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

UK 100 Index called to open +20pts at 7005 following yesterday afternoon’s sharp sell off that took the index back below 7000, breaking 5-week rising lows support. A bounce overnight at 6980 support level sees the UK Index back above 7000 for the opening of the trading session, with Bulls hoping that a morning rally will take the index back into yesterday’s trading channel. Bears, however, will be hoping that another break below 7000 could form a bearish flag pattern, breaking further rising lows support at 6960 on the way to 6930. Watch levels: Bullish 7055, Bearish 6975.

A positive opening call comes after a mostly positive Asian trading session, driven by further US Dollar strengthening as the chances of a US Fed hike in December reach their highest since before Brexit. Earnings releases will once again be the focus for markets as four UK 100 components report this morning, whilst across the pond the world’s most valuable company Apple reports how it fared in the third quarter. Note, an announcement from the UK Transport secretary at 12:30pm regarding South East England airport expansion could have repercussions for UK Airlines as the Heathrow vs Gatwick debate is settled. For now.

Asian equities are mixed this morning, a positive performance from Japan’s Nikkei rising 0.7% as a result of a strong IPO showing and further US Dollar strengthening against the Yen being offset by a slowing of GDP growth in South Korea, with the Kospi index falling 0.5%. Elsewhere, Australia’s ASX index rallied 0.6% while Hong Kong’s Hang Seng index fell 0.1%.

US equity markets closed in the green yesterday although fell away from session highs towards the back end of trading as a strong Dollar and falling oil prices weighed on markets. The Dow Jones closed up 0.4% on the back of strong earnings performances from 3M and Boeing, while the S&P 500 rose 0.45% with the IT sector leading the index.

Crude oil prices are holding steady after a strong rally yesterday evening as investors cling to hopes of an OPEC production deal. Despite Iraq’s Oil Minister announcing his country was not willing to cut its output as it continues to battle IS within its borders, his Russian counterpart’s comments to reporters that he has discussed production cut mechanisms with OPEC Secretary General Barkindo helped prices to recover to remain in a steady sideways trading pattern. Gold has been buoyed slightly by increased demand, despite the strong dollar, as it is reported that depreciation in the Chinese Yuan could see investors flock to the precious yellow metal as they look to hedge against further falls.

In focus this morning is French Business and Manufacturing Confidence figures, both seen flat for October, before German IFO Business Climate, Current Assessments and Expectations Surveys are released at 9am. With all three figures seen virtually flat, can the data echo PMI figures yesterday and show a surprise expansion? Keep an eye on the European equities and the Euro foreign exchange markets.

US macro data this afternoon sees S&P/Corelogic August House Price Index data released alongside the FHFA House Price Index at 2pm, with expectations for a minor increase for the former. Any greater than expected figures (or lesser for that matter) are likely to have a bearing on Fed rate hike expectations. At 3pm, the October Consumer Confidence Index is expected to show a decline from the previous month, although remains above the key expansionary 100 figure, while the Richmond Fed Manufacturing is seen to improve to -4 from -7, and IBD/TIPP Economic Optimism is also seen improving from 46.7 to 47.5. Rounding off the day is French Jobless Claims at 5pm, predicted to produce a negative figure from last month’s 50K showing.

Several heavyweight speakers are lined up today, with German Chancellor Merkel taking the stand at 10:10am before BoE Governor Mark Carney is grilled by the House of Lords at 3:35pm. While investors will be hoping for any hint from the Governor regarding the upcoming meeting of the MPC on the 3rd November, it is likely Carney will opt for a ‘wait and see’ strategy with important macro data still in the pipeline. Following last week’s tight lipped post monetary policy meeting presser, ECB President Mario Draghi will once again be speaking at 4:30pm, any indication of tapering will once more be sought after by markets. Finally, the Fed’s Lockheart speaks after European close at 6pm which will no doubt have some bearing on Fed rate hike expectations.

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UK Company Headlines: (Source: Reuters/DJ Newswires)

• Wealth manager St James's Place in asset boost after Brexit vote
• Intu Properties sells stake in intu Bromley for £177.9m
• Intu Properties says post – Brexit consumer confidence robust, launches offering of £350m convertible bonds
• Anglo American keeps full – year output guidance broadly unchanged
• Anglo American cuts FY export metallurgical coal production guidance
• Glencore secures 48% hike in thermal coal price
• Costa Coffee owner Whitbread's first – half profit rises
• Whitbread says H1 revenue +8.1%, maintains FY guidance
• Carpetright Group keeps FY profit expectations unchanged
• Shoe Zone says seen little impact from Brexit vote in H2
• National Express Q3 profit +9% on strong overseas performance
• GKN sees 2016 as another year of growth
• Arrow Global says Robin Phipps to step down as non – executive director
• Pendragon says Q3 revenue +5.7%, post – Brexit spending unchanged
• Kazakh Kashagan field to export 500,000 tonnes of oil this year
• Bahrain's Investcorp says to buy 3i's debt – management business
• Oil prices dip on OPEC squabbles ahead of planned production cut