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

  UK 100 called to open +5pts at 6660, after a mixed-to-negative session in Asia after the US jobs report miss added to doubts about the global economic recovery and Fed timetable for beginning process of stimulus exit, with Japan hit the hardest by a weaker USD (QE3 here for longer) and resulting stronger JPY (USD/JPY back below 99) denting the Nikkei and its exporters.

 Over the weekend and this morning, China PMI Services data positive (both official and HSBC readings), offsetting the conflicting manufacturing data of last week, although Australia weak on weak retail sales and a September election call which PM Rudd says will hinge on management of an economy facing increasing growth uncertainty especially from a slowing China and an end to its resources boom.

 Moody’ maintained its AAA rating and stable outlook on Australia, while China warned on inflation but the POBC said it won’t cut RRR (bank reserve ratio requirements) in the short-term. The IMF says Spain needs urgent action for jobs and growth, with GDP seen sub-1% through 2017. Fed voter Bullard says not enough data to decide on tapering (need more from H2), Fed to hold bonds for longer and sequester to have less impact than expected (more managing of expectations?).

 In focus today we have Eurozone PMI Services data which will be keenly watched given the improvement in manufacturing readings last week. Could we see upside surprises? Could a corner have been turned? Sweden already jumped >50. Can the UK figure maintain its strength? Thereafter, Eurozone Sentix investor confidence and Retail Sales are expected to show an improvement in the former, but a fall-back for the latter, despite good weather.

 The afternoon sees the US update on its ISM Services print, with a further improvement from an already solid level expected, adding to the difficulty in interpreting the run of data and what the Fed will do in terms of scaling back its stimulus. Can Brazil’s PMI Services take some off the heat of the BRIC economies?

 In focus this week will be the BoE inflation report and the details of the newly adopted forward guidance on interest rates over QE, especially with recent improvement in UK growth data. Which metrics will be focused on – growth, unemployment, wages, inflation? Other data to watch for is UK Industrial & Manufacturing production on Tuesday and the Update on the UK GDP estimate. German Industrial Production on Wednesday. On Thursday we have China Exports/Imports and on Friday China inflation which could have a real impact on week-end sentiment.

 Since the UK 100 broke above 6660 it has since come back following the disappointing US Jobs report and traded sideways into the new week. Support at 6600 from recent breakout and rising lows from 26 July bodes well for continuation of the long-term uptrend, as does the venture higher last week. Maybe a bit further to go sideways, but bullish undertone still in evidence.

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

• China       Official PMI Services          Improved
• Aussie      Securities Inflation              Better
• Aussie      Retail Sales                         Worse, deteriorated
• China       HSBC PMI Services             Unchanged

See Live Macro calendar for all details

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

• Blinkx acquires Grab Media
• Flybe CFO to step down, appoints new CCO
• Alent first-half adjusted pretax profit falls 3.1 pct
• Ultra Electronics H1 revenue falls 0.7 pct
• Pennon name Ian McAulay Chief Executive of Viridor
• Glencore to sell Australian malt company to Cargill
• HSBC set for 15 pct profit jump as cost cuts pay off (Reporting after 9:00am)
• Morgan Sindall profit falls, says second-half market to remain difficult