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

UK 100 Index called to open +30pts at 6865 with the latest bounce off rising support spurred on by last night’s Fed ‘hold’. This has allowed the UK Index  to challenge yesterday’s highs and keeps alive the Sept 15 rising channel uptrend. It also increases the chances of Sept 6935 highs being revisited. Bulls will now want to see 6890 cleared before looking to 6930. The Bears, will again be eyeing a retrace to test now higher rising support at 6850. Updated watch levels: Bullish 6885, Bearish 6840.

A positive start for equities comes as no surprise after risk appetite was given a boost by the US Federal Reserve (Fed) electing not to hike rates last night, dovetailing nicely with the BoJ’s stimulus tweaking yesterday and to keep the loose policy party in full flow. A weaker USD is helping risk appetite with commodities prices rejoicing (both precious and base metals, and oil) something likely to buoy London’s Miners after an already solid performance down-under overnight.

Fed Chair Janet Yellen’s message of economic progress, but not enough to move this month, is being interpreted as a hawkish hold, prepping us for a December hike to keep excessive market complacency at bay. There was nonetheless something for both the hawks and doves, providing the US central bank with enough wiggle room to swerve a pre-Christmas hike if necessary.

On the one hand, a ‘more balanced’ risk assessment increases the probability of a December hike (market implied probability risen to 60%). This is bolstered by a not insignificant three voters going against the grain and calling for an immediate rate rise. A lively debate it must have been. Yellen was also at pains to emphasise that the upcoming election has no influence (really?) although a 6pt lead for Clinton in the latest poll must be a relief.

On the other hand, a December hike would still mean the Fed only managed one this year, well below its initial dreams of four earlier in the year. Furthermore, its expectations for future rate rises now call for only two next year, a significant downgrade from three previously, implying dented confidence and an even shallower path to US monetary policy normalisation. Cheap money for longer. Yay!

Asian stocks are positive outside of Japan, which closed for a holiday, although Australia’s ASX is posting gains helped by miners enjoying higher commodity prices courtesy of that weaker USD, another Copper breakout and Oil still climbing to help Energy names.

US equities, as expected, reacted positively to the news of the Fed’s base rate hold, with markets closing sharply higher helped by a rising crude oil price. The Dow Jones closed 160pts (0.9%) higher alongside a +1.1% finish for the S&P 500, with strong contributions from the energy  sector.

Oil continues the breakout started yesterday as EIA Crude Inventories confirmed Tuesday’s API data showing a 7.5m barrel drawdown. Crude price was helped further as the USD weakened following the Fed’s decision to hold interest rates. The news of 7-month lows for US inventories comes at a crucial time for oil producers, as the U.A.E. energy minister urges OPEC not to rush into any hasty decision regarding a production freeze at next week’s informal talks with members and non-members alike.

Gold, the commodity most sensitive to interest rate decisions, has rallied significantly after yesterday’s ‘no change’ decisions in Japan and the US. Currently trading around 2-week highs, the next hurdle for the precious metal will be to challenge resistance at the $1335 mark, clearing the way to regain September highs above $1350.

In focus today will be the continued fallout from Federal Reserve’s announcement last night to leave the base interest rate unchanged at 0.5% and, more importantly, how markets will react to the heightened possibility of a December rate hike. The ECB’s Mario Draghi is the highlight of a busy day for speeches from European policymakers.

Thursday’s macro data begins UK CBI Trends data, looking to continue a wave of positive post-referendum data, after which will Eurozone Consumer Confidence show sentiment from European consumers on the rise? Across the pond, the first post-meeting US macro data releases from the Chicago Fed National Industry Index and US employment figures will look to help increase predictions of a December rate hike further, with house price data coming in an hour later.

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

• WYG sees H1 pretax profit and revenue “significantly ahead”
• Construction group Kier says yet to suffer any Brexit impact, posts +44% jump in underlying operating profit
• Lloyd’s of London cautions on Brexit as H1 pre – tax profits  +22%
• Rig builder Lamprell sees 2016 revenue below market expectations
• Management Consulting Group signs agreement with Accenture for sale of Kurt Salmon
• Gulf Keystone says H1 rev more than tripled to $102.1m
• LondonMetric says entered into £130m private placement
• Micro Focus says trading YTD consistent with previous guidance
• Rolls – Royce names Daily Mail’s Stephen Daintith as new CFO after resigning from previous role
• Oil climbs +1% after surprise U.S. crude stock draw
• London nickel hits 6 – week top on threat of Philippine mine suspensions
• London copper up as Fed rate call hits dollar, lifts metals