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

UK 100 Index called to open -5pts at 6905 with yesterday’s sell off from 6935 (Sept highs, 17-month falling highs) retracing to 6900 where support emerged overnight. The week-long uptrend from 6640 may have legs if rising lows hold at 6890, a level the Bears will be watching carefully for clues about a reversal. The Bulls will likely be content with another rally to yesterday’s highs to finish the week, more so if a breakout allows for a revisit next week of August 6955 highs, even the 7000 level traded last May/June. Updated watch levels: Bullish 6910, Bearish 6895.

A muted start to the last session of the week comes after a mixed session in Asia followed a positive US close with Japan playing catch-up from a day’s holiday, its flagship Nikkei reacting to the BoJ’s stimulus tweak now favouring ETF purchases from its Topix sibling index. A weaker Yen and PMI Manufacturing back to growth above 50 are offering no help. Markets also continue to digest the Fed’s latest update, humming and hawing over whether it was a hawkish hold prepping us for December or a dovish hold given the cut in projections. The USD rebound is thus something to keep an eye on.

Note China stocks in the red despite the nation’s MNI Business Indicator climbing to its highest level since August 2015, driven by acceleration in new orders growth and continued improvement in manufacturing confidence. This only goes to bolster recent confidence in the world’s #2 economy that has helped commodities deliver an attractive rebound.

Note Australia’s ASX outperforming significantly (+1%), set to end a five week streak of losses thanks to higher raw materials prices helping Miners (watch those listed in London again) and Energy buoyed by Oil prices well off their recent lows although, as mentioned, the USD rebound is something to keep an eye on.

US equities maintained the rally that began on Wednesday following the Fed’s (hawkish?) hold, at one point 150pts up on the previous close, however failing where it encountered August falling highs, settling at the 18380 mark. A weaker USD helped treasuries and oil to strong gains over the course of trading, in turn helping markets to close between +0.5% (Dow Jones) and +0.8% (NASDAQ) for the day.

Oil prices declined during Asian trading hours as reports of a meeting of officials at OPEC headquarters in Vienna resulted in no major breakthroughs. This came after yet another oil minister, this time from Iraq, stated confidence that a production ceiling can be agreed upon at the unofficial OPEC meeting in Algiers next week. Surely with OPEC oil ministers queuing up to release statements of confidence, a production freeze is inevitable?

Gold, after achieving two week highs amid a brief breakout yesterday, is back facing resistance this morning in the $1335-1340 channel in response to a strengthening of the USD. A strong performance from other commodity markets today could provide the impetus for the precious metal to break above current resistance and attempt to regain stable prices around the $1350 mark.

In focus this morning will be preliminary Eurozone PMI Manufacturing and Services figures for September with updates from France (following a flat GDP confirmation) and Germany. The former is seen still struggling on the Manufacturing front but solid in Services. In contrast, the region’s economic powerhouse, Germany, should show both metrics holding firm above the key 50 mark that separates growth from contraction. A similar result is expected for the Eurozone region as a whole, but nothing to write home about yet, suggesting the ECB has work to do on the stimulus front.

In the afternoon US PMI Manufacturing is seen solid like Germany’s while the Baker Hughes Rig Count after the European close could shed some light on US production levels and those surprise US crude oil inventory drawdowns this week that helped oil prices rally ahead of next week’s OPEC-led Algiers meeting.

After ECB President Draghi pinned blame on a ‘too big banking sector’ yesterday at the ESRB annual conference in Frankfurt, listen out for what his colleague Constancio has to say in his speech about “Low interest rates and the implications for financial stability”.

Finally, as we continue to digest whether the Fed’s Wednesday update was a hawkish or dovish hold, prepare for speeches from Harker, Lockhart and Kaplan to attract attention  after the European close, investors getting their fix now the blackout period is over) however, prepare for this trio’s thought to be overshadowed by dissenter Mester, who voted for an immediate hike on Wednesday.
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UK Company Headlines: (Source: Reuters/DJ Newswires)

• UK insurer Novae Group says CFO Charles Fry to step down
• Sports Direct names controlling shareholder Mike Ashley as CEO
• Tullow confirms some insurance cover for offshore Ghana oilfield
• Indivior to defend its position in U.S. anticompetitive practices lawsuit
• K3 Business Technology appoints new CEO
• Smiths to sell artificial lift business for $39.5 mln
• Anglo American names Stephen Pearce as finance director
• Vodafone, Afrimax announce partner market deal for Cameroon
• Petromaroc says renegotiated terms of Sidi Moktar sale
• Randall & Quilter buys United States Sports Insurance
• JKX repurchases $1.4 mln of outstanding bonds maturing 2018
• London nickel set for biggest weekly gain since July on Philippine supply risks
• Oil dips on technical selling after two days of strong rises