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

UK 100 called to open -10pts after another positive US close (more records) following a strong European close and after a negative Asian session thanks to mixed data.

US bourses supported by reduced concerns on global growth (thank you China trade data and German output/orders), suggestions the ECB looking at how to kick-start ABS market (asset Backed Securities; yes the birthplace of US housing crisis), and despite Dallas Fed president Fisher saying inflation not a problem (QE not working because fiscal deadlock) and ECB’s Mersch saying rate cuts offer limited help.

Main events overnight were a surprise rate cut by South Korea, a strengthening in JPY dented Japan equities and Australia ironically suffering from much better than expected employment data, which comes just a day after a surprise rate cut – the AUD gaining on reduced expectations of another cut coming soon.

Overnight data also included stronger than expected Chinese Consumer Price Inflation which improved on March, and moved towards need for curbs rather than stimulus, thus hindering equities. However, conflicting message from Producer Price Inflation was much weaker (14^th month down in a row), suggesting continued need for stimulus.

In focus today will be the ECB’s monthly report after the recent rate cut and comments about standing ‘ready to act’. Updates on UK Production are expected to show growth slowing in March, dented by cold weather. Thereafter the BoE is not seen changing policy on interest rates or stimulus via asset purchases with a change of governor so close.

Weekly US jobless claims are seen stable. The NIESR UK GDP update will be of interest after the nation avoided the dreaded triple-dip and US Wholesale Inventories is expected to show a rebound in March.

UK 100 made strong break above March highs. UK index doing well, but still not trading pre-crisis highs yet, like peers. Bulls eyeing mid-2007 highs of 6770. Yesterday saw 6600 touched showing desire to get there. Then again, after such a rise of late from 6440 pause, potential for another breather.

 In FX, GBP/USD trading solidly between 1.55-1.56, with little expectation of any surprise from the BoE today. Uptrend remains from March, on possibility of longer term increase of Asset purchases by Fed. EUR/USD back up at 1.315, having touched 1.32 yesterday, helped by more strong German data/sovereign debt auctions and ECB’s ‘ready-to act’ and maybe in ABS, boosting regional sentiment.

Gold back near top of $1440-1480 range benefiting from weaker USD, more a function of peer’s strength than need for safehaven/hedge for inflation. Still potential for recent 2-week sideways move to have been pause before breakout to the upside.

Oils also trading in narrow ranges at top of 1-month rally. US Light Crude traded back from $97 after finding support at $95. Brent Crude back down below $104, but with support at $103.5. Moving more on global growth sentiment than USD?

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

• China               Consumer Price Inflation        Better
• China               Producer Price Inflation          Worse
• Aussie              Employment                            Better
• Japan               Sentiment Indices                   In-line
• See Live Macro calendar for all details

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

• Experian annual earnings up 7 percent
• McBride says revenue down 5 percent on last year
• Beazley says Q1 premiums up 11 pct to $518 mln
• Balfour Beatty wins California rail extension
• TVC says to return 50 mln euros to shareholders
• IMI says January-April reported revenue down 1 pct
• United Drug first-half profit rises 8 pct
• Spirax-Sarco says 2013 has started in line with expectations
• Kingspan warns on tough H1 after slow start to yr
• Morrisons’ quarterly sales fall again
• Solo Oil acquires stake in Swiss minerals firm
• Ophir Energy extends BG Group east Africa rig share deal
• SkyePharma says trading broadly in line
• Lonrho says 2013 outlook remains in line
• Morgan Sindall Q1 margin below expectations
• Barratt Developments says market backgroup most positive in 5 years
• Hammerson says confident in earnings outlook
• London Mining Q1 sales rise, sticks to 2013 targets
• SuperGroup Q4 sales up 15.3 pct
• ENRC sees Q1 copper ramp up, weather hits iron ore output
• Tullett Prebon says regulation, tough markets hit revenues