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

UK 100 called to open flat, with Asian markets showing lower with sentiment held back on persistent concerns regarding Chinese growth ahead of Saturday’s official PMI figure (sub-50, contraction territory?), a collapse in Japanese Industrial Production coupled with soft inflation figures and continued general caution ahead of US Federal Reserve (Fed) Chairman Bernanke’s Jackson Hole speech this afternoon.

US markets closed in the red with nerves weighing on risk sentiment and a growing consensus that Bernanke’s speech will disappoint those expecting a big bazooka announcement on monetary stimulus. A fellow Fed FOMC committee member also maintained uncertainty with regards to what the speech will contain, by saying that he doesn’t believe more quantitative easing (QE: money printing) is appropriate right now.

Overnight data showed a drop in UK consumer confidence, along with the disappointments from China and Japan, while this morning we have had stronger Indian GDP growth and better UK house prices than expected. Nonetheless, German Retail sales have “collapsed”, missing consensus quite considerably. Macro data thus still very mixed maintaining uncertainty as to global economic direction.

Nonetheless, having waited so long for a signal from Bernanke, I wonder whether the ‘speech’ could prove a non-event with potentially muted market reaction given the already gradual shift in consensus. Focus would thus swiftly switch to what Bernanke’s European Central Bank (ECB) peer Draghi says next week. He’s cancelled his Jackson Hole appearance citing lots to do back home.

While we could live with the US bumbling along with low growth for a while longer, a significant move on the Eurozone debt crisis (sovereign bond market intervention by ECB to limit borrowing costs) could be a much bigger event, in my eyes as the region’s woes continuing unabated (if not getting worse – Spain). Then again both could disappoint and investors left hanging on again.

In Commodities Gold pretty much unmoved again, traders in wait-and-see mode regarding what Bernanke says and how it impacts the US dollar (in which commodities are denominated). In Oil, Brent Crude flat but US Light Crude lower as impact of hurricane Isaac not as bad as it could have been. With FX, watch out for USD reacting to Bernanke’s speech. No QE could see USD strengthen against major peers (GBP, EUR) while an explicit announcement of QE on its way would likely see it weaken. Commodity prices would likely move in the opposite direction to the USD.

In today’s macro line-up, watch out for Eurozone inflation and unemployment. Inflation too high could limit ECB’s scope for further rate cuts should they wish to help the economy along. A bigger than expected rise in unemployment could confirm a worsening economic situation, especially with weak GDP figures of late. In the afternoon, US data likely overshadowed by Bernanke’s speech at 3pm, a bit like the world stopping for US Non-Farm payrolls on the first Friday of every month.

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

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

• UK                    GFK Consumer Confidence     Worse
• Japan               Inflation                                   Worse
• Japan               Industrial Production              Collapsed
• China               MNI Business Sentiment         Declined
• Japan               Housing construction              Better
• India                GDP                                         Better
• Germany         Retail Sales                             Worse
• UK                    Nationwide House Prices        Better
• See Live Macro calendar for all details

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

• Exillon Energy says output rises, confident on targets
• Redrow chairman leads fund buyout of UK housebuilder
• Beowulf Mining says latest Kallak North results encouraging
• Chesnara profit more than doubles, ups dividend
• Marshalls Swings to 1H Pretax Loss; Keeps Interim Dividend 1.75P
• Goldenport says no interim div
• Restaurant Group says first half adjusted pretax profit rises
• WPP launches joint venture in Indonesia
• Aminex Posts Wider First Half Loss as Gas Prices Fall
• Capital&Counties Properties Completes Joint Venture for Seagrave Road
• Bwin.Party Digital Posts Narrowed 1H Pretax Loss; Ups Dividend to 1.72P
• Oxford Biomedica Narrows First-Half Loss, Sufficient Funding Until 2014
• Kier Group Named Preferred Bidder for GBP240M Watford Health Campus