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

UK 100 Index called to open flat at 7250, back from overnight highs of 7265 having been turned back by a 7-day trendline of intersecting resistance. Bulls need a break above 7260 to inspire hope of getting back above 7300. Bears are merely looking for a retrace towards last week’s sell-off lows of 7200. Watch levels: Bullish 7265, Bearish 7240.

Calls for a flat open come after a down day in Asia (excl. Japan) and despite yet another record high close on Wall Street. This in spite of yet another hurricane bearing down on the Caribbean and a looming Fed policy update tomorrow having potential to impact multiple asset classes.

Gains for Japan’s Nikkei are only because the index is playing catch-up after a long weekend and thanks to fresh Yen weakness to give exporters a boost. Australia’s ASX is again hindered by losses for Gold Miners after the safe haven metal gave up yet more ground amid buoyant risk appetite and expectations of tighter Fed policy.

In UK Index news: GlaxoSmithKline gets FDA approval for Trelegy Ellipta in COPD, the first once-daily single inhaler triple therapy for US COPD patients. French Connection; H1 revs -1.6% (-4.2% at constant FX). Wholesale +7.2% (+2.6% ex-FX) offset by reduced store portfolio; Retail op loss reduced to 18.3%. Reckitt Benckiser appoints Christopher Sinclair as new Chairman.

Ocado Q3 Group Revenues +14.3% YoY, retail +13.1%, Average orders +16%, continues to acquire and retain customers. Gem Diamonds announces recovery of high quality 115 carat, D colour Type IIa diamond from the Letseng mine in Lesotho, its fifth 100+ ct find of the year.

Gulf Keystone progressing in ongoing discussions with MNR regarding commercial and contractual conditions, in particular for Shaikan. Intends to invest further to ensure 40K bopd production and increase to 50K. Sinclair Pharma revenues +16% (+6% at constant FX), gross margin expansion.  

US equity markets continued their recent impressive run of form, with the Dow Jones notching its fifth consecutive record close and the S&P 500 closed at a closing high for the second day in succession. The Dow outperformed as Boeing one again led the index to a record close, while Financial strength ahead of Wednesday’s Fed meeting lifted the S&P higher. The Nasdaq climbed to an intraday record closing high before closing 0.1% stronger.

Crude Oil benchmarks failed yesterday to return to last week’s multi-month highs as gains were capped by a US dollar recovering from 1-week lows, increasing the relative price of Oil. With that said, however, both major global benchmarks remain within touching distance of last week’s levels, with Brent Crude remaining supported above $55 while US Crude continues to hover around a $50 handle ahead of Friday’s OPEC/non-OPEC meeting.

Gold has fallen further from last week’s 13-month high, falling to a fresh 2-week low as rising bond yields and a stronger US dollar continue to dampen demand for the non-yielding safe haven asset. Tomorrow’s FOMC meeting will be in focus for the precious metal, with the US central bank expected to announce the timetable for the trimming of its balance sheet, a hawkish move. While off overnight lows of $1305, Gold has failed to retain a $1310 handle.

In focus today will be ZEW Surveys (10am) from the Eurozone and Germany, both expected to deliver improvements in ‘Expectations’ even if the German ‘Current Situation’ remains largely unchanged. Eurozone Construction Output may garner some but not quite as much attention.

Thereafter, it’s all quiet until US Housing Starts & Building Permits (1.30pm), a consumer confidence proxy, which may suggest an increase for the former – rebounding from last month’s drop – but a slight slowing for the latter, adding to last month’s decline.

With inflation so key for the Fed as we head into the latest policy update, the August reads for US Import & Export Price growth will be looked to for clues about inflationary pressure, the pace of the former expected to have quickened while the latter cooled.

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

• Reckitt Benckiser Appoints Christopher Sinclair as New Chairman
• ConvaTec GentleCath Glide and me+ Launches in Europe
• GlaxoSmithKline: Trelegy Ellipta: FDA Approval in COPD Received
• ITM Power Sale of 1.1MW Power-to-Gas Plant to EnergyStock
• Gem Diamonds Recovers 115 Carat Diamond in Lesotho
• Gulf Keystone progressing in ongoing discussions with MNR
• Ocado Q3 Group Revenues +14.3% YoY
• French Connection; H1 revs -1.6% (-4.2% at constant FX
• Sinclair Pharma revenues +16% (+6% at constant FX), gross margin expansion.