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

UK 100 called to open +15pts, thanks to Asian markets getting a boost (hitting 7-month highs) from Chinese overnight data being in-line to slightly better than expected, even if the Q3 GDP figure of 7.4% did confirm a slowing trend (slowest growth since Q1 2009). While slower growth is a negative, the accompanying data of Retail Sales, Industrial Production and Fixed Asset Investment surprised to the upside providing some hope that FY 2012 Chinese economic growth can still meet expectations and that a pick-up may occur in Q4.

Sentiment buoyed by news that the government sees a Q4 recovery thanks to rising exports and will continue to aim at stabilizing growth via active fiscal policy and prudent monetary policy. While this may counter hopes of further easing, compounded by authorities monitoring loose policy in the west for signs of rising global inflation, growth is growth. And signs of it holding up will be welcomed by risk-assets. Chinese property prices fell at a slower rate in September.

US Markets closed higher after blowout housing data (consumer confidence barometer), which maintained the positive string of data reports, however, a few poor Q3 earnings reports (Bank of American, Northern Trust) reigned in optimism and underperformance by behemoths IBM and Intel weighing on equities. After the close, results from American Express and eBay were bang in-line with consensus.

Lots of headlines regarding Europe, given the start of another EU summit today. It appears that Greece has agreed with most of Troika’s (bailout lenders) demands on budget cuts (although too late to present at today’s summit). There is also talk that the Eurozone wants to use the ESM bailout fund as little as possible (<€100bn) to help Spain, with the ECB doing more work via intervention in sovereign bond markets. Ratings agency has thrown in its tuppence saying a Eurozone breakup is unlikely, but that risk of a Greek exit is material.

In FX, GBP/USD off recent highs after GBP strengthened on the strong US housing data and prospect of open-ended monetary easing finishing earlier. EUR/USD largely flat, with EUR strength on Spain maintaining investment grade status offsetting USD strength mentioned. GBP/EUR flat, with BoE divided on need for more QE, offsetting EUR strength.

In commodities, Gold trading within yesterday’s range. Silver got a bit more of a bid. US Crude Oil and Brent Crude also trading like gold, with yesterday’s range, unexcited by Chinese data.

Today’s focus will be on UK Retail Sales which are expected to show growth of 0.4% in September and up 2.1% over the last year. While this is implies an acceleration in monthly growth, this is a slowdown of the year-on-year figures.

Around the same time we should receive result on the Spanish 3-10yr debt auction where yields will likely have improved after support for the ESM Enhanced Conditions Credit Line (ECCL) as a means of getting the ECB to act and ratings agency Moody’s reiteration of its investment grade credit rating, both brought down market implied borrowing costs.

In the afternoon, US Jobless claims are seen a touch higher than last week, when they fell more than expected. Later on, the Philly Fed should regain positive territory, while the US Leading Indicators should post slight growth, in contrast to last month’s slight decline. Keep an eye out for results from Morgan Stanley which could have a bearing on the UK banks.

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

• China               Property Prices                                   Slightly slower decline
• China               GDP                                                     In-line
• China               Industrial Production                          In-line
• China               Fixed Asset Investment                       Better
• China               Retail Sales                                         Better
• Swiss                Trade Balance                                     Better
• See Live Macro calendar for all details

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

• Ladbrokes Q3 op profit flat at 49.2 min pounds
• Jupiter sees assets under management rise to £25 bln
• UBM adj operating profit rises, maintains outlook for full year
• Go-Ahead says Q1 trade strong, cautious on outlook
• Hedge fund firm Man Group posts $2.2 bln client outflows
• Cairn plans to drill next Greenland well in 2014
• Low & Bonar says European construction growth slowing
• Hochschild says on target to meet 2012 output target
• Mothercare UK sales return to underlying growth
• SABMiller says H1 lager volumes up 4 percent
• UBM acquires 70 pct stake in EFEM
• Booker Group Plc H1 pretax profit up 13.3 pct to 51 mln stg
• Britvic remains confident despite product recall
• Ferrexpo says Q3 sales rise, costs lower vs. Q2
• Russia’s Evraz Q3 steel output down 3 pct
• Shanta Gold places shares at 17 pence each