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

  UK 100 called to open -15pts at 6550, with an eleventh hour Congressional deal (President Obama already signed it into law) on the US debt ceiling impasse failing to further inspire European bourses (although Asia more buoyant) after a no-default hopes rally, with the deal comprising merely a 2-3-4 delay with Republicans panicking and leading to the impasse can being kicked down the road. Markets don’t like uncertainty.

 In terms of work to do, the budget needs to be re-negotiated within 2 months, the government will be re-opened and funded for just 3 months and the debt ceiling issue pushed back for 4 months. The muted market reaction (US & European futures down) suggests them already pricing in a standoff re-run in Dec, Jan and Feb.

 Neither party can be proud, although Democrats look to have the upper hand, showing prepared hold firm and blame ultimately being directed at Republicans (or at least factions) refusing to give up on their rejection of Obamacare.

 After ratings agency Fitch put the US’ AAA credit rating on negative watch, S&P, which stripped it of the prized rating over two years ago, warned that the shutdown would cost at least 0.6% of GDP or $24bn for the economy.

 If anything though, this could support risk appetite on the premise that QE3 tapering by the Fed will need to be delayed yet further (well into 2014), so unlikely to be something outgoing Chairman Bernanke gets to pull the trigger on. A late welcome present for Janet? But uncertainty from can-kicking may negate this.

 Data overnight saw an improvement in Aussie NAB Business confidence and Chinese Foreign Direct Investment (FDI), a measure of international confidence, although the latter missed consensus expectations, and the data is questioned in terms of how genuine. China Commerce Ministry said trade faces challenges in coming months due to slowing demand from emerging markets (see IBM Q3 results comments below).

 In terms of Q3 Results in the US, IBM may have beaten expectations but scared markets by blaming a slide in revenues on China while eBay warned of tougher US trading, after Bank of America echoed peers with slower trading revenues and slower mortgage market. The Fed Beige book also showed ‘modest to moderate growth’, but uncertainty from fiscal deadlock.

 In focus today we have UK Retail Sales seen rebounding in September after a tough August, while US Jobless claims are seen dropping back (initial claims) after last week’s California anomaly glitch , although continuing claims are seen remaining flat. The Philly Fed is seen falling back, likely on the concerns over the government impasse. Lots of Fed speakers on the slate again today which could dictate views on any taper delay.

 The UK 100 futures trending down from 6585 highs of mid-afternoon as realisation of US problems just being put off for a bit longer. Potential support at 6540 and then 6500 which has been a key level of oscillation since April. Beware falling highs since May.

In FX, USD basket broken below recent rising lows at 80.4 after hitting heights of 80.85 yesterday. GBP/USD back up at 1.60 and EUR/USD above 1.35. USD/JPY fallen back below 98.5 as JPY sees renewed interest as safehaven. Expectations of US seeing another bout of uncertainty?

 Gold still hanging around $1280 level with each foray higher seeing it fall back. Falling highs at $1300 still a major hurdle. With US situation resolved, for now, safehaven seeking may take a back seat even with USD weakening from recent highs.

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

• AU            NAB Business Confidence               Improved
• CN            Foreign Direct Investment              Miss, improved
• JP             Machine Tool Orders                     Still weak

See Live Macro calendar for all details

COUNTDOWN: 12 DAYS UNTIL UK BANKS RESULTS

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

• Man Group – net inflows in the quarter of $0.7 bln
• Jupiter says assets rise to 29.9 bln stg
• Fresnillo on track to meet 2013 silver output guidance
• Monitise takes full ownership of Asia Pacific joint venture
• Mothercare Q2 group sales down 0.5 pct
• Diageo sales up 3 pct on strong Latin America
• BSkyB posts solid Q1 customer growth despite BT launch
• Rathbone Bros Q3 funds under management up 15.6 pct
• Hibu says chairman, CEO to step down post restructuring
• C&W Comms says Phil Bentley to replace Rice as CEO
• SABMiller says first-half revenue rises 4 pct, beverage volumes up
• Travis Perkins’ sales growth picks up
• SABMiller says H1 volumes up 2 percent, strong growth in Africa
• Bunzl announces acquisition of catering distributor Pro Epta
• Britvic says FY operating profit to beat guidance
• Ferrexpo says production costs fall as mine ramps up