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

UK 100 called to open -10pts at 6635 after another sell-off yesterday to touch lows of 6620 as markets tried to revive the decline from recent highs of 6690 by reacting to headlines related to changes at the top of China’s central bank and a Russian draft law on seizing foreign assets which could impact Europe, both adding to existing uncertainty on two key regions within the global growth framework.

After a volatile week, today’s major data prints (US GDP revisions, Uni of Michigan Consumer confidence) could be key in finding out whether the markets’ declines still have legs and are part of a bigger correction, or whether it is just a bit of quarter-end profit taking. More tepid opening calls reflect continued caution.

US stocks closed sharply lower, falling through some key moving averages, weighed by a sell-off in Apple shares linked to recent launch problems (software + hardware) and geopolitical concerns making their way back to the fore. US data failed to inspire (Durable Goods mixed, PMI Services fell) but did little to counter the argument that the US economy may be improving enough for the Fed to raise rates sooner than expected.

Stocks in Asia have taken the negative lead from Wall Street as lingering concerns about the path for US borrowing costs were compounded by intensification of geopolitical worries and data failing to fly the flag for global growth with Japanese CPI stable-to-slightly-lower and the China Conf Board Leading Econ Index slowing up its advances in August.

Overnight, the UK Hometrack Survey shows asking prices in England & Wales flat-lined in September for the first time in 19 months and fell in London for the first time in 21 months, after mortgage rules toughened, speculation grew of an interest rate rise (note BoE Carney’s speech yesterday) and more sellers try to cash in at the top, although uncertainty about the Scottish referendum may have held things back.

The UK 100 index has struggled to get back above 6650 overnight suggesting we may not be through with the declines of late and a revisit of the lows of near 6500 from August and earlier in the year area is a distinct possibility. The bounce of Wednesday may just have been the flag within a bigger bearish flagpole pattern starting Sept 19 and which could complete at August lows.

In commodities, Gold has benefited from risk aversion to make it back above $1225, heading for its first weekly advance this month thanks to concerns returning aplenty (growth, tension, rates).

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