily repatriated workforce at Moma mine
• UK Conservatives aim to sell Lloyds shares to small investors