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

UK 100 Index called to open +16pts at 7066, maintaining its sideways bearing of the last fortnight. Bulls require a break above 7070 to better the 7062 overnight peak and falling highs resistance since last Tuesday. Bears require a breach of 7045 to engineer a retrace towards Friday’s lows. Watch levels: Bullish 7070, Bearish 7045

Calls for a positive open come after a strong start to the week in Asia, China having its best day in 2½ years, continuing Friday’s recovery rally thanks to regulators offered more help to mainland equities following disappointing GDP. Australia more downbeat amid political uncertainty, but dual-listed Miners marginally higher on the back of the China rally.

In corporate news this morning the Financial Times reports Lloyds Banking preparing to double share buybacks to £2bn in 2019, alongside a consensus 8% increase in dividend.

Gambling companies will be sensitive to the UK Chancellor’s plans to increase remote gaming duty from 15% to 25% in next Tuesday’s budget, to offset lost tax from recent stake limit changes on Fixed Odds Betting Terminals, a double-whammy for operators.

Ryanair H1 revenue +8% YoY, traffic +6% (96% load flat), net profit -7%, avg. fares -3%, staff +33%, fuel +22%. Laudamotion Q2 loss €35.6m; to lose ~€150m in first year exceptional start-up costs. FY profit guidance (cut 3 weeks ago) unchanged at €1.1-1.2bn; buybacks on hold pending Brexit; still cautious on outlook..

NMC Health upgrades FY guidance thanks to strong H2 organic growth. Revenue now expected +24% YoY (vs +22% prev.), EBITDA expected $480m (+35.8% vs +31.6% prev.). BP gets approval for two wells in Alligin field in North Sea (20m barrels/annum), 2020 target for oil to come on stream.

AstraZeneca cancer treatment Lynparza (developed with US Merck) Solo-1 Phase III clinical trial confirmed meaningful improvement, 70% reduction in ovarian cancer, with 60% of patients progression-free at 3 years.

Lonmin Q4 production flat YoY hitting FY guidance; Sales largely flat; secures $200m funding from Pangaea Investments; will settle pre-existing $150m loan and cancel all pre-existing undrawn facilities with Rand/Dollar lenders. Petra Diamonds Q1 production +21%, sales +7%, revenues +22%, prices -5%; on-track for free cash flow in 2019.

CRH completes €350m phase two of €1bn share buyback; €300m remains under consideration. QinetiQ to buy military-training company Inzpire for £23.5m; 85% stake today, other 15% in 2 years. B&M European Value Retail buys France's Babou Stores (95 outlets) for €91.2m.

Alliance Trust sold Alliance Trust Savings to Interactive Investor for £40m (above £38m fair value); proceeds to be invested in global equity portfolio. Deal subject to approval. Equiniti has reclaimed £1bn in unclaimed assets for investors through its ProSearch business.

In focus today, in a slow start to the trading week, will be the Bundesbank Monthly Report (11am), potentially useful as a barometer for the state of the European economy amid an Italian fiscal crisis. This afternoon it will be interesting to see whether the Chicago Fed National Activity Index (1:30pm) moves after a flat two months..

No other major data scheduled for today, but the rest of the week offers us the likes of Eurozone Consumer Confidence (Tue, 3pm), expected to make another 18-month low, Eurozone and US October PMIs (Weds) and US Q3 GDP growth (Fri, 1:30pm).

The week’s main event, however, is the ECB Monetary Policy Update (Thurs, 12:45pm). No rate changes are expected, in line with still dovish policy, but the press conference (1:30pm) is sure to see President Draghi pressed for comment about the impact of the Italian budget standoff and US-instigated trade war on European price stability. Watch EUR pairs and continental equities (DAX, STOXX Europe 600, etc) for reaction.

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