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

UK 100 called to open -30pts, after Asian markets elected risk-off as their bias, disappointed by yet another inconclusive meeting of Eurozone finance ministers, a very public spat between Chairman of the group Juncker and IMF head Lagarde over Greece’s debt sustainability target (2022 with extension vs. 2020 with restructuring?) and a decision on disbursement of the troubled nation’s next tranche of aid being kicked into next week, maybe even the week after.  Cue continued confusion over timing of receipt.

This leaves Athens’ funding position precarious with debt maturing this week and uncertainty over whether national banks can stump up what’s needed in today’s short-term auction to provide the funds required to settle the maturity. Has the European Central bank (ECB) relaxed collateral rules so the national banks can help out in today’s €3bn auction? So far, denied.

The US fiscal cliff continues to draw generate much discussion, although Romney’s advisor suggests his party should change stance and accept the President Obama’s structure for impending budget talks. Ratings agency Moody’s has said that it sees a gradual recovery in the US (without fiscal cliff resolution its expects recession from next Spring) and no hard-landing in China.

Overnight, macro data shows an improvement in UK house prices (slowest in 2 yrs), but deterioration in Australian Business Conditions (lowest in 3 yrs) and confidence (negative), Japanese Industrial Production weakness was confirmed. The latter supports the weak Japanese Q3 GDP figures of yesterday which dented sentiment focusing on the potential recovery in China.

Results out this morning from Vodafone, may disappoint after the company announced a not insignificant £6bn write-down on the value of its Spanish and Italian businesses and lowered its full year outlook, with cash flow expected at the lower end of the guidance range. The company will however receive 45% of an $8.5bn dividend from Verizon Wireless. While in-line with expectations, it is lower than last year and doesn’t offset the write-down.

The UK 100 index continues to test the recent support of 5750, with yesterday’s rally failing to break prior day resistance decisively. This leaves the bias to the downside since the sell-off from long–term falling highs of 5920, with potential for test of 5720 and 5640. Negative drivers not exactly lacking at the moment.

In FX, GBP/USD still in 2-month downtrend, maintaining its 1.58 handle. Ditto for EUR/USD, with downtrend and a 1.26 level. GBP/EUR has tested its rising support but regained 1.25. In commodities, Gold has settled lost momentum and fallen back from $1738 after the USD strengthened against GBP and EUR. Support at 1720? Crude Oil fallen back to $85, but still has support available around $84, from last week. Brent Crude has edged back from $111 to trade around $108.5. Support around $107.

In focus today will be UK inflation figures for consumer and producers. Thereafter, ZEW surveys on Germany and the Eurozone will be of interest given the poor run of macro data (manufacturing/services/industry) out of the region and its supposed backbone last week and ahead of the GDP figures later this week. The Greek debt auction will garner much attention given the funding predicament Athens has this week with debt maturity.

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

• UK                    RICS House Price Balance       Better
• Aussie              NAB Business Surveys             Worse
• Japan               Industrial Production             In-line, weak
• See Live Macro calendar for all details

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

• John Menzies expects full-year results to be in line with expectations
• Lonmin urges shareholders to vote for rights issue
• Sportingbet says deadline for William Hill/GVC bid extended
• Hibu says aims to complete debt restructuring before H1 2013
• Kcell to float shares in London, Almaty
• Cineworld total revenue down 1.4 pct for 19 weeks to Nov 8
• Synergy Health profit rises
• Petra Diamonds qtrly production up 70 pct
• Capita confident of organic growth in 2012
• De La Rue lowers profit expectations on contract delays
• Persimmon says sales have improved since July
• Vodafone takes 6 bln writedown on Europe
• Oxford Instruments H1 profit up 23.5 pct
• Johnston Press reports sales fall in last four months
• Haulier Stobart enters retail bond market
• Salamander plugs latest Thai well, not commercial
• Lonrho says Q4 trading begins in line
• ITV says will outperform TV ad market over full-year
• Lonmin warns future at stake with $817 mln cash call