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

UK 100 called to open -50pts at 6670, holding December’s downtrend, in the middle of a 6600-6725 range, but well off 6601 overnight lows. Bulls need a break above 6680 overnight highs. Bears require a breach of 6665 intersecting support. Watch levels: Bullish 6685, Bearish 6660

Calls for a negative open come after US equities gave up another 2% on Friday, going even deeper into bear market territory, and Asia traded mixed overnight; China and Australia higher, Hong Kong Lower, Japan closed.

Markets still under pressure from last week’s more hawkish Fed update, exacerbating fears about slowing growth and more expensive refinancing following years of stimulus. This is on top of pre-existing trade war fears with the US Trade Secretary saying “All auto tariff options still on the table”. That said, China says it will remove some import and export tariffs on 1 Jan which has helped improve sentiment overnight.

Countering this nugget of positivity, however, we have; 1) a US government shutdown (Senate Democrats refusing the President’s demands for border wall funds); 2)  US Defence Chief leaving even earlier than expected, and; 3) Treasury Secretary awkwardly calling Bank executives about market stability after a) market sell-off, b) government shutdown, and c) rumours the President  asked if he could fire Fed Chair Powell. Mixed signals aplenty!

In corporate news this morning Anglo American gets approval for Minas-Rio step 3 licence in Brazil; Expects 2019 production of 18-20m tonnes (prev 16-19m). Costs $28-31/tonne (prev $30-33). Whitbread says Costa sale cleared by EU; aims to buy back up to £500m of shares in Jan. Man Group doubles buyback to $100m through May 2019.

Standard Chartered to extend 'US Deferred Prosecution Agreements' until March 31, 2019. In Talks With Relevant Authorities to Resolve Investigation 'as Soon as Practicable'. Ratings Agency Moody's downgrades Standard Chartered's subordinated debt ratings; all other ratings affirmed.

Tritax Big Box REIT completes contracts for forward funded development of new logistics fulfilment centre near Durham, pre-let to financially robust world leading retailer. Maximum commitment £147.3m, reflecting net initial yield of 5.25% (net of standard acquisition costs).

In focus today as far as data is concerned, on this holiday shortened day (UK equities close 12.30pm) we have only the Chicago Fed National Activity Index (1.30pm) this afternoon, which bounced back from lows last month to regain its 0.25 average. Consensus expecting flat

The rest of the week includes US S&P Case Shiller House Prices, Richmond Fed and API Oil Inventories on Wednesday, although UK markets will remain closed for Christmas.

On Thursday China Industrial Profits could influence Mining shares and sway risk sentiment as UK equity trading resumes after the Christmas holiday. UK ex-dividends include British American Tobacco (1.9%), BT (1.9%) and Dixons Carphone (1.8%). Other data comprises US Consumer Confidence, US House Prices and US New Home Sales.

Friday data will be made up of UK Mortgage Approvals, which could move Housebuilders and Banks shares, as well as German Inflation and, from the US, Chicago PMI, US Pending Homes Sales and EIA Oil Inventories.

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