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

UK 100 called to open +20pts at 6130, having bounced from its 1-month lows of 6100 to test late session highs of 6140. The Bears will highlight that we technically remain in a short-term downtrend until said bounce can deliver a breakout beyond 6150. The Bulls will be cheered by rising lows from 6100 even if we plateaued overnight. Although could this be a minor bullish flag pause? Watch levels: Bullish 6155, Bearish 6115.

The positive opening call comes in spite of another down day in the US and a lacklustre Asian trading overnight as investors adopt their monthly cautious stance ahead of the US jobs report. A weak US ADP print yesterday has heightened concerns about a poor US jobs report while a slightly softer Caixin China PMI Services survey overnight maintains global growth jitters and extends the region’s losing streak to seven sessions. An oil price off it lows is however helping.

While the USD rebound continues from its 15-month lows this is of no help to Japan’s Nikkei via a weaker JPY until the index repens tomorrow after a 3-day holiday. Australia’s ASX positive after better than expected retail sales and trade data, helped by a firmer oil price and and a weaker AUD on the back the USD rebound. Gains nonetheless limited by currency volatility and concerns related to the outlook for global growth and geopolitics.

US bourses had a down day again on persistent global growth concerns as oil continued to slide, this time under the added weight of a larger than expected build in US crude inventories. US data was mixed to boot, leaving little in the way of bullish drivers for US futures this morning. Look out for jobless claims data around lunchtime today as a precursor to Friday’s ever popular Non-Farms (read non-event) payrolls, while the Fed’s Bullard speaks at 1650.

Crude prices are up off their worst overnight levels after wildfires in Canada were seen to affect production there, while an escalation of violence in Libya did the same on this side of the pond.

Gold is still seen under pressure this morning, that being attributed as usual to pre Non-Farms trading (or lack thereof). We’re of the opinion, however, that employment is OK in terms of the US economic picture such that while there will be short term volatility around it, there’s little point giving this print much attention.

Better to concentrate on US inflation data which, if it starts rising, could boost Gold (an inflation hedge) much more efficiently. There is, after all, a fair amount of concern that current easy US monetary policy could lead to inflation overshooting the 2% target when it does finally pick up.

In focus today, amid a quiet European day on account of French and German public holidays, we have UK Services PMI seen flat, while US Challenger Job Cuts may more hints ahead of tomorrow’s US jobs report. Note the Fed’s Bullard speaking after the European close.

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