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

UK 100 called to open +10pts, with a mixed session for Asian markets stemming from the same reasons of caution as yesterday: a too close to call US Presidential Election tonight, the leadership change in China and key Greek votes on the austerity necessary to receive its next parcel of bailout assistance. The G20 meeting also saw the IMF’s Lagarde declare sense of urgency for EU (Eurozone crisis) and US (Fiscal Cliff) to act, with the global outlook still uncertain.

Overnight, macro data showed a worsening of UK and Australian House Prices. The Reserve Bank of Australia (RBA) left interest rates on hold (Aussie dollar positive), despite expectations of a cut, and sounded a neutral tone with policy appropriate for now, given some improving global macro data (China?).

On the European front, the German Finance minister added to the mix by saying that a solution for Greece’s debt problem had yet to be found, but the EU’s Rehn said the Eurogroup is on track to make a decision by next Nov 12. Claims that ECB had erroneously accepted poor quality Spanish collateral have been sorted, according to the central bank.

No surprise that Spain still deciding whether to request aid, still needing to assess conditionality. A Spanish newspaper also writing that the state of the economy is far worse than the government is admitting. The IMF’s Lagarde also claimed that France risked falling behind Spain and Italy if it is too slow with economic reforms.

US markets closed higher, with technology driven by Apple which said that it had sold more than 3m iPads (no split given) in the first 3 days that the iPad mini and fourth generation iPad went on sale. Markets higher despite US ISM Non-Manufacturing data dropping back more than expected – the first decline in 3 months and undoing some of the positive data flow of late.

The UK 100 index may be in an 8-day rising trend, however, off its best overnight levels opens the possibility of a move to rising support around 5800. In the middle of the rising range for now, watch out for PMI Services data from Europe’s core and UK Manufacturing data, both of which could be the drivers for the next move.

In FX, GBP/USD still in 6-week downtrend. Rallied back to 1.60 after testing 1.596 yesterday afternoon. Support still at 1.591 from 23 Oct lows. Some billing Romney victory as USD positive (change of Fed Chairman), and Obama as status quo and thus USD negative.  EUR/USD broken below 2-month support at 1.28 overnight. Worries about Europe intensifying or optimism about US and its dollar?

In commodities, Gold off its 6-week lows of $1673, but still in downtrend from October highs of near $1800 as USD strengthens against GBP and EUR. US Crude Oil still under pressure at $85.6 from stronger USD. Brent Crude Oil rallied off lows of $105, but found resistance at falling highs of $108 from 17 Oct.

In focus today is undoubtedly the US Presidential Elections although the action will be overnight. Data-wise though PMI Services figures from the Eurozone will be looked to for any signs of rebound. Anyone above 50? Growth? UK Industrial Production is seen weaker than last month, while Manufacturing is expected to have recovered. Germany Factory Orders are seen weak like UK industrial production. We also have US Jobs openings and the NIESR’s UK GDP Estimate.

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

• UK                    BRC House Prices                                Worse
• Australia          House Prices                                       Worse
• Australia          Interest Rates                                      Unchanged
• Japan               Coincident & leading Index                In-line
• Switzerland     SECO Consumer Confidence               Better
• See Live Macro calendar for all details

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

• Capital Shopping Centres says occupancy stable at 96 pct
• Babcock Int’l H1 profit up 13 pct
• InterContinental Hotels widens search for New York hotel buyer
• EasyJet October passenger traffic up 6.2 pct
• DS Smith says it continues to expect substantial year-on-year EPS growth
• Costain traded well since July, sees in line FY
• Imagination Tech buys op business of MIPS Technologies
• Pennon’s Viridor signs south London waste deal
• Morgan Sindall appoints John Morgan as its CEO
• BG Group completes sale of Comgás stake
• Chariot Oil & Gas name Larry Bottomley executive chairman
• Marks & Spencer profits fall on mistakes, economy
• G4S nine month rev up 6.3 pct
• UK property companies London & Stamford, Metric to merge
• MITIE wins £100m contract with Sky
• Petrofac agrees strategic alliance with Bowleven
• AB Foods’ profit up on exceptional sugar and Primark result
• Serica Energy says Spaniards East Well disappoints
• Faroe Petroleum says Spaniards east well reached total depth of 10,694 feet
• ARM Holdings joins consortium to buy MIPS rights