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

UK 100 called to open -45pts with Asian markets weak thanks to a negative handover from the US (see below) which intensified after Japanese trade data showed a plunge in July exports, signalling continuing global world weakness, most notably from neighbouring China, but also from the US and Eurozone where growth remains hampered by a slow recovery/double-dip recession. PC seller Dell reported worse-than-expetced results and cut guidance. The Greek PM has also told the German press that his country is asking for more time, but not more money (ahem – “time IS money” Mr Samaras).

US markets closed in the red with no real fundamental news behind the sell-off as most await (again) the US Federal Reserve (Fed) Open Market Committee (FOMC) minutes this evening for any hints at more monetary stimulus (QE) which would boost risk appetite. I know, how many more times can we write that? How long do we keep waiting? August obsession or one for all of Q3 or even through US elections in November?

There was talk of Apple proposing a stock-slit which saw the Nasdaq pull back (clutching at straws in low August volumes after setting record for company value at $624bn?) which out-did news that Syria’s deputy PM might be ready to begin talks upon the resignation of ruling Assad, and Greece’s finance minister saying Greece aiming to increase government spending cuts in order to offset lower income from taxes (the austerity/growth conundrum in all its glory).

The possibility that the European Central bank (ECB) places a cap on Eurozone sovereign borrowing costs (yields) for troubled nations (Spain, Italy) still being recycled and denied (decision denied, but idea not) by the central bank. China stimulus still being talked of with a report from S&P saying the country has the option to launch another huge stimulus package (like that of a few years ago) later this year of economic growth deteriorates sharply. So that’s another set of stimulus we can pine for though to Christmas. It could help maintain risk appetite though.

Conflicting comments from Eurozone politicians picking up pace as they return from holidays; some supportive of recent hopes, some quashing them. Looking at the negative call for this morning in the context of the recent movement, the UK flagship index remains in its August sideways channel between 5815 and 5875.

In the Commodities space Gold is testing June highs of $1640/oz on (guess what?) monetary stimulus hopes). Could it recover back to April/May highs around $1670/80? Brent Crude solid around $114/115, still in uptrend, but taking a breather. US light crude off highs near $98, but still in 1-month uptrend.

In FX, GBP/USD stronger reacting to possibility of QE from the US weakening the greenback. EUR/USD fallen back from highs as excitement over Eurozone progress tempered. USD/CHF fallen back to 1-week lows but near three-month rising support. USD/JPY bounced after 2-day decline. GBP/EUR weaker again overnight, but bounced off 2.5 month rising support.

Another quiet day in terms of macro-economic data, but watch out for US Existing Home Sales which are seen rising in July. In the evening, listen out for the minutes from the US Federal Reserve’s (Fed) monthly Fed Open Market Committee (FOMC) minutes regarding interest rates and most importantly quantitative easing (QE). Any more hints in the text this month?  Or will we have to keep waiting?

Results out from BHP Billiton (BLT) this morning shows a beat for profits (but not dividends), however the company has said it is reviewing capital expenditure plans in light of tough macro environment which may dent sentiment.

As always, speak to your trader for a chat about the markets and what you like to trade.

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

• Japan               Merchands Trade Balance                 Worse
• Japan               Merchands Trade Exports                  Worse
• Aussie              Westpac Leading Index                       Growth, but slower
• See Live Macro calendar for all details

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

• BHP Billiton delays $20bn Olympic Dam project, H2 profit -35%
• Stagecoach says Q4 trade solid, sees FY in line with view
• Derwent London EPRA NAV p/share +4.1% to 1,770P
• Hochschild first half profit drops, maintains dividend
• Melrose Resources says well set for gearing targets
• Vitec first-half pretax profit +15.1%
• Soco International profit rises
• Spirax Sarco profit drops, co cutting costs in Europe
• Carillion H1 profit up despite revenue fall
• Kenmare Resources posts first-half profit