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

UK 100 Index called to open -65pts at 6975 after breaching both 2-week rising support (7000) and last Thursday’s 6981 lows. Bulls likely need a break back above 7000, to regain the channel, while Bears will be looking for a breach of 6960 lows of 15 Oct for further downside. Watch levels: Bullish 7000, Bearish 6960

Calls for a negative open come after Asia’s rally cooled, retracing Monday’s jump amid fresh fears about global trade, geopolitical tensions and the US midterm elections. Wall St added to downbeat sentiment with Banks/Financials leading the slide as worries mount over the strength of earnings from the remainder of corporates set to report.

GBP is off overnight lows, stabilising after Monday’s sharp fall, following PM May’s update to Parliament highlighting the NI/EU border as the last major sticking point, 95% of the Brexit deal done and dusted. The UK Index is, nonetheless, weaker as China-proxy Copper and Oil prices trade lower on account of USD returning to October highs, although safe-haven Gold is higher.

Corporate news this morning includes Whitbread H1 revenues +2.6% YoY, underlying pre-tax profit +2.5% (statutory +0.2%), div +4%; UK accommodation sales +4.8% (+0.2% like-for-like), Food & beverage -2.6% like-for-like; reiterates FY guidance despite weak UK consumer; Near-term profit growth may be lower than recently.

Anglo American Q3 diamond production -5% YoY, copper +17%, iron ore -9%, manganese +6%, metallurgical coal -3%, thermal coal +13%, nickel +3%. FY copper, iron ore, coal, diamond guidance unchanged, but diamonds at higher end of range. Platinum guidance revised higher.

St James's Place 9M Assets Under Management £100.6bn, +11% YTD, +17% YoY; gross inflow +12% to £11.75bn (Q3 +7% to £3.8bn), net inflow +15% to £7.7bn, client retention 96%. the FT reports HSBC returning to US Consumer Lending (via digital platform), a decade after being forced to write off $10.6bn for a failed subprime acquisition.

Bunzl Q3 trading in-line, like-for-like revenue +7% YoY (+4% organic). Agreed to acquire Volk do Brasil, a personal protection equipment distributor (£41m 2018 rev.), subject to regulatory approval. Smurfit Kappa broke ground for new recovery boiler at Nettingsdorf Paper Mill as part of €134m investment plan.

INTU Properties expects FY net rental income growth 0-1%, with 1.5% impact from tenant failures (revised down from 1.5-2.5% at half-year results). Q3 strong despite challenging UK retail. Occupancy +0.4pts to 97%. EPRA NNNAV/share -3.9%, after 3% fall in like-for-like valuations.

Travis Perkins Q3 trading in-line, like-for-like sales +4.1% YoY, Merchants +7%. DIY challenging, but cost pressure began to moderate. FY outlook in-line. ASOS appoints Matthew Dunn (prev at Britvic and SABMiller) as CFO from spring 2019.

Plus500 expects FY trading ahead of expectations even after Q3 revenues -14%, customers -51%, active +8%, Avg rev per user -20%, Avg user acquisition cost +129% following Aug regulation changes. Entered Q4 with momentum, helped by higher volatility; Continuing to assess for 2019.

In focus today, in terms of macro data, will be Eurozone Consumer Confidence (3pm), projected to hit 18-month lows amidst Italian budget crisis. In the UK, CBI Industrial Trend Orders (11am) are forecast to rebound from September lows. Across the pond, the Richmond Fed Manufacturing Index (3pm) is expected to pull back from last month’s strong showing.

In terms of speakers, Bank of England (BoE) Governor Carney (4:20pm, centrist) is in Canada, but a machine learning conference means policy comments may be lacking. Colleague and Chief Economist Haldane (11:30am, hawkish) speaks at an OECD seminar.

A few Fed members speak throughout the day, including Kashkari (2:30pm, dovish, non-voter), Bostic (6:30pm, dovish, voter), Kaplan (7:30pm, dovish, non-voter) and Evans (11:15pm, dovish, non-voter). Watch their remarks for potential impact on USD and GBP/UK Index knock-on.

We are nearing the peak of Q3 reporting season with many big name US corporates scheduled, including Caterpillar (China and global growth barometer), Lockheed Martin (read-across for BAE Systems?), McDonald’s and Verizon Comms.

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