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

UK 100 called to open +20pts at 6754, clawing back some of yesterday’s losses, fears that the Fed might, after all, begin tapering its asset purchase programme sooner rather than later caused indices in the States last night to sell-off. The Dow Jones was down 72 points at 15,545 whilst the S&P was down 6.7 points at 1,756.

A mixed session in Asia is seeing Japan’s Nikkei down 126 points at 14,201 whilst China’s Hang Seng was recently up 73 points at 23,280. The main reason for the sell-off in the Nikkei was thanks to Sony cutting its profit forecast and the yen strengthened against all of its major peers.

Overnight data saw China Manufacturing PMI for October rise to 51.4, its highest reading since August 2012 from 51.1 in September whilst China HSBC/Markit Manufacturing PMI for October also climbed to 50.9 its fastest pace in 7-months from 50.2 previously.

In focus today is the Q3 trading update from Royal Bank of Scotland (RBS.L) and at first glance it looks to have missed analysts’ forecasts. Yesterday the Telegraph suggested the 81% government owned bank would report a profit of £400m for Q3 yet Sky News reports a loss of £634m this morning missing by over £1bn.The bank has avoided a good bank, bad bank split, but has internally ring-fenced £38bn of bad loans they expect not to be repaid. The bank also set aside another £250m for PPI mis-selling.

The UK 100 has bounced off yesterday’s lows but still remains in a downtrend over the past few sessions. First level of resistance to the upside is at 6,760 before any move towards week-highs of 6,820 can be seen. On the downside, a break of 6,730 could see us head towards 6,700.

In FX, EUR/USD continued to weaken falling back below 1.35 as inflation slowed more than forecast and improved US macro data fuelled speculation the Fed will taper stimulus sooner rather than later.

Gold slid 2% and Silver almost 5% following the same pattern from the night before as the Fed spoke. Having found $1360 as resistance and now below the 50% Fibonacci level will this trend continue? In Oil, US Crude swung between gains and losses around $96.5 nearing a 4 month low as China’s manufacturing index countered concerns about rising crude supplies.

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Overnight Macro Data: (Source: Reuters/DJ Newswires)

• AUSSIE     PPI                           In-line
• CHINA      PMI                         Better
• CHINA      HSBC PMI                Better
• JAPAN      Vehicle Sales           In-line
• AUSSIE     Commodity index   In-line

See Live Macro calendar for all details

UK Company Headlines: (Source: Reuters/DJ Newswires)

• DS Smith trading in line with management expectations
• Gulf Keystone says Akri-Bijeel block is commercial
• Clarkson buys Gibb Tools for maximum 12.7 mln stg
• Berendsen’s third-quarter revenue rises 9 pct
• Direct Line Q3 opreating profit up 6.1 pct
• Fund firm F&C posts fall in assets, rising net inflows
• Meggitt lowers revenue guidance after tough Q3
• RBS to create new internal bad bank to house problem loans