FTSE 100 Index called to open +75pts at 6135 thanks to an overnight break above 6100 and, more importantly, beyond the bugbear trend of falling highs from mid-August. This extends the rebound from September lows 5870 and, should we hold above 6130, there is the possibility of a double-bottom reversal completing at 6400. Updated watch levels: Bullish 6150, Bearish 6120. The positive opening call after China PMI Manufacturing data, whilst still contractionary, stabilised around a 3yr low amid tentative signs that government stimulus is steadying weakness. Coupled with hopes of more accommodative policy being forthcoming to ensure a return to growth is seeing yesterday’s risk-on sentiment carry through. PMI Services still in growth, but at 14-month low. Asian bourses (ex-China and Hong Kong on holiday) delivering another session of gains, putting the worst Q3 in 4 years behind them, and taking the baton from US and Europe advances. Note Japan’s Nikkei helped by hopes of more government and BoJ policy easing and the China slowdown being stemmed, while Australia is benefiting from similar optimism related to its biggest trading partner China. US equities did well yesterday, posting good gains as they saw out the worst quarter for the market in four years, one that included the largest percentage declines for U.S. indices and the most volatility since 2011. We needn’t mention the reasons (Oh ok, that’ll be China, just in case you’ve been on holiday). However there is concern among Wall Street analysts who expect the next round of quarterly corporate earnings will disappoint for the second year in a row. No let-up in volatility, no let-up in opportunity. Political risk abated with news that another US government shutdown has been averted, until December at least, although the situation in the Middle East remains heated with major allied doubts over what Russia is targeting in Syrian air-strikes. Claims that no ISIS are present in the region bombed are begging more questions about what exactly Putin is up to. On the Fed rate hike front, tradition apprehension concerns about tomorrow’s Non-Farm Payrolls US jobs update are taking a back seat for once, and quite rightly so, given that what kept the US Central Bank from raising rates last month was deflationary pressure, slowing Emerging Market growth and financial market volatility, not the jobs situation which is the one half of its mandate which is actually on target. In focus today we have Eurozone Manufacturing PMIs seen showing slight deterioration from last month but still comfortably in growth territory. The same is expected for the UK. While any major improvements might boost optimism, any misses could just fuel hopes of more ECB stimulus, buoying risk appetite. In the afternoon, US PMI Manufacturing is forecast unchanged, but showing better growth than nearly all Eurozone constituents. US Construction Spending should continue to advance, although ISM Manufacturing may have given up ground even if ISM Prices Paid inched up in the face of deflationary pressures. Note the Fed’s Lockhart and Williams speaking this evening. US Crude inventories remain at levels not seen since the 1980s which caused some volatility in the oil sphere overnight and sees prices tightly range-bound this morning. US Light stable around $45 while Brent Crude much the same at $49. Note USD basket on the up again with US Fed rate hike chatter still very much in fashion (yawn), sure to be weighing on commodities. Gold ($1112), back down below $1120 as markets breathe a risk-on sigh of relief at having just about survived a tumultuous Q3, while a Q4 looking to present similar challenges could see the price pop back up again in the coming days or weeks, especially if $1112 holds as support.

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