In the US overnight, the major indices finished largely unchanged as stronger-than-expected consumer confidence and a rise in home prices helped ease fears that the economy is faltering.

Financials were helped by regulatory approval for a Chinese investment in Morgan Stanley.

The NASDAQ was the worst performer, down 0.3% while the Dow Jones Industrial Average and S&P 500 were 0.1% firmer and flat respectively.

Across Asia, regional markets have shrugged off the flat US leads to be higher in early afternoon trade, with Japanese exporters benefitting from a weaker yen and stronger-than-expected Chinese PMI data boosting overall sentiment. As at 06:00, the Nikkei 225 and Kospi are the top performers, up 0.8% and 1.2% respectively. The Shanghai Composite and Hang Seng are 0.1% and 0.4% firmer.

In Australia, the ASX 200 is 2% firmer at 4493, right on its highs of the day. Gains for the day are broad-based and have been led by the materials and financial sectors which are both surging by more than 2%. While the market opened firmer, gains accelerated after stronger than expected Chinese PMI data and Australian GDP numbers, which boosted not only equities but also the AUD.

The positive start to September by Asian markets looks set to wash across the European session too. London is also set to stand out once again at the open after a solid performance by mining stocks in Australia, while European indices are pointing fractionally higher at present, although many will be mindful of the carnage markets have seen historically in this month.

As for the fundamentals, various eurozone manufacturing PMI figures will be under scrutiny this morning whilst the ADP payroll reading from the US may offer some early indications ahead of Friday's non-farms. In terms of earnings data there are some high profile figures due from the US - a sales update from Ford and quarterly earnings from HJ Heinz being amongst those likely to headline.

The long weekend on Wall Street that's coming up could well serve to leave many traders reluctant to get too committed in the first few days of September but the summer lull is set to be left behind. Ahead of the open we're calling the FTSE up 25 at 5250, the DAX up 9 at 5934 and the CAC up 3 at 3494.