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

  UK 100 called to open -30pts at 6485, and having made a second test of the 6460s, following another weak US session based on persistent fears of an early tapering of the US Fed’s QE3 stimulus programme next week, derived from better US macro data and the likelihood of a US budget deal avoiding another government shutdown.

 Speculation of musical chairs at the Fed, with talk of Stanley Fischer, who famously took the top job at the Israeli central bank and successfully helped the country through the crisis, could replace promoted Janet Yellen’s vice chair position.

 Also note chatter of Bernanake stepping down next week (6-weeks early), if successor Yellen gained full Senate approval, allowing her to chair the December FOMC meeting. Why though? What’s the rush? FOMC planning to taper and he doesn’t want to be the one to kick it off, leaving that for incoming Yellen?

 Asian bourses weak again with Nikkei the underperformer as risk aversion carried through from the US despite overnight data being largely positive with an improvement in the US monthly budget deficit, a rise in Aussie inflation expectations but mixed employment data from down under and a hawkish statement from the NZ central bank.

 Having been 10x oversubscribed, Hilton Worldwide (HLT) has priced its IPO at $20/share ($19.7bn market cap), towards the top end of the $18-21 pricing range and raising $2.3bn. Trading starts on the NYSE this afternoon.

 In Europe note talk of the ECB getting tough on capital requirements for sovereign debt (no longer risk free), forcing banks to hold more capital and to stop them taking central bank liquidity and hovering up the cheap distressed debt of crisis hit countries.

 In the UK Index quarterly reshuffle, note Royal Mail (RMG) going straight into the UK 100 and Ashted (AHT) being promoted. This is at the cost of Vedanta Resources (VED) and Croda (CRDA) who drop into the , and index which sees a host of changes. Changes applicable at the start of the Christmas week.

 In focus today we have French CPI seen improving to flat in November, Eurozone Industrial Production expected to have shown a recovery in October. Italian CPI seen confirmed as having worsened in November and the ECB monthly report will be of interest given the focus on a struggling region and desire for clarity on potential new stimulus measures.

 The US returns with some data including jobless claims seen back above 300K but continuing claims still well below 2.8m. US Retail Sales seen accelerating but flat ex-Autos. To close the day, US Business inventories growth seen cooling in October. Plenty of speakers to spice things up today with ECB President Draghi and fellow ECB members Liikanen and Asmussen.

 The UK 100 made a full retrace to the lows of last week to test 6465. Accelerated falling highs still in place around 6540 and the breached falling lows of yesterday could revert to resistance around 6500. Santa Rally? Bah! Humbug!

 In FX, the USD dollar still below 80.0 despite the prospect of tapering and optimism on a budget deal. Downtrend continues. GBP/USD bounced off 1.635 after hitting 1.645 despite weaker USD and GBP bullishness. EUR/USD touched 1.38 yesterday and remains in uptrend.

 In commodities, Gold weakend back from the spike yesterday morning, benefiting from the weaker USD. As highlighted, declines slowed up just ahead of $1250 with the level now potentially reverting to support. Resistance $1270 then $1290.

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