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

UK 100 called to open +20pts at 6755, thanks to a positive session in Asia, snapping a four-day drop in the region, after a strong turnaround by US stocks to near breakeven despite a tick up in US macro data potentially adding to the Fed-tapering-sooner argument.

Some general hesitation to jump on the risk wagon – hence sideways action of last few days – ahead of an ECB policy decision (change?) on Thursday, US Non-Farm Payrolls on Friday, the Chinese political meet at the weekend, and of course Fed tapering.

Fed speakers still delivering mixed messages with Lacker saying effectiveness of QE uncertain and government shutdown shouldn’t have been a reason to avoid tapering. Williams wants evidence US can grow above trend before cutting stimulus.

Note the WSJ’s Fed-watcher Hilsenrath article helping sentiment citing a paper that concludes the central bank would be able to drive down US unemployment faster if it promised to keep rates unchanged for longer than currently priced in.

Note also the increasing number of brokers calling for the FOMC to cut its unemployment threshold when tapering begins in order to combat the inevitable rise in market rates. This would certainly serve to keep markets supported by easy policy.

Market hesitation ahead of ECB and hopes of rate cut after Brussels cut Eurozone growth expectations and reported slower inflation and ECB president Draghi comments that single currency region recovering slowly and overall economic situation has improved slightly.

Overnight BoJ minutes showed a few members saw CPI rising but may slow temporarily on energy prices while economy recovers modestly and governor Kuroda said Japan on path to 2% inflation and the bank will not hesitate to adjust policy if required. Japan’s Nikkei outperforming in the region on a weaker JPY and Toyota raising FY guidance.

China’s PBOC said economy showing steady improvement, but faces challenges while it also improved the disclosure of its liquidity management operations. Data-wise, UK Shop prices deflated further in October while the Aussie Trade deficit improved as imports fell.

In focus today we have Eurozone PMI Services data seen mostly above 50 (growth), UK Production expected to have rebounded in September, Eurozone Retail Sales seen weaker but German Factory Orders rebounding. The NIESR also updates on UK GDP.

The UK 100 remains in sideways 6720-6800 trend, potentially holding this rage until tomorrows central bank updates (BoE/ECB).

In FX, USD basket found support at 80.6 after slowing up following strong rise. GBP/USD regained 1.60 after breaking above trendline of falling highs from 25 Oct. EUR/USD held around 1.35 ahead of ECB decision tomorrow.

Gold still under pressure from strong USD, off worst levels of $1305 but sideways around $1315 . Resistance still strong from falling 8-month trendline at $1350.

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

• UK            BRC Shop Prices                              Miss, Deteriorated
• AU            Trade balance                                 Beat, Improved

See Live Macro calendar for all details

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

• FirstGroup posts 44 pct rise in underlying H1 profit
• Experian buys U.S. healthcare data provider for $850 million
• EasyJet says October passenger traffic up 5.4 pct
• DCC increases dividend after 11 pct growth in revenue
• Foxtons says Q3 group turnover rises 17.9 percent
• Howden Joinery sees profit at top end of expectations
• Millennium & Copthorne Hotels Q3 revenue up 3.1 pct
• Lancashire says third-qtr profit fell to $25.7 mln
• Millennium & Copthorne Hotels to sell Singapore shopping centre
• Alent says Q3 trading below expectations
• Moneysupermarket.Com sees year earnings ahead of expectations
• Moneysupermarket.Com appoints Matthew Price CFO
• Mondi says Q3 underlying operating profit up 25 percent
• Premier Foods appoints Ondra Partners to seek investor for bread unit
• Persimmon says has 650 mln stg forward sales reserved beyond 2013
• Old Mutual assets lifted 14 pct by better markets
• JD Wetherspoon Q1 sales up, increases expansion target
• Miner Centamin posts Q3 profit drop, on track to exceed targets