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

UK 100 called to open -5pts, with trading remaining in that limited 5790-5820 range. Asian markets benefiting from a pre-market report that Japanese government plans to compile a stimulus package worth ¥400bn, double that originally planned to reboot the economy. This has seen the yen (JPY) continue its weakening versus the dollar (USD), breaking the 80 level, exacerbated by existing speculation that the Bank of Japan (BoJ) might add to its asset purchase programme.

Asia also helped by more improvement data from China with the Conference Board Sept Leading Economic Index up a touch from August, adding to hopes that the economic slowing may have bottomed and that growth in Q4 might accelerate. However, the ministry of Industry did note that stabilisation of the Chinese industrial sector is not yet solid, still facing challenges.

US markets slightly negative with no surprises from the Federal Reserve’s (Fed) statement which saw no changes to policy and rates still low until mid-2015. The economic assessment was largely unchanged, with continued expansion in economic activity (household spend, housing) at moderate pace, but progress with unemployment still slow and inflation picking up on energy prices. Sentiment also continued to be dented by Q3 results with more misses from big names.

Over in Europe, Moody’s’ conclusion of its ratings review on a pool of Spanish banks, following its sovereign investment grade reiteration, have seen action taken on 31 Spanish banking groups. The Greek parliament is also in disarray over the revised bailout plan with the finance minister backtracking after telling MPs he had secured a 2yr extension for debt repayments. The EU and IMF have also noted that there has been progress, but outstanding issues remain.

PMI data from Europe also highlighted how Germany, its supposed economic powerhouse, was not immune from the eurozone slowdown after both its Manufacturing and Services sectors disappointed, with a negative knock-on to Europe whose figures also missed.

European Q3 Results out this morning show EPS beats from banking group Credit Suisse and pharmaceutical giants Sanofi and AstraZeneca, while industrial BASF and Daimler have missed expectations.

In FX, GBP/USD has taken a leg up to 4-day highs of 1.607 on the prospect of improved UK GDP data and the lack of surprises from the Fed meaning that QE and low rates will be around for a good while longer. EUR/USD also made some headway, regaining 1.3, and surpassing yesterday’s highs. GBP/EUR sold down following its rally yesterday to above 1.235.

In commodities, Gold has rebounded off that key 1700 level, coinciding neatly with the weakening of the US dollar. US Crude Oil dented by big rise in US weekly inventories, taking it down to 1-month lows of $85, from which it has bounced overnight on the weaker USD. Brent Crude also rebounded, off month lows of $107.

Today’s focus will be on UK GDP, which is expected to show that the UK economy is no longer in contraction (+0.6% QoQ), helped by one-offs including the Olympics – this after PM Cameron alluded to further good macro news during PMQs.

Thereafter watch out for US Durable Goods Orders which, thanks to typical volatility are expected to rebound from a significant contraction last month. US Weekly Jobless Claims, always one to watch with a likely drop from last week and return to near the average. US Pending Home Sales likely of interest given recent strong data from the sector and Fed including it in its economic assessment.

Q3 results continue, with Sprint Nextel, ConocoPhilips, Colgate Palmolive, P&G during market hours, followed by Apple and Amazon after the close. Will the disappointing trend improve?

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

• China               Conf Board Leading Econ Index          Improved
• Europe             Q3 results from Credit Suisse, BASF, Daimler, Sanofi & AstraZeneca
• See Live Macro calendar for all details

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

• Royal Dutch Shell: Shell to increase participation in Beryl area North Sea
• Go Ahead Chairman to step down in 2013
• Colt Group earnings and revenue decline
• Inchcape Q3 underlying sales up 3.2 pct
• Debenhams year profit up 4.2 pct
• Bwin.party agress JV with social games provider Zynga
• SEGRO £5.5M of new annualised rental income in Q3
• Bloomsbury Publishing H1 profit falls
• APR Energy sees 2012 net income at lower end of forecasts
• APR Energy posts revenue of $54M during Q3
• Kazakhmys says full-year production on target
• Drax says to raise 180 mln stg via a placing
• Salamander says on track for 2012 output guidance
• Stobart H1 underlying profit falls
• ASOS profit up 42 pct
• Fresnillo says $500 mln San Julian project to go ahead
• Anglo American says Q3 copper, iron ore volumes up, warns strike impact ahead
• WPP cuts outlook on US, Europe slowdown
• AZ Electronic trading in line, Q3 revenue up 1 pct
• Unilever Q3 sales beat forecasts on emerging markets boost
• Avocet Mining says resources upgraded by 23 pct