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

UK 100 Index called to open +50pts at 5920, but well off its 5970 overnight highs. Importantly, however, gains failed to get as far as 6000 and the fall-back since just adds to the trend of falling highs from Monday’s best levels. This will only go to make for an even bigger ask in terms of regaining 6000 let alone bettering recent highs which themselves failed to deliver a meaningful breakout from its 3-month downtrend. Watch levels: Bullish 5930, Bearish 5910.

The positive opening call comes after European index futures tracked US markets higher. This after  yet another pointless pop north by oil, simply because one measure of US stockpiles grew (yes still growing, close to drowning in the stuff) by less than a different measure the prior day and after continued dovish commentary from Fed members

UK Index futures at their lowest since the European close with Chinese stocks having a shocker (down 5-7%) led by tech and small-caps as money-market rates surge on liquidity concerns (despite the PBOC set to inject $52bn) and the view that recent gains were overdone versus the nation’s difficult and slowing economic outlook.

Ahead of the G20 meeting of finance ministers and central bankers, the IMF has piled on the pressure, suggesting the ‘global economy has weakened further’ and warned on its ‘vulnerability to adverse shocks’ with ‘bold action needed’. Is that a pop at host China to get its house in order and stabilise the Yuan which is adding to market volatility along with oil?

Japan’s Nikkei is outperforming in the Far East, supported by some welcome easing in recent Yen strength, a higher oil price and despite Sharp passing into foreign hands, with Taiwan’s Foxconn winning out over the Japanese government to bail-out the troubled electronics manufacturer for $6bn. Negative comments from BoJ’s Kiuchi that QE effects are diminishing back and that negative rates could destabilise banking isn’t holding the index back.

US bourses closed in positive territory yesterday, again tracking an uptick in the oil price after DoE data showed a 3.5mn barrel increase in US crude inventories - that being about half of what earlier API data indicated, thus easing concerns of a sharper build (there, I tried to explain why oil prices went up).

The Fed’s kaplan spoke again, saying his more downbeat assessment of the path of Fed rate hikes will be evident in the minutes of the March policy meeting, that sentiment being echoed by a now less hawkish Bullard. Lacker, meanwhile, sought to reassure investors that the US economy is showing no signs of an imminent recession.

In focus today will be UK GDP Q4 figures seen confirmed at 0.5% QoQ and 1.9% YoY, while the key Services Sector is seen having accelerated in December. The troubled Eurozone, is seen posting consumer price deflation in January adding to the pressure on the European Central Bank (ECB) to deliver yet more stimulus next month.

In the afternoon, watch out for those notoriously volatile US Durable Goods Orders seen rebounding in January along with some flat House Price data  and an improved Kansas City Fed.  More Fed chatter will keep things interesting with the Lockhart and Williams up to speak.

An oil market desperate for good news saw a build in US crude inventories as a bullish signal yesterday! Whether that trend can be sustained is another question given hefty losses on the Chinese stock market overnight - will this read across to concerns about the Chinese economy and ergo oil demand? Remember there will be no production cuts. Technically, Brent has support at $34 just below 5-day falling highs while WTI is breaking down towards $31.53.

Gold is still trending up as global drivers continue to buoy demand for the yellow metal. Note Chinese market volatility could help send Gold even higher, especially if it proves contagious and spreads to EU/US markets today.

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

• • Lloyds makes new £2.1 bn mis-selling provision
  • BHP Billiton investors sue in U.S. over Brazil dam disaster
  • Ofcom recommends overhauling BT rather than splitting it
  • Relx posts FY operating profit ahead of Reuters poll
  • Kaz Minerals sees 2016 output up at least 60%
  • Capita FY profit rises, reports solid start to 2016​
  • RSA 2015 operating profit jumps to $730m
  • National Express annual profit up, confident on 2016
  • British American Tobacco's FY revenue fall smaller than expected
  • St James's Place profit beat forecasts; funds at record
  • Serco reiterates guidance for 2016 profit decline
  • Rentokil says confident of making further progress in 2016
  • Merlin Entertainments profit hurt by Alton Towers crash
  • Zoopla says number of agents continues to grow