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

UK 100 Index called to open -10pts at 7515 after an overnight rally from the floor of an emerging 7500-7540 falling channel, however the index is struggling to overcome falling highs at 7515. Bulls want to see this resistance overcome for a return to the channel ceiling at 7530, while Bears look for overnight rising lows to 7510 to give way for a return to the channel floor. Watch levels: Bullish 7520, Bearish 7510.

Calls for a negative open come after US bourses retreat overnight and despite a largely positive lead from Asian markets. General Electric shares slid over 6% as mounting concerns about the security of its dividend inspired a fresh bout of selling, with the company’s worst session in 6 years dampening general sentiment on Wall Street, highlighted by the Dow Jones snapping a 6-day win streak.

Japan’s Nikkei has extended its winning streak, enjoying the continued welcome reception to PM Abe’s re-election, while the inclusion of comments from Premier Xi in China’s constitution - the first time a living leader has done so since Mao - has all by confirmed his second 5-year term as head of the Chinese communist party. This has helped to buoy mainland Chinese markets, however Hong Kong’s Hang Seng falls as Financials weigh.

A busy morning for corporate news sees Anglo American lower its FY Platinum guidance while increasing Iron Ore guidance despite Q3 production at its key Kumba mine falling by 2%, Copper production up 5%; Bunzl reports underlying Q3 growth of 5-6% and revenues up 11% YoY, expects to make more acquisitions in coming months; St James’s Place reports AUM jumping by 20% in Q3 thanks to high customer retention and strong inflows; Whitbread reiterates its FY guidance after H1 results seen largely in-line, increases dividend by 5% following 20% jump in pretax profit; Carillion sells a portfolio of Healthcare contracts to Serco for £50.1m; Saga Chairman to retire after 14 years at the helm and 26 years at the company.

As mentioned above, US equity markets retreated on Monday as General Electric’s sell-off weighed on wider market sentiment. The Dow Jones closed 55 points lower as the heavily weighted Boeing, Goldman Sachs, McDonalds and IBM all dipped, while the S&P 500 dropped 0.4% and the Tech-focused Nasdaq fell 0.6%.

Crude Oil prices are marginally higher overnight as the US dollar traded lower overnight, however both Brent and US crude remain a distance from yesterday’s highs of $58 and $52.4, respectively. Gold is also welcoming the lower US dollar, testing falling highs resistance at $1281 to confirm a potential bullish falling wedge pattern to $1320.

In focus today will be a range of Manufacturing and Services PMI readings from across the globe. Kicking off in Europe, French, German, and headline Eurozone prints (8-9am) are all seen retreating in October, with both French and EU Services falling from a 4-month high while the German equivalent drops from a 6-month best, and all three Manufacturing prints pulling back from 6-year highs.

This afternoon, US Manufacturing (2:45pm) is seen rallying to an 8-month high, while Services continues to turn back from August’s 2-year high. Finally, the Richmond Fed Manufacturing Index (3pm) is forecasts to fall from September’s 7-month high of 19, although is expected to remain above its 12-month average of 15.

With central bankers continuing to shy away from the spotlight ahead of a range of policy updates over the next fortnight, the solitary speaker of note today is UK Chancellor Hammond (11.30am), with markets likely to scrutinise the outing for any sign of potential concessions in Brexit talks that could benefit the UK economy.

Note that over a third of the weighting on the Dow Jones are reporting today, with 3M, Caterpillar, McDonalds and United Technologies all releasing figures before the US market open at 2:30pm.

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