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

UK 100 Index called to open +5pts at 6815 but having given up overnight gains. This keeps the index under pressure from a trend of falling highs since last Thursday’s September peak. It also puts it at the mid-point of its summer 6600-6850 range. The Bulls will be looking for the index to hold above 6800 and break beyond the trend falling highs of the last 24 hours. The Bears will be hoping for 6800 to give way to maintain the downtrend. Watch levels: Bullish 6825, Bearish 6795.

Calls for a muted open come after a largely negative session in Asia contrasts with a positive stateside finish, appetite for risk having moved on from the US Presidential debate and back focusing on the woes of Deutsche Bank and the Oil meeting Algiers. Sentiment flat thanks to oil off its lows, but expectations rather low that anything concrete will come of this week’s informal meeting and that we will have to wait for OPEC’s formal meeting November.

Japan’s Nikkei hindered by a still strong Yen with USD/JPY still knocking around the 100 mark. Australia’s ASX and its Energy contingent continued to suffer oil price volatility while the sell-off in metals including Copper and Gold has hurt miners and financials remain under the cosh, RBS and Standard Chartered adding to existing Deutsche Bank woes for the troubled sector.

US equities finished trading higher in reaction to Monday’s US Presidential debate. A strong morning rally was followed by afternoon consolidation, with the Technology sector leading the way for markets up 1.2%. Oil prices weighed once more on the Energy sector, although this was not enough to offset the positive reaction to the perceived Clinton debate victory.

Both Brent and US crude have consolidated gains made overnight during Asian trading hours, up by $0.35 and $0.33 respectively since the close in London, on the premise of a deal being reached at the November meeting of OPEC. However, prices will once again be at the mercy of OPEC oil ministers in Algiers today, with Iranian stubbornness at odds with Saudi Arabian willingness to reach a compromise. The reaction to yet more reports of offers and rejections of a potential production freeze deal are expected to increase volatility today, potentially (although unlikely) culminating in a production freeze deal.

Gold was subject to a breakdown of support last night, falling to one-week lows subject to a strengthening US Dollar. The safe-haven asset, a go-to for investors amid predictions of greater uncertainty in global markets, falls as investors declare Hillary Clinton, seemingly the more predictable Presidential candidate, the winner of Monday’s Presidential debate.

In focus today will be what does or doesn’t result from this week’s much hyped OPEC-led production freeze meeting on the sidelines of the IEA forum in Algiers. Oil prices remain as volatile as ever, with another sell-off followed by an overnight bounce.  Conflicting messages are plentiful in supply. Iran’s rejection of a freeze if the Saudis cut production leaves us no closer to an agreement, especially with Russia wanting an OPEC agreement before getting involved.

Major data today is limited to US Durable Goods Orders, forecast down in August after strong growth in July, and US DOE EIA Weekly Oil Inventories which could influence the oil price along with the aforementioned Algiers meeting. Note US API data last night suggesting a surprise drawdown of 752K barrels (fifth week in succession), in stark contrast to a consensus build of 3m. Could EIA data this afternoon surprise too to make it a fourth draw in a row, helping oil prices?

Speeches are almost too numerous to mention today with Fed Chair Yellen (3pm) giving her semi-annual testimony to the House Financial Services Committee on the Fed’s “Supervision and Regulation of the Financial System” while colleagues Kashkari, Bullard and Evans address various conferences. Mester speaks about economic outlook and monetary policy tonight (9.35pm).

On the other hand, with the latest Fed update barely a week old, it could be that it’s ECB President Draghi’s exchange of views with Germany’s Parliament (Bundestag) at 2.30pm on “Current developments in the euro area” that dominates, especially given the current woes related to Deutsche Bank. While his speech is not public, the text will be available on the ECB website, and he will give a short press statement at 4pm, just before the European close.

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

• TUI raises operating profit guidance for 2015/2016
• Sainsbury’s expects tough market to persist as sales fall again
• Clinigen Group reports FY reported revenue £339.9m
• Pets At Home appoints Mike Iddon as chief financial officer
• Engineer Smiths Group posts -2% in underlying FY revenue
• Deutsche Post buys UK Mail to establish cross – border parcel network
• AA says see no impact on operations from Brexit related issues
• Stobart appoints Mark Adams as CFO
• Takeaway.com IPO price guidance 21.50 – 23.00/share – bookrunner
• HMS Group H1 profit for period RUB 696m, -37% YR/YR
• GSK, Oncodesign announce agreement for Oncodesign’s Acquisition of GSK’s Research Centre in France
• Oil climbs after industry data shows U.S. inventory draw
• Nickel holds near 7 – wk high as Philippine crackdown deepens