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

UK 100 Index called to open -60pts at 6945, almost back where we were this time yesterday after a sharp overnight reversal from 7025. Trend and trend-lines unchanged, downward bias towards 2018 lows of 6840. Bulls need a break above 6960 early-hours highs before any fresh challenge on October falling resistance (now 7015). Bears need a breach of 6920 overnight lows for a re-test of yesterday’s 6885 7-month trough. Watch levels: Bullish 6965, Bearish 6915

Calls for a negative open come in spite of a Tech-led gains on Wall St with positive results from Twitter and Microsoft undone by after-hours disappointments from Amazon (shares -9% after hours) and Alphabet (-5%) both offered uninspiring outlooks. Asia dented as a result, putting equities back in the red (ex-ASX, just shy of flat).

USD strong, but off overnight highs, as investors flee volatile markets for safer harbours. Corresponding GBP weakness, however, not boosting sentiment towards the internationally-exposed UK Index , the dollar weighing on key commodities like Copper and Oil. There aren’t many more lifelines for UK Index heavyweight sectors, with base metals down on China-growth worries, while oil still in the doldrums over perceived weak demand.

In corporate news this morning, RBS Q3 total income £3.6bn vs beats £3.3bn est; Operating profit £961m beats £892m est; Attributable profit £448m misses £507m est; Core Tier 1 ratio 16.7% (+60bp) beats 16.4% est. Net interest margin -8bp to 1.93% (-5bp excl. one-offs). Operating costs higher due to £200m PPI. Additional £100m impairment for uncertain econ outlook and £60m for Irish business. FY guidance reiterated.

IAG Q3 revenues +8.5% YoY (passenger unit revs +1.3%, or 2.4% excl. FX headwind), Operating profit +0.7%, pre-tax profit -0.4%; Costs +10.7% (Fuel +21.8% [fuel per unit cost +14.3%), Handling/Catering +13.7%, Engineering +5%, Wages +2%), Interim div 14.5c, +16%. Expects FY operating profit +6.8% at current Fuel and FX, implying Q4 +4.5%.

Glencore Q3 copper production +12% YoY and cobalt +44% due to restart of Katanga operations. Zinc -5% after Africa divestments (+7% after disposals). Coal +6% due to acquisitions. Oil -14% on natural field declines. FY prod. guidance unchanged (oil lower) but ranges narrowed slightly.

Takeda announces ¥500bn (£3.47bn) short-term loan to partially finance Shire acquisition (+ additional ¥500bn loan agreement to refinance new debt).

In focus today will be preliminary US Q3 GDP (1:30pm). Markets expect a sharp pull-back from a strong 4.2% in Q2 to around 3.3% annualized quarterly growth, blamed on weaker consumer spending. PCE Prices are projected unchanged at 2%,but with Core back to 1.8% QoQ (from 2.1%).

Given market concerns about US and global growth, and an unconvincing earnings season thus far, both stateside metrics could add fuel to the market correction should they disappoint or ease worries if they impress. Watch USD pairs knock-on to GBP, commodities and UK Index .

Michigan Consumer Sentiment (3pm) is forecast to confirm preliminary October figures at 99 (down from 100.1 in September and below original market expectations of 100.4), as surging inflation in the US (and Fed rate hikes) eats into disposable incomes and sours sentiment.

In terms of speakers, all eyes on ECB chief Draghi (3pm, dovish), giving a keynote lecture on inflation at the Belgian central bank. After the ECB press conference yesterday, anything new would be a surprise. Colleague Cœuré (3:15pm, hawkish) speaks on central banks at a Paris event.

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