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

UK 100 called to open +25pts with Asian markets mixed as Japan’s Nikkei outperforms on optimism that BoJ nominees endorsed by Lower House overnight will be endorsed by opposition-controlled Upper House at tomorrow’s vote and some reports of extraordinary meeting and stimulus announcement at end-March. Australian equities offside after stellar employment data dashed hopes of further easing by the RBA (miners dented by sharp fall in price of iron ore).

Asian markets mixed despite late flourish by US markets to close near highs after strong Jan US Retail Sales data following the fiscal-cliff debacle revived belief in a recovery by the world’s #1 economy (GDP upgrades?), as consumer confidence returns despite headwinds (budget). Thankfully, data not strong enough (a bit like employment figures last Friday) to imply the Fed could soon turn off the easy-money taps. US pushed on despite Europe dented by poor Industrial production data.

Overnight macro data includes strong Aussie jobs report with much higher jobs adds and unemployment rate staying put. In Japan, Industrial Production showed a slowing in growth while Machine Tool Orders remains under significant pressure in terms of annual growth.

In focus today will be the update on Eurozone Employment Data given the impact of austerity measures. The ECB monthly report will be looked to given its potential impact on the single currency EUR, although likely to be very similar to Draghi’s latest policy statement. Spain selling some very long-term debt, after Italy paid highest yields since December yesterday.

In the afternoon, the weekly Jobless claims will be watched for any improvement on the recent below-average readings and whether the continuing claims can keep improving towards breaking below the 3 million mark. US Producer Price Inflation seen accelerating, although core seen flattish.

As European trading closes, leaders will meet for another 2-day EU summit focused on reviewing economic policy and promoting jobs and growth, not viewed as a make-or-break unlike previous meetings (clichés under promise/over deliver and don’t rock the boat come to mind), although some have pointed to the absence of Cyprus from the agenda and the EU parliament’s rejection of the 7yr budget as interesting.

UK 100 off back up around the 6500 level, although the pause across global markets appear to continue given the mixed Asian performance, mixed macro data and mixed reaction to it. Good data is good, and bad data is both good and bad, but appetite for risk seems to remain dependent on presence of monetary stimulus prop and so data that is too good is bringing about fears that the prop could be kicked out from underneath the foundations of the recent rally. While the index didn’t correct back as far as the 6420 expected, it came close and could suffice for the grind higher to resume.

In FX, the GBP/USD found some support but still below 1.50 level, with trade-off between optimism on US and UK economic and finance keeping the pair under pressure, although after the significant fall from the beginning of the year, some ask whether declines are over. EUR/USD weakened back below 1.30 to test 200-day moving average after poor industrial production data.

In commodities, Gold remains in narrow range just below $1600 although weakness in EUR/USD may influence direction. In Oil, US Light Crude still wanting to test $93.5 with some support at $92.5 while its Brent cousin continues to suffer, testing below $108 and narrowing the spread between the two oils further.

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

• Aussie              Employment                            Much Better
• Aussie              Unemployment                       Better
• Japan               Industrial Production              Deteriorated
• Japan               Machine Tool Orders              Deteriorated

See Live Macro calendar for all details

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

• Investec says FY op. profit seen up 20-23 pct y/y
• Salamander Energy FY 2012 revenue of $368.0 MLN
• Kentz awarded a significant contract in Canada
• Centamin ups production forecasts for Sukari gold mine
• Ocado 12 week sales up 14.4 pct
• Ocado in talks with Morrisons over online licensing deal
• Trinity Mirror reports higher profit, expects trading environment to remain difficult
• Elektron agrees to sell carbide business
• Savills profit rises 21 percent on Asia, London
• F&C underlying 2012 earnings per share up 29 pct
• Northgate says trading at lower end of market view
• Aggreko agrees power deal with Mozambique and Namibia
• TT Electronics full-year pretax profit falls 13 pct
• Morrisons to move into online grocery as profits fall
• Morrisons says online move not dependant on Ocado talks
• Home Retail lifts profit forecast as Argos sales rise
• Playtech beats earnings forecasts after strong 2012