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

UK 100 called to open +35pts near recent highs and resistance (see our recent UK 100 Focus publications), with Asian equities and world futures getting a bid on news that Obama has been re-elected for a second four-year term in what turned out to be a not-so-close contest with Governor Romney, and winning what turned out to be the key swing state of Ohio which has not voted in favour of a losing candidate since 1960.

The USD weakened on the re-election news, likely on the prospect that if Obama is safe, then so is Fed Chairman Bernanke and thus his economy boosting by ultimately currency-weakening QE3 programme. This saw commodities rally with Gold regaining 1 Nov highs of $1725/oz, and oils breaking recent resistance: US Crude back at $89/barrel and Brent Crude hitting $111.

Overnight, very limited with just BRC Shop Price Index accelerating – good news for shops, but not so good for the shoppers – while Australian construction activity contracted at a slower pace. Results out this morning look to have French investment bank BNP Paribas doubling Q3 profit and beating EPS estimates, and German re-insurer Munich Re doing the same (remember the latter’s results will not include potential exposure to Hurricane Sandy).

In Europe, Junker claims Europe’s fundamentals are in a better state than the US and Japan and believes that the US fiscal cliff (tax hikes and spending cuts looming on Jan 1) may draw attention away from Europe. The vote on Greek austerity tonight is seen as supportive today (does Athens have any other choice?). Junker also negative on European Q4 growth, which is supported by recent data.

The UK 100 index has regained recent highs which look great on short term graphs, but looking over a longer horizon things are not so rosy, with resistance from mid-October and Mid-September at 5925 and falling highs since May 2011. With a weakening trend of data in Europe and the status quo in the US suggesting more of the same, can we see drivers for a push higher?

In FX, GBP/USD regained the 1.60 handle as USD weakened on Obama win, which was alluded to as a possibility yesterday. The pair is still in a 1-month downtrend.  Key for the pair will be the bank of England announcement on more QE tomorrow. More would weaken GBP and thus dent the pair. No change leaves onus on US QE3’s dollar weakening effect. EUR/USD also bounced off its lows, pushing towards the 1.29 level. Progress on Greek austerity vote this evening may benefit the EUR/USD, in addition to continued dollar weakening expectations from Obama’s win.

In commodities, interesting article in the FT suggesting investors will be forced to buy billions of dollars of Brent Oil Futures and sell US Crude after S&P GSCI, the most widely tracked commodity index, said it would increase the weighting of the North Sea benchmark at the expense of the West Texas Intermediate.

In focus today is undoubtedly the fallout from the Obama’s re-election and whether progress can be made before the 1 Jan fiscal cliff deadline. Data-wise Eurozone Retail Sales are expected to have weakened in September, but the year-on-year weakness to have moderated. After the awful Factory orders from Germany yesterday (they collapsed), Industrial production will be keenly watched, with growth already expected week in September, but to have moderated since September 2011. Away from data, watch out for Draghi, and Merkel speaking.

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.

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

• UK                    BRC Shop Price index              Growth accelerated
• Aussie              Construction activity               Contraction slowed
• See Live Macro calendar for all details

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

• Smurfit Kappa Q3 EBITDA up 6 pct yr-on-yr
• Playtech – Q3 gross income up 32 pct
• RPS Group says on track to meet full year expectations
• Fenner full-year profit rises
• Betfair sees Germany contribution minimal, withdraws product
• FirstGroup holds divi at 2011 levels after rail fiasco
• Spirax–Sarco Engineering operating profit up 8 pct
• Randgold Q3 profit falls on lower sales
• Rathbone Brothers eyes acquisitions with placing
• 3Legs Resources encouraged by result of Polish gas well
• Vectura files marketing application in Japan for lung disease drug
• Old Mutual to buy Nigerian business for $20 mln