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

UK 100 Index called to open -20pts at 7485, in a continued downtrend from Friday’s highs and with an overnight failure to get back above 7500. Bulls hope that overnight lows of 7475 can maintain the uptrend from last Wednesday’s base for another challenge on 7500. Bears need for 7475 to give way for a full retrace to 7430 or lower. Watch levels: Bullish 7495, Bearish 7470.

Calls for a negative start to the week come after Asian equities ignored Friday’s positive Wall St finish on better than expected earnings reports. Geopolitics back to the fore with all eyes on as tense Madrid-Catalonia situation, Trump’s apprentice-like Fed Chair announcement and what is widely expected to be a Bank of England rate hike on Thursday.

Japanese stocks are flat, Chinese are in the red but Australia’s ASX outperforms thanks to Energy benefiting from oil prices holding their gains (Brent above $60 and US Crude at $54). Strong USD still hampering metals prices, on the possibility of a hawkish Fed Chair choice from Trump in Powell. GBP bounce still hindering UK 100 .

In corporate news; HSBC Q3 revenues and adjusted pre-tax profits look to have beaten consensus, although both down on Q2 and with higher costs and a slightly lower core tier one capital ratio. Glencore Q3 copper production +11%, zinc +5%, nickel -2%, ferrochrome and coal flat, oil -36%; FY marketing EBIT guidance increased to $2.6-2.8B from $2.4-2.7B.

easyJet signs agreement with Air Berlin to acquire part of its operations at Berlin Tegel Airport for a purchase consideration of €40m. Millennium & Copthorne Hotels Q3 RevPAR +11.5% (4% at constant FX), like-for-like +1.4%, up in all regions except Asia + Rest of Europe. Carillion continued to perform well in H2 and results for FY expected in-line with consensus.

US equity markets closed higher on Friday as impressive results for Tech majors helped the Nasdaq Composite to rally over 2%. Tech sector strength also lifted the S&P 500 to a fresh record closing high, however results-inspired AT&T weakness spilled over into the wider Telecoms sector, tempering gains. The Dow Jones closed much closer to breakeven in comparison, with Apple and Microsoft strength offsetting a poor session for Merck and Chevron after results.

Crude Oil prices continue to trade around 2-year highs on expectations of further OPEC-led production cuts while the US dollar retreats from 3-month highs. Global benchmark Brent Crude is holding above $60 a barrel, rallying from overnight lows of $60.3, whilst US Crude attempts to regain a $54 handle having retreated from Friday’s $54.2 highs.

Gold remains in its 2-week downtrend as hawkish central bank speak and dissipating safe-haven demand dent sentiment for the non-yielding asset. The precious metal has fallen back below $1270/troy oz. from Friday’s $1274 highs, however it is yet to break its 200-day moving average which has so far proved supportive at $1267.

In focus today will be UK Consumer Credit and Mortgage Borrowing (10.30am) for signals on both consumer confidence and any potentially overleveraging ahead of a likely BoE rate hike this week. Eurozone Confidence reads (11am) are seen largely unchanged, much like this afternoon’s Germany’s Provisional October CPI (2pm).

In the afternoon, after last week’s US Q3 GDP beat on strong personal consumption, and with inflationary signals to boot, the latest on US Personal Income and Spending (1.30pm) will be looked to for evidence that a US rate hike is indeed locked-in for year-end. Following Thursday’s Kansas City Fed beat let’s see whether Dallas Fed Manufacturing (3.30pm) can do the same.

Today’s solitary speaker is the ECB’s Hanson (2:30pm), however traders should keep an eye out for a multitude of potentially market-moving announcements expected before the end of the week.

In Europe, the ongoing Catalonian crisis will likely dominate headlines as the Spanish government looks to expel Catalan President Puigdemont and regain control of the autonomous region.

Across the Atlantic, President Trump is set to announce his nomination for the next Fed Chair before he leaves for his trip to Asia on Friday, whilst on the other side of proceedings the first indictments from former FBI chief Mueller’s special investigation into Russia collusion are also expected to be released from Monday onwards.

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