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

UK 100 called to open +5pts, after US markets closed just positive (up 0.2 to 0.4%) thanks to news flow on volumes being on the light side (typical for August). Positive bias maintained thanks to positive readings from US Leading Indicators and Uni of Michigan Consumer Confidence which kept the “will he/won’t he” debate regarding US Federal Reserve (Fed) Chairman Bernanke and more quantitative easing (QE; money-printing to reboot economy).

It has been a slow and mixed start to the trading week in Asia with a similar thin news/volumes trend to that in US and Europe last week. Several regional markets closed of public holidays. China still weighing on sentiment and news reports that China has no intention of cutting its banks’ reserve rate requirement (RRR) to boost credit flow and stimulate the economy.

Continued conflicting reports on Greece’s future in Eurozone. European Central Bank (ECB) member saying Greece will not leave Euro, while German Finance Minister saying no more aid. Cost cuts proving very tough. We’re back playing hardball again. Fun, fun, fun. This week PM Samaras meeting Merkel and Hollande. Both quibbling over whether extensions to Greece’s bailout timeline should be granted or not.

Also talk that ECB’s new bond-buying programme (to help Spain and Italy’s borrowing costs) is superior to the existing Securities Markets programme (SMP), which has been dormant for some time on rejection by members that it is illegal help. We’re still waiting for Italy and/or Spain to ask for help before the new programme can be enacted.

Overnight macro data positive from China on the housing front (prices rising in more cities than last month) unfortunately not the same case in the UK where Rightmove price falls accelerated. Japanese data showed a climb higher for the two indexes.

In the Commodities space the White House confirmed that releasing strategic reserves of Oil was an option. This has, however, done nothing to slow up the advance of US Light Crude ($96.4/barrel) despite a murky global economic outlook. Brent Crude is off its Thursday $115.4 highs, despite geopolitical factors surrounding the Middle East still hot. Gold testing $1,620/oz is back at the $1615 going against the grain of positive US macro data which poured cold water on QE hopes.

In FX, GBP/USD is a touch stronger (despite less QE hopes), but right in the middle of its 1-week range. EUR/USD stronger, nearing the top-end of its 1-week range on reports of ECB setting sovereign borrowing cost thresholds for each Eurozone member. GBP/EUR weaker, near the bottom of its 1-week range (this with European politicians getting more vocal after holidays). USD/JPY at 1-week high after strong rally.

Thin macro calendar today, with only Eurozone Construction Output (the downfall sector of UK’s preliminary Q2 GDP reading), which was just positive last month, but significantly weak year-on-year. In the afternoon, we have the US Chicago Fed National Activity Index which will be watched given the run of mixed US macro data making it difficult to decide whether the Fed will launch more QE or not.

Later in the week, markets will be looking at UK Industrial trends (Tues) and US Housing (Weds). Thursday is a busy day with Eurozone PMI Manufacturing and Services, US Jobless, German GDP, UK Retail (Thurs) and Friday sees us close the week with UK Q2 GDP (second estimate, expected to be revised up to -0.5% from -0.7% after revisions to Construction data), and update on UK Services and US Durable Goods Orders, the latter potentially swinging market expectations on QE.

As always, speak to your trader for a chat about the markets and what you like to trade.

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

• China               Property Prices                       Improved
• UK                    Right move House Prices        Growth slowed
• Japan               Leading Index                          Better
• Japan               Coincident Index                     Better
• See Live Macro calendar for all details

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

• Bovis Homes sees strong rise in second – half profit
• Zhaikmunai to acquire further oil & gas fields
• Paternoster Resources Moves Into 1H Profit, Confident of Success
• Tertiary Minerals Study Indicates Viable Lassedalen Fluorspar Project
• Shanta Gold Sees 4Q New Luika Gold Production at 13,000-17,500 Oz
• Proteome Collaborates With CHDI Foundation on Huntington’s Research
• Alecto Minerals Starts Exploration at Wayu Boda Gold Project, Ethiopia
• Amlin Moves to 1H Pretax Profit, Sees Opportunities for Growth
• President Petroleum Argentina Licence Awards and Assignment Agreement