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

UK 100 called to open +30pts, recovering some of their post Obama re-election 140pt hi-lo rout. Asian markets remained risk-off despite progress in Athens with Greek Parliament approving austerity measures needed for the country to receive its next tranche of aid, with approval still needed (Sunday) for the 2013 budget before less onerous terms interest rates and payback schedules can be re-negotiated with lenders.

Yesterday’s rout stemmed from fears that gridlock could remain on Capitol Hill, taking us a step closer to the January fiscal cliff of tax hikes and spending cuts which would reverse US GDP growth and likely impact global growth. Ratings agencies weighed in warning that it could have implications for the US AAA rating.

Add to this uncertainty over the transition of power in China, Draghi pointing to persistent regional weakness and the German economy now being impacted by the sovereign debt crisis and the European Commission downgrading its forecasts for growth in the 27-county bloc and we had the ingredients needed for a sell-off.

Overnight, we’ve had better Australian employment data, although the participation rate (the thing that is flattering US unemployment rate) dipped a touch. Japanese trade data and machinery orders were worse than expected, adding to global slowing growth concerns, as was its Eco-Watchers business sentiment surveys.

German trade data has added to the downbeat comments from Draghi and the EC yesterday, with its trade balance improving only because both exports and imports fell sharply. Selling and consuming less – austerity biting. Note, that that People’s Bank of China (PBOC) says China will definitely meet or exceed its official 7.5% GDP target this year. Should we be optimistic in rebound or that figures can be ‘delivered’ in-line.

The USD turned about face and strengthened yesterday amid the post-election rout which saw investors race for cover fearful that US growth could collapse next year. This despite QE3 likely being around for a good while longer. You can’t argue with the reserve currency. This saw Gold back track from its initial gains, and the metal has been volatile since, pulling back and then recovering sharply to trade in the middle of its 36-hour range, around $1720. US Crude is back down at pre-election $85 level, as is Brent Crude, both lower on the stronger dollar and growth concerns.

The UK 100 index has fallen back from the top of its recent range, to test the lower end. Support? Or pause before greater correction? Pessimism overdone, or correction only just begun? Support currently around 5800, then 5750. Resistance still around 5920 recent highs.

In focus today is will be the Bank of England (BoE) and European Central Bank (ECB) decisions on rates and the former’s decision on QE. Both are expected to leave rates unchanged, and it is likely that the Asset Purchase programme is left on hold too given the improved macro data of late. In the afternoon, we are back with Obama’s first data since re-election. With the US’s finances in a precarious position, how will its Trade balance fare? Will Weekly Jobless Claims be as static as ever?

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

• Australia                      Unemployment                       Better
• Japan                           Eco Watcher Survey                Worse
• Swiss                            Unemployment                       In-line
• Germany                     Trade data                              Mixed
• See Live Macro calendar for all details

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

• Supergroup Q2 sales rise 20.3 pct
• Land Securities-NAV per share 864P up 0.1%
• Weak construction market dents Balfour Beatty
• Dairy Crest H1 adjusted pretax profit 19.1 mln stg vs 22.7 mln stg
• BTG revenue jumps 30 percent in first half
• Spirent Communications expects 4th-Qtr rev similar to last year
• Tate and Lyle first-half adjusted profit up 2 pct
• Trinity Mirror says no claims served, sees advertising improve
• Howden Joinery posts revenue rise since H1
• Electrocomponents Plc profit falls
• Rightmove remains confident on year
• Hochschild Mining says makes C$103 mln offer for Andina
• Jd Wetherspoon posts 7.1 pct Q1 sales rise
• Sportech says trading in line with expectations
• Micro Focus says H1 profit ahead of expectations
• C&W Comms first-half core earnings up 2 pct
• Fiberweb sees FY in line with market expectations
• IAG confirms considering making offer for Vueling
• Insurer Aviva says 9-month sales down 5 pct
• ENRC focuses spending on five key projects
• Yule Catto maintains full-year forecast
• Shanks says on track to deliver expectations
• Schroders posts third quarter inflows as markets calm
• London Mining Plc says expansion to 5MTPA capacity on track
• Morrisons sales decline worsens, commercial director departs