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

UK 100 Index called to open flat at 7270, back from an unsuccessful challenge on 7290 that adds to the downtrend from mid last week. Bulls now need a break above falling highs at 7285 before being able to consider a conquering of the troublesome 7300. Bears now even more hopeful of a full retrace to recent lows around 7200. Watch levels: Bullish 7290, Bearish 7255.

Calls for a flat European open after a mixed US close – industrial & financials welcomed Fed policy tightening, tech suffered – was echoed in Asia overnight. However, fresh M&A in Europe (UniCredit/Commerzbank speculation, CRH/Ash Grove announcement) is helping buoy sentiment.

While the UK Index would normally benefit from a stronger USD helping its international exposure, the GBP is proving rather resilient. And with the stronger USD hampering commodity prices the big Miners may hold the index back this morning even if financials benefit.

Japan’s Nikkei outperforms thanks to a Fed-inspired stronger Greenback, pushing the Yen lower to the benefit of exporters, while financials liked the prospect of slighter tighter US policy paired with a steady-as-she-goes easy policy update from the Bank of Japan.

Australia’s ASX is the standout lower with losses of almost 1% as the all-important dollar-denominated commodity sector was dented by a fairly upbeat Fed’s policy update last night. Especially safehaven Gold, which thrives on loose monetary policy, but also Copper and Iron ore on the read across of a stronger USD on emerging markets.

In UK Index news: CRH has agreed to buy US cement company Ash Grove for $3.5bn. Johnson Matthey backs fiscal 2018 guidance of 6% sales growth. Fresnillo says its operations are not impacted by the Mexican earthquake. Drax appoints CFO Will Gardiner as New CEO.

Capita reports fall in H1 pre-tax profit, trading in-line with expectations, div unchanged, bid pipeline £3.1bn. Mitchells & Butler says trading has been more challenging in recent weeks, particularly given poor weather.

US equity markets closed mixed on Wednesday after the key Fed monetary policy update, with the Nasdaq retreating from record highs while the Dow Jones and S&P 500 continued their recent impressive run of form. The Dow outperformed once again as Boeing extended its run of record highs, while the Industrial and Material sectors lifted the S&P higher and the Nasdaq finished lower as Apple and Microsoft both closed weaker.

Crude Oil benchmarks have retreated from yesterday’s EIA inventory inspired highs as the stronger dollar resulting from the Fed monetary policy update has capped gains. While global benchmark Brent has broken out from its week-long $55-56 range to a fresh 5-month high (and a bullish pennant pattern?), US Crude remains bound by $49.75-51 despite trading a fresh 4-month high yesterday.

Gold is trading sharply lower, below $1300 for the first time in September, as the Fed’s monetary policy update sees investors flee from the non-yielding asset. The resultant stronger US dollar puts a further dent into sentiment, increasing the relative price of the precious metal. While off overnight lows of $1296 courtesy of 5-month intersecting support, overnight falling highs are continuing to pressure Gold.

In focus today will be digestion of last night’s US Fed monetary policy update, even if it did simply deliver exactly what it said it would. No change to interest rates but the door left further ajar for a December hike, pushing the market implied-probability to 65% from 50%.

The USD has thus strengthened accordingly (but yet to overcome April falling highs) as this would make it three hikes for 2017 – its original forecast. This in spite of choppy data, especially absent inflation, that could yet see it hold off into 2018.

More significantly, however, is the US central banks starting to unwind its QE ballooned balance sheet. This is the next very well-flagged step on its path to normalisation of extraordinary policy measures, after QE bond buying was tapered to zero and rate rises began in late 2015.

Data-wise, UK Public Sector Net Borrowing (9:30am) is expected to have increased significantly in August, in-line with the long-term trend of mid-year expansion. Mortgage Approvals are also expected to have ticked up to a 5-month high.

This afternoon, the US Philly Fed Outlook (1:30pm) is expected to drop to its lowest level since Donald Trump won the Presidency, while House Prices (2pm) are seen picking up from May’s 4-year low. Closer to home, Eurozone Consumer Confidence (3pm) is forecast to hold within touching distance of June’s decade-long highs.

A European-heavy speaker roster includes appearances from ECB Chief Economist Praet (11:30am), chairing a panel titled “Low inflation: Lessons from the past! Lessons for the future?” while ECB President Mario Draghi (3:30pm) opens the second annual European Systemic Risk Board conference this afternoon.

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – it’s all part of the service.

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

• British lender Paragon to reorganise business lines
• Troubled British outsourcer Capita confident of outlook, still no CEO
• Compass Group says Richard Cousins to step down as group CEO on March 31, 2018
• Fresnillo says no impact on production due to Mexico earthquake
• IG Group’s Q1 revenue jumps on expanding client base
• Co – Operative Group first half underlying profit down 48%
• President Energy says acquisition of Chevron’s 100% operated interest in oil producing assets
• Rentokil names Richard Burrows as senior independent director
• Britain’s Kier reports 3.5% rise in full – year profit
• Kier says confident of achieving double – digit profit growth in FY 18
• Miner Hochschild boosts hunt for acquisitions – executive
• Gold hits 3 – week low; strong dollar, Fed rate hike view weigh
• Oil dips on rising U.S. crude inventories and production