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

UK 100 Index called to open -40pts at 6920, continuing yesterday’s test of 2-week 6923 support and still with a downward bias towards March’s 2018 lows of 6840. Bulls likely need a break above 6935 overnight highs to give confidence in a genuine reversal. Bears need only a breach of 6894 overnight lows to open the door to more declines. Watch levels: Bullish 6935, Bearish 6890

Calls for a negative open come with most Asian markets deep in the red after last night’s bear run on Wall St put both the S&P and DJI into negative year-to-date as a mixed US earnings season fails to justify many lofty valuations. Tech led the rush to the downside, with Asian semiconductor manufacturers feeling the effects of the trade war on global economy.

Miners are the big losers in Australia, with both Rio and BHP shedding over 4% down-under as copper prices fall on global growth concerns. Oil continues its rout after US inventory build and on weaker perceived demand sending Brent Crude to its lowest since late August, which could hurt UK Index Energy. Demand for safe-havens such as Gold, Silver and the Yen remains strong.

In corporate news this morning, Lloyds Banking Q3 net interest income flat; op costs -1%; underlying op profit flat; pre-tax profits -7% to £1.8bn beats £1.7bn consensus; no extra PPI but another £100m of non-PPI remediation; net interest margin +3bp to 2.93%; Core Tier 1 Capital ratio up 1-4bp; 2018 and long term targets reiterated; CFO to retire.

After all the excitement in the banking sector yesterday (Barclays beat, Deutsche missed) UBS Q3 profits +32% this morning, beating market expectations, could benefit the sector again.

BT announces Philip Jansen as CEO from 1 Jan; Patterson to leave 1 Feb. Diageo may react to AB InBev Q3 revenues -10% (volumes -9.2%), profits -54% and halving of interim dividend.

KAZ Minerals Q3 copper production +2.5% YoY (+6.7% QoQ), FY copper guidance reiterated at 270-300Kt. Gold +0.8% YoY (+13.3% QoQ), FY gold output expected at top of 160-175Kt range. Indivior says it applauds new US opioid legislation.

WPP Q3 like-for-like sales -1.5% misses 0.3% consensus; cuts full year sales guidance to -0.5% to -1% (prev expected positive growth); US (-5.3%) and Creative weakened in Q3; confirms looking to sell stake in Kantar market research business to reduce debt.

Debenhams FY sales -1.8% YoY, EBITDA -27.5%, pre-tax profit -65.1%, net debt +16.4%. Cash exceptional charges of £12.3m, non-cash exceptional write-downs of £512.5m. Scraps final dividend. May cut up to 50 stores over 3-5 years, with low-cost approach in ~20. Note 2019 capex halved to ~£70m.

RELX 9M underlying revenues +4% (Scientific/Tech/medical +2%; Risk & Business Analytics +8%, Legal +2%, Exhibitions+6%); FY outlook unchanged. Polypipe acquired Manthorpe Building Products, a UK/Irish manufacturer of plastic and metal products, for £52m.

Hastings Q3 gross written premiums +5% YoY, net revenue +9%, customers +4%, private car market share +30bps. Claims inflation is expected to exceed premium inflation, with FY loss ratio expected at lower end of 75-79% target range.

In focus today will be the ECB Monetary Policy Update (12:45pm). No rate changes expected, in line with still dovish policy, but the press conference (1:30pm) is sure to see President Draghi pressed for comment about the potential impact of the Italian budget standoff and US-instigated trade war on European price stability.

Elsewhere, look to German IFO Surveys (9am) for indications about economic sentiment in Europe’s powerhouse economy. Both current conditions and expectations are seen weakening in October after 2 months of improved sentiment.

In the US, Durable Goods Orders (1:30pm) are expected to fall 1% MoM (tough comparable with Sept due to big aircraft orders), while Pending Home Sales (3pm) are expected unchanged, rebounding after 2 months of steep falls.

In terms of speakers, Fed vice-chair Clarida (5:15pm, centrist, voter) speaks on the outlook for the US economy and monetary policy, while BoE Deputy Governor for prudential regulation Woods (9pm, not an MPC member) speaks at a Mansion House City Banquet.

As for US companies reporting results, keep an eye out for Alphabet (Google’s parent company), Amazon, Comcast, ConocoPhilips, Intel, Merck and Twitter, amongst many others.

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