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

UK 100 called to open +15pts this morning at 6590, although still struggling with the 6600 level, despite Syria situation cooling in terms of imminent action, with the clock ticking towards the Fed’s update and potential tapering next week.

Another mixed session in Asia despite the positive US close. Japan’s Nikkei hindered by stronger JPY and disappointing Machine Orders which failed to rebound as expected and despite talk of a big stimulus programme to offset the sales tax hike next April.

Australia helped by weak AUD boosting exporters, a function of a drop in consumer inflation expectations and deterioration in jobs data. New Zealand left rates on hold but suggested rate hike next year, helping the NZD. Elsewhere in Asia tech names linked to Apple shared the pain of product launch disappointment.

US markets closed up, excluding Nasdaq, weighed down by Apple’s negative reaction to product launch. Sentiment boosted stateside by strong demand for government debt, however, even this was eclipsed by telecom giant Verizon selling twice as much, completing the biggest corporate debt sale in history as part of the financing for its buyout of Vodafone’s stake in their Verizon Wireless joint venture.

ECB’s Asmussen still dovish and too early to tighten accommodative policy stances while colleague Hansson said policy currently appropriate but options available, including another LTRO – backstop still being emphasised.

In focus today we have inflation data from Eurozone members France, Spain and Italy expected unchanged if not a touch cooler. Eurozone Industrial production is seen turning down in July. US Jobless claims are expected to have ticked up last week, while US Import and Export prices are seen accelerating, the former more than the latter, a hindrance for consumers but a help for the USD.

Lots of speeches today with the ECB monthly report and EU President Barosso. The BoE’s Carney gives evidence to the Treasury Select committee with investors watching for any suggestions the bank has changed its view on forward guidance which markets refuse to believe with GBP hitting 7-month highs on yesterday’s jobs data. Note BoE’s Miles saying shouldn’t assume MPC near tightening given higher bond yields and recent strong data.

The EU parliament votes on Syria and ECB President Draghi also speaks as does Fed member Dudley ahead of next week’s potential tapering while peers remain quiet.

The UK 100 chart shows 6600 as a clear level of resistance. Topped out? Nonetheless given the limited trading range of the last 2 days, and with 6560 serving as support yesterday after Tuesday’s break up above there is still potential for good news to push things higher (6630?), with an underlying appetite still lurking. Support now 6580 maintaining trend if rising lows since 4 Sept.

In FX, USD index still under pressure, down at 81.5 levels last seen end-August, hindered by cooling in Syria situation and despite strong demand for US debt yesterday. GBP/USD broken above 1.58 and 61.8% Fibonacci retrace of 2013 Jan-Mar decline on USD weakness and UK jobs data – resistance likely 1.589. EUR/USD also benefiting from USD weakness, up at 1.33.

Gold broken below trendline of rising support at $1355. Safehaven demand eased on reduced geopolitical tensions surrounding Syria and despite weaker USD. Watch for support at $1350. If not, the level likely becomes resistance.

Oil prices settled with Brent Crude around $111.5 and US Light at $107.5 after their steep declines on a calming of the Syria situation and reduced potential for supply disruption.

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