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

UK 100 Index called to open +15pts at 6390 making more progress from its test of 6100 15-month lows last week thanks to a positive US close last night and Asia following suit overnight with US earnings news being well received and speculation of ECB stimulus expansion (corporate bond buying) boosting sentiment.

US markets moved sharply higher - Nasdaq and S&P higher for a fourth consecutive session - with stateside sentiment bolstered by Q3 earnings reports from the likes of Apple, Texas Instruments, United Technologies and Verizon, while Yahoo added to the group with shares up almost 5% after hours topping sales forecasts and showing turnaround efforts making progress.

Asian markets higher across the board taking the baton from Wall St on ECB stimulus speculation and US earnings reports. Data wise, Australian Sentiment indices remained weak and inflation benign while the Japanese trade deficit unexpectedly widened with import growth keeping pace with the rebound in exports..

For those hanging on to hopes of more stimulus note China’s Premier said the economic performance in the first nine months of the year is still in a “reasonable range”, the economy still faces downward pressure and is still taking time for reform measures to gain traction. After slowing GDP confirmed yesterday, it would appear ECB consideration of more stimulus is enough for markets to offset worries about China holding off.

The UK 100 index recovery continues having made it back to 6400 overnight where it broke down the week before last. A breakout above could help with a recovery of lost ground from September highs 6900, especially if central bankers keep opening their mouths, but a breakout is needed for it to revert to support. Our watch levels are a bullish 6450 and bearish 6350.

In focus today will be the US Consumer Price Inflation data and whether it can recover in September from a negative print in August. While the annual rate is still well off the target and unsupportive of an end to QE and upcoming rate rise, a strong print could quash this while a weak print could support recent Fed talk about considering a delay.

The latest BoE minutes will be of interest given how Haldane put markets at ease last week with talk of rates lower for longer than markets pricing in, while results from GlaxoSmithKline, Boeing, Dow Chemical and AT&T will be scrutinised for both Q3 performance and more importantly outlook.

In commodities, safehaven Gold holds near a 6-week high helped by physical demand from India (Diwali) although stuck around $1250 as risk appetite rises and demand for the safehaven wanes. Results helping global growth outlook while and monetary policy trajectory helped by speculation of more stimulus. WTI Oil is holding up around $82 ahead of the latest US inventory report, while Brent is steady around $86 despite oversupply supply concerns.

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