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

UK 100 called to open -5pts at 6705, just holding the round number, but making limited progress overnight despite US markets closing higher on mixed macro data (jobless skewed, PMI light, consumer comfort declined, Kansas Fed jumped)  but buoyed by talks of a very dovish think tank report taking Fed tapering now off the table.

 Asian markets still held back by some disappointing corporate earnings reactions and nagging doubts over a potential liquidity crunch in China (money market rates highest since mid Jul). Still below summer highs, but not exactly going the right way as government refrains to intervene to calm inflation.

 In Japan, Samsung profits may have surged on chips in cheaper handsets, but shares weak, likely on profit taking. The weak USD also meant a stronger JPY, hurting Nikkei exporters, as did core inflation which despite recovering to highest since 2008, is still well off target and may even have begun to slow.

 US markets closed higher (S&P still near recent record highs), and while earnings season has been mixed so far, big guns Microsoft and Amazon managed positive surprises, even if the latter reported a net loss in Q3 its revenues 24% growth was good to see as investors worry about the shutdown effects on Q4 holiday sales. The former provided good noise on stable PC market with profits +17%.

 After the ECB announced the outline of its AQR, note the Fed approving rules for the largest banks, also more strict that Basel requirements. BoE Governor Carney also announced a revamp at of money market operations to widen access and cut insurance costs, expanding the range of acceptable collateral and offering money for longer. Banks should like this.

 In focus today we have German IFO Surveys seen making very marginal improvements. This will be interesting after the disappointing PMI print yesterday. UK GDP hopefully seeing further acceleration in Q3. US Durable goods seen rebounding strongly. Uni of Michigan flat and Wholesale Sales/Inventories up a touch in August. Results from P&G and UPS.

 The UK 100 still trying higher but making little progress. The week’s 6720 high has been replaced by 6735, but we are back around the round number 6700 again. We are still concerned by a waning in momentum but 1-month rising support still valid at 6700 exactly and note the overnight lows of 6699.9.

 In FX, USD basket taken another leg down overnight to test 79.1. GBP/USD holding at recent highs 1.62. Are multi-year falling highs which coincide with the early Oct highs and 2012’s best levels anything to be worried about? EUR/USD strength persists, now above 1.38 leading to the question is 1.40 possible. USD/JPY down below 97.

 Gold benefiting from weak USD to test $1350 which we had flagged as potential barrier. But now see move likely to continue to $1370 mid-September high and trendline of falling highs since mid-March. Renewed safehaven interest after much shunning. Oils found pressure again with US Light back below $97.5 and Brent testing lows of $107.

 For any help you may require placing trades or in terms of market information, put a call in to our trading floor – all part of the service.