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

UK 100 called to open -15pts (but off its worst levels), with Asian markets in retreat after a four-day rise as recent hopes for fresh monetary stimulus from Messrs Bernanke (US Federal Reserve – Fed) and Draghi (European Central Bank – ECB) wanes ahead of their respective meetings and announcements today and tomorrow.

A run of positive data (Housing, Consumer Confidence and Chicago Fed) from the US yesterday dashed confidence that the Fed would see the need to announce anything today. There is also increasing thought that Draghi has painted himself into a corner with his recent “I’ll do whatever’s needed” comments and that any action will again be too short-term, failing to resolve the region’s sovereign debt crisis.

Overnight data from Asia also tempering optimism with China’s economy continuing to struggle with slowing growth. This may help convince the People’s Bank of China (PBOC) of the need to act with stimulus measures on its side. This would normally bolster market sentiment, however, growth appears to be slowing across Asia as a whole after its biggest economies (China, South Korea, Taiwan, India) posted disappointing export and manufacturing growth figures – US and European slowdown beginning to bite. Other data out overnight/this morning shows UK House Prices falling even faster than last month, likely to impact on consumer confidence given the importance of one’s property as an asset.

As we expected yesterday, the 5,700 level (reached on hopes of central bank stimuli) proved too much of a hurdle as traders moved into wait-and-see mode and then pulled expectations (and thus the markets) down. This leaves us in the middle of a range where resistance remains at 5,710 and support dates from last Friday at 5,560, then last Tuesday at 5,450 before the monetary stimulus excitement began.

Looking at FX and Commodities, Gold off its recent highs of $1625 as traders reduce expectations of stimulus from the US Fed. This has seen the USD strengthen versus its peers. If the Fed doesn’t print more money to buy bonds to reduce borrowing costs, there is no increase in money supply and so no devaluation of the currency, meaning we can get less USD for our GBP or EUR and can thus afford less dollar-denominated commodities such as Metals and Oil

Today’s focus likely on Eurozone constituent’s PMI Manufacturing (Sweden has just comfortably beaten expectations) as well as US employment data in the form of ADP. Then we have PMI and ISM data from the US allowing us to compare the nation with the slowing trend reported accross Asia overnight.

Results out this morning from investment bank Standard Chartered look to have missed expectations, while French peer Société Générale looks to have beaten. German auto manufacturer BMW has posted revenues in line but profits below consensus. For a run-down of any other results out this morning, speak to your trader.

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

• UK                    BRC Shop Price Index              Growth, but slowed
• China               Manufacturing PMI                Worse than expected
• Aussie              House Price Index                   Better
• China               HSBC Manufacturing PMI       Improved
• India                Trade Balance                         Improved
• UK                    Nationwide House Prices        Worse
• See Live Macro calendar for all details

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

• Cape says unlikely to meet full-year expectations
• Taylor Wimpey first-half profit rises 50 pct
• Coastal Energy says Bua Ban north continues to suprise
• Dubai’s DP World container volumes climb 7.5 pct
• UK fund firm F&C narrows H1 net loss
• Miner ENRC says Q2 ferroalloy production dips
• BHP Billiton says focus now is on cost cutting as markets slide
• ENRC secures licence for Congo mine for $101.5m
• Filtrona adjusted operating profit rises for first half
• Sable Mining sees encouraging Liberia iron ore results
• Xchanging profit up, eyes further growth in H2
• Mouchel agress debt for equity swap with lenders
• Melrose has 98.4 pct of acceptances for rights issue
• Thomas Cook completes aircraft sale and leaseback
• StanChart eyes 10th straight record year even as earnings slow
• Antofagasta H1 copper production up 16.5 pct yr – on – yr
• Rexam posts higher profit
• Avocet Mining profit falls
• Next H1 sales up 4.5 pct, ups year guidance

Morning Press Selection:

• Chinese manufacturing growth slows – FT.com – Asia-Pacific http://on.ft.com/NktOhg
• Switzerland is ‘new China’ in currencies – FT.com – Currencies http://on.ft.com/OA352C
• Economic gloom puts pressure on MPC – FT.com – UK Economy http://on.ft.com/NkVi6r
• S Korean exports drop on weak global demand – FT.com – Front page http://on.ft.com/NkVkv1
• Time for something different from the ECB – FT.com – Markets http://on.ft.com/PkqROl
• Our opt-in opt-out solution for the euro – FT.com – Opinion http://on.ft.com/M9sVZ5
• Biggest dangers hiding in plain sight – FT.com – Markets http://on.ft.com/NkVLpg
• Global slowdown bites across Asia – FT.com – Asia-Pacific http://on.ft.com/Mievvy