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

  UK 100 called to open -50pts at 6505 (note Mon +50pts, Tues -50pt) with another negative session in Asia – Japan’s Nikkei showing continued volatility with a further 500pt decline (almost 4%) – after another bearish handover from the US markets as uncertainty sticks around regarding the US Fed and its QE3 stimulus programme and IMF Chief Lagarde spoke of a softer patch in the global economy and downside risks.

 Dallas Fed President revived tapering fears saying the Fed should slow QE3 but not stop it. George argued for a slowing, and Raskin noted progress on employment but much left to do. Helpful! Interesting conspiracy theory that Fed orchestrating this conflicting chat from members in order to take the froth out of markets and avoid QE3 creating asset bubbles.

 Japan suffering after a growth strategy speech by PM Abe, vowing to slay the monster of deflation with fiscal and monetary policy, failed to impress. Australia weak after a big deterioration in the AIG Services Index and slower GDP growth than expected.

 Back to global worry #2 and China also weak despite the HSBC Services PMI being pretty much unchanged in May, with Fed tapering fears dominating global growth sentiment and Europe’s solar panel import duty reprieve not being considered generous enough.

 In focus today, we have Eurozone Services PMI with consensus expecting persistent weakness across the board, Germany the only member knocking on the door of growth. Note however, UK Services PMI seen showing improved growth. Good news.

 Eurozone GDP seen unchanged from preliminary weakness, but traders would likely welcome any upside surprise after the IMF cuts German and French estimates for 2013/14. Eurozone Retail Sales seen under continued pressure from regional austerity.

 In the afternoon, the US ADP Employment Change will be key ahead of Friday’s Non-Farm Payrolls, with job adds of 170K expected after 199K last month and NFP seen flat at 175K. US Factory Orders seen rebounding in April and consensus puts ISM Non-Manufacturing (Services) a touch lower in May, but still in growth. No pressure after disappointing manufacturing on Monday.

 UK 100 tried lower late yesterday and again this morning, testing the round number 6500. As highlighted yesterday, correction still in progress, with the longer term graph showing the extent of the down move and potential for both bounce and continued declines. Will After falls of 5.5% from highs, and 4.4% from 6800, sentiment still on a knife-edge.

 In FX, GBP/USD continued to benefit from fears of QE3 stalling the economy and more QE weakening the USD. Support around 1.53 overnight, upside potential to May high of 1.56. EUR/USD at 4-week high of 1.31 with May highs of 1.325 likely eyed amid market volatility on QE3. USD/JPY back below 100 after poor received speech by PM Abe. Reversal from 103.75 highs on 22 May still in progress.

 Gold back up above $1400 but still trading around the level and struggling to get above the $1420 high of late May. Still moving on USD volatility on QE3 taper uncertainty. US light Crude off its rebound highs of $94.5 yesterday but still in 1-month downtrend of falling highs. Same story for Brent Crude with a slow up at overnight highs of $103.5.

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

UK 100 Ex-dividend impact: -4.86pts

Associated British Foods (ABF): dividend 9.35p  / index impact -0.123 pts

National Grid (NG.): 26.36p  / -3.764pts

WPP (WPP): 19.71p / -0.974pts

Overnight Macro Data: (Source: Reuters/DJ Newswires)

• UK                    BRC Shop Price Index             Deteriorated
• Aussie              AIG Services Perf                    Deteriorated
• Aussie              GDP                                         Worse
• China               HSBC Services PMI                  Flat

See Live Macro calendar for all details

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

• Mears says trading in line across both core divisions
• Moss Bros sales up over last four months
• RPC Group adjusted pretax profit falls
• Xtract Energy names Joel Silberstein as CFO
• Mediterranean Oil & Gas says CIL deal now unconditional
• Moneysupermarket.Com to pay 70 mln stg to shareholders
• Tesco reverts to quarterly sales decline in UK
• Plastic-packaging company RPC’s profit falls
• Kentz says secures commissioning contract in Alaska
• Synergy Health full-year adjusted profit rises 16%
• Porvair says trading “satisfactory”, buys filter co
• Green Dragon Gas raises cash to fund growth