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

UK 100 Index called to open +55pts at 6905 thanks to a strong upward move in futures prices overnight that delivered a near re-test of 6920. Potential thus for a revisit of last Thursday’s 6935 September peak to challenge the bugbear trend of 17-month falling highs resistance that checked the prior rally. Bulls will be looking for a break above 6920 while the Bears concentrate on any signs that 6900 will fail to hold up. Watch levels: Bullish 6925, Bearish 6895.

Calls for a positive open come almost entirely courtesy of last night’s surprise OPEC production cut agreement. The news sent oil prices sharply higher and has helped Energy names overnight while buoying sentiment in the general commodity space.

On the face of it, a step in the right direction from OPEC, with Saudi Arabia importantly ceding ground. However, digging down it’s merely an intention to agree something concrete further down the line. Details on who will cut and by how much are distinctly lacking and only likely to surface end-November. Plenty of work still to do and enough time for a supposed ‘deal’ to be scuppered.

Forgive our scepticism but a 250K to 750K barrels per day production cut is at most a 2% cut that leaves OPEC output close to its current record highs of 33m/day. And with non-OPEC still pumping strong, very little has thus been done to counter the global supply glut. Unless of course we can be sure that even more cuts (OPEC & Non-OPEC) are in the pipeline to rebalance an oversupplied market.

Short-term oil price support? Very likely. Long-term glut solution? Far from it. It reminds us rather of a Eurozone summit, agreeing a solution is needed - getting everyone excited - but requiring another summit first. Nice effort, but show us the money.

US equities finished higher thanks to OPEC’s surprise announcement of a production cap implementation in November, with big name Energy sector companies seeing strong gains in afternoon trading enjoying their best single day performance since January 14th.

Both Brent and US crude prices benefitted hugely from yesterday evening’s announcement from OPEC, gaining around 5%, although both now look to consolidate those positions as they reach one month falling highs. Although it remains to be seen whether the production cap will remain intact come November 30th, a step in the right direction is likely to be welcomed by oil investors.

Gold is continuing to consolidate its position after a breakdown of support on Monday, albeit with strong downward pressure being placed on the precious metal due to a weakening USD as the US Fed continues to be divided over the timing of the next interest rate hike. The $1320 support mark is key to seeing if the precious metal will breakdown for the second time this week and head towards September lows.

The focus today will surely be the fallout from the surprise OPEC production cut agreement. Is it really as good as it sounds? Early days yet.

The data line-up this morning comprises September German Unemployment, August UK Consumer Credit and September Business/Consumer Confidence figures, all seen stable. On a more positive note, and something that could even make ECB President Draghi smile is German inflation flat in September but accelerating over the year.

In the afternoon, US data includes the third reading for US GDP seen stronger than the second, solid personal consumption and decent inflationary signals, but flat Wholesale Inventories and Pending Home Sales.

We have a host of speakers on the slate today including the Fed’s Harker, Lockhart, Powell, Kashkari, George  and Chair Yellen. Listen out also for Eurogroup Head Dijsselbloem, the BoE’s Forbes and the ECB’s Constancio talking about monetary policy, especially after the grilling Draghi was given at the Bundestag yesterday.
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UK Company Headlines: (Source: Reuters/DJ Newswires)

• Merlin Entertainments Revenue Rises Despite Lingering Security Concerns
• WS Atkins Says 1H in Line with Views; Confident in 2H
• QinetiQ Group on Track to Meet Full-Year Expectations
• KAZ Minerals Completes Clay Plant at Bozshakol
• Capita 2H to Date Below Expectations; Sees FY Underlying Profit Below Consensus
• Imperial Brands Sees Full-Year Results in Line With Views
• Crawshaw to delay store roll – out as customers spend less
• Daily Mail says will take £50m restructuring charge
• Euromoney Institutional Investor Trading In Line With Expectations
• BHP Olympic Dam copper mine output shut after power outage
• TI Fluid Systems unveils IPO plan
• Plus500 founders raise $131m from share placing
• Oil prices climb on OPEC deal, lack of detail caps gains
• Lead rises to 16 – month high on tighter supply, nickel gains