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

UK 100 called to open -15pts, with no agreement (widely flagged) on Greece receiving its bailout money from the Eurogroup, with finance ministers to meet again next Monday. This likely increases worries about a Greek exit from the single-currency area. Nonetheless, IMF head Lagarde and Eurogroup leader Junker said progress had been made but technical work was still to be done, and credible ideas had been identified to reduce Athens’ debt pile.

The EU and IMF would appear to remain at loggerheads, with the IMF apparently still seeking some form of public haircut on existing debt in order to restructure its liabilities and allow the 2020 deficit target to be met. The EU looks still to be against any haircut and want the target to be 2022.

The next Eurozone summit on the region’s 7yr budget is also gaining attention with UK PM Cameron against any increase given that the UK is a net contributor, and much like Germany doesn’t want to pay for Greece’s fiscal mistakes, the UK doesn’t want to subsidise those not prepared to cut where cuts are necessary.

While Asian equities are still under pressure due to the lack of Eurozone debt crisis progress, Japan continues to outperform on hopes of unlimited easing rom the BoJ come the December election. The need for a boost was compounded by a bigger than expected Trade Deficit and exports falling for the fifth month in a row. The Yen (JOY) continues to weaken as a result.

US markets closed around breakeven after Federal Reserve (Fed) Chairman Bernanke’s speech didn’t mention the possibility of more asset purchases (QE), focusing more on the urgency needed for the fiscal cliff issue to be resolved ASAP. This was partly because he saw a resolution as a driver for good growth in 2013, but also because the central bank would be unable to offset the growth fallout if the impasse remains. He also finally suggested that the financial crisis had impacted potential for growth, having previously shied away from claims that structural damage had been done.

Overnight, macro data had Aussie Westpac and Chinese Conference Board leading Indices printing improved growth in the month. Japan’s Trade balance was well below expectations with exports to China the key drag highlighting the regional dispute over mutually claimed islands (car exports to China -80%!).

The Middle East situation remains tense, with no ceasefire between Hamas and Israel in the dispute over Gaza. More meetings in Cairo today to help avoid further conflict and indeed any ground offensive by Tel Aviv. Keep an eye on Brent Crude which is a likely beneficiary on fears of supply disruption.

The UK 100 Index made a good test of the 5750 level, but has since weakened on the absence of decision on Greece’s bailout cash. This could increases resistance at the area we highlighted yesterday, keeping falling highs from 8-Nov, and the chance of a return to 5600 as uncertainty builds ahead of the next Eurogroup meeting on Monday. If optimism mounts, however, trading at 5750 could serve as a pause before a continued rebound towards 5900. We’ve already advanced 150pts from the lows. A repeat of this would conveniently take us to 5900 – long term falling highs.

In FX, the GBP/USD has weakened overnight on the prospect as the USD on Bernanke’s lack of colour on more asset purchases and prospect of 2013 being a good year if the fiscal cliff is resolved (something we all expect, eventually). EUR/USD made a similar moves, but helped also by a weakening in the EUR on a lack of overnight progress. In commodities, Gold maintains its pull-back from $1735 highs as the commodity currency (USD) strengthens. Brent still supported by Middle Eastern unrest leading to fears of supply disruption. Rising lows from $104 through $109, resistance at 3-day highs of $112. US Light Crude in middle of $85-90 range.

In focus today, will be the minutes from the Bank of England’s (BoE) attest MPC rate-setting meeting for any more clues on when the next batch of QE might be expected. Thereafter US Weekly Jobless claims are seen improving to 410K from last weeks 439K, which is still well above the recent norm of circa 375K. Continuing claims are likely static at 3.34m. US PMI Manufacturing data is seen flat, and the final Uni of Michigan Consumer Confidence reading is seen revised a touch lower from the preliminary.

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

• Aussie              Westpac leading Index                                   Improved growth
• China               Conference Board Leading Econ Index          Improved growth
• See Live Macro calendar for all details

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

• UK Mail H1 pretax profit rises
• Britain renews channel 3 and 5 licences
• Compass FY profit up 9 percent, confident for 2013
• French Connection third quarter like-for-like revenue flat
• TT Electronics to sell Ottomotores for $46.5m
• Imagination Tech says MIPS board continues to back tie-up
• ViaLogy says to apply its technology in oil shale
• Gemfields says to buy Faberge
• Darty Plc says to sell operations of Darty Italy
• QinetiQ sees year performance in line
• Genel buys interest in offshore block in Morocco
• JD Sports says on track to meet expectations
• Johnson Matthey H1 profit dips, outlook cautious