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

UK 100 Index called to open flat at 7530 (ex-div 7pts), having moved largely sideways overnight. Bulls need a break above 7535 to inspire confidence in regaining 7555 or better. Bears are hoping this is a bearish pause after yesterday’s pullback, with a breakdown at 7525 opening the door to 6-day rising support at 7510. Watch levels: Bullish 7535, Bearish 7525.

Calls for a flat open come even after a positive finish on Wall Street and Asia following suit overnight. The latest Fed minutes left the door wide open for another hike in December, which markets are expecting (80% probability). However, confusion among Fed voting members about persistently low inflation in spite of low unemployment has muddied the outlook about the pace of further hikes.

The USD has thus extended its recent weakness, buoying commodity prices, however, this is also hampering the UK UK Index by having further strengthened GBP – a negative for its army of internationally exposed constituents, reducing the value of their profits and often significant dividends. Miners trade lower on Australia’s ASX amid China steel production cuts.

UK Index headlines this morning include Sky comparable revenues +5% in Q1, EBITDA +11%, new customers +51%, sees trading in-line with views. Acacia Mining sales below production, as expected, due to export ban. More details on 20 Oct. Tullow Oil awarded four 90% onshore licences in Ivory Coast. Ultra Electronics JV awarded $220m IDIQ option exercise for US Navy sonobuoys.

UK CMA provisionally cleared JustEat acquisition of Hungryhouse. Hays says conditions remain good in the vast majority of our International markets; UK stable. WH Smith says Travel revenues now exceed those from High Street, dividend +10%, still highly cash generative. Booker total sales +2.5%, PBT +9%. Non-tobacco sales up, tobacco down due to legislation. No forward looking statements due to offer period.

US equity markets posted a trifecta of record closes as Fed minutes all but confirmed a December rate hike in spite of concerns about subdued inflation. The Dow Jones and S&P 500 both finished 0.2% higher at new all-time bests thanks to strength for Johnson & Johnson and McDonald’s on the former, while Real Estate led the latter and the Tech-focused Nasdaq outperformed, closing up 0.25%.

Crude Oil prices have retreated overnight as API reports a shock build in inventories last week, missing expectations for a drawdown. This has seen global benchmark Brent retreat from $57 to $56.5, while US crude dipped from a near 10-day high of $51.4 to test $51. All eyes will now be on this morning’s IEA monthly report and this afternoon’s official EIA inventories data for confirmation of the surprise API build.

Gold has extended its rally overnight as the Federal Reserve, despite pointing towards a December rate hike, noted that weak inflation may not be ‘transitory’ as first thought. This saw the US dollar weaken to the benefit of the precious metal, climbing to a 3-week high of $1296. The greenback will remain a key driver of sentiment throughout the day as the IMF central bankers’ conference continues.

In focus today will be Eurozone Industrial Production (10am), forecast to continue its rebound from a negative June and flat July, although the annual rate may have cooled to its slowest since April. This afternoon, US PPI (1.30pm) offers the latest US inflation prints (before CPI tomorrow) with expectations for acceleration in headline producer prices but Core holding largely unchanged.

US Oil Inventories (4pm) are of interest in light of last night’s surprise API inventory build, especially with consensus for a drawdown in EIA inventories of 1-2m barrels (note consensus may get updated). In the meantime, listen out for the monthly IEA report (10am), hot on the heels of yesterday’s OPEC update, with just as much potential to move prices.

Speakers are in plentiful supply today after the Bank of England (BoE)’s Credit Conditions and Liabilities Survey (9.30am) for the third quarter, which could have a bearing on UK Index banks.

US Treasury Secretary Mnuchin is appearing on CNBC at 12:45pm as the race for the next Fed chair hots up, with the influential member of the Trump administration likely to be pushed for his preferred candidate having reportedly backed current Governor Powell for the job behind closed doors.

At 3.30pm in Washington, Powell delivers a keynote address on Emerging markets, his colleague Brainard and ECB President Draghi are panel participants at the IMF’s “Rethinking Macro policy” conference while ECB Chief Economist Praet speaks at an investor seminar.

The evening sees BoE Chief Economist Haldane (6.45pm) and the ECB’s Coeure (8.45pm) on panels at the same “Rethinking Macro Policy” conference at the IMF meet.

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

• Hays 1Q Comparable Net Fees +10%; Tough Public Sector Hits UK, Ireland
• Booker Group 1H Pretax Profit and Revenue Increase
• Tullow Oil Buys Land in Ivory Coast for Oil Exploration
• SKY PLC Sees Trading in Line With Views
• Acacia Mining sales below production, as expected, due to export ban
• Ultra Electronics JV awarded $220m IDIQ option exercise for US Navy sonobuoys
• UK CMA provisionally cleared JustEat acquisition of Hungryhouse
• WH Smith dividend +10%, still highly cash generative