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

UK 100 called to open flat, after a flat session yesterday, and mirrored in the US, with the market’s focus points remaining US Q2 GDP today and US Federal Reserve (Fed) Chairman Bernanke’s speech at the Jackson Hole speech economic symposium on Friday as hopes for stimulus rage on.

Investors continue to pine after central bank stimulus (especially from the Fed) to boost risk appetite (and economic growth) amid continually mixed macro data (yesterday US housing was better, but US Consumer confidence worse) and despite markets trading around multi-year highs. The data and speech are seen by some as potential trigger points for more help.

Europe was weaker yesterday on news that the huge Spanish region of Catalonia had added to the list of regions request aid from Madrid. Its refusal to accept conditions highlighted the problems with devolved power. This also reignited fears/hopes that Spain would give in and request a help (something which would allow the ECB to intervene in sovereign debt markets). The country also reported a GDP growth contraction which was stronger than first thought and saw bank deposits continue to dwindle as money sees a flight from the troubled country and its banking sector, highlighting the country’s woes.

Reports that a European Central Bank (ECB) plan to automatically target sovereign borrowing costs are unlikely, but big short-term interventions possible, also quashed sentiment, however, the announcement that ECB president Draghi would not participate at Jackson Hole due to ‘workload’ did spark hopes that he may launch something big next week.

Overnight, Asian markets flat as traders look to Friday’s Bernanke speech, however, many are cautioning against expecting too much with US data having been ‘OK’ of late. If anything, maybe we should be expecting an outlining of what Bernanke can’t do rather than what he can in the face of such data.  This would likely be a big let-down for the market which appears to be looking just one way.

In Commodities Gold testing that 12-month trendline over falling highs again as hopes for stimulus move between on and off. The Oils again off their highs after moving higher on fears hurricane Isaac would impact US production. In FX, USD pulling back from its lows of yesterday vs. GBP and EUR.

Today’s macro data is sure to focus on the second estimate for US Q2 GDP. Consensus sees +1.7% QOQ annualised, revised up from the last estimate of 1.5%, a figure which might be viewed by markets as a case of good news (growth) is bad news (less chance of monetary stimulus). US Personal Consumption and Pending Home Sales later in the afternoon could also have a similar effect on investor sentiment.

As always, have a chat with your friendly trader for anything other information you require.

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

• Aussie              Construction Work done                     Worse
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UK Company Headlines: (Source: Reuters/DJ Newswires)

• San Leon and EOT join forces over oil shale
• Gaming group 888 sees profit almost double
• ITM says Shell and National Grid join gas project
• Domino’s Pizza UK acquires Swiss business
• Chime Comms H1 pretax up 47 pct, positive outlook
• Serco Posts Widened 1H Pretax Profit, Ups Dividend to 2.65P
• Ark Therapeutics First-Half Loss Widens
• Ophir Energy Swings to First Half Loss on Higher Costs
• Paddy Power 1H Pretax Profit +21%, Confident in Group Prospects
• Corin Group Posts First-Half Profit Rise, Well Positioned
• FirstGroup: Preparing for Successful Start of West Coast Franchise
• Antofagasta Earnings Drop; Medium-Term Copper Outlook Strong
• Nostra Terra Oil & Gas Buys 20% Stake in Oklahoma Prospect