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

UK 100 called to open +5pts, with Asian equities moderately higher (although, Australia in the red) thanks to macro-economic data continuing to suggest a better global outlook and central bank intervention supporting the prices of risk assets like equities and commodities

Better date from US employment and PMI Manufacturing (EZ + US) all added to the argument on Friday helping US markets close higher, while overnight we had China Non-Manufacturing edging higher into growth territory, further boosting the economic recovery calls. However, UK Lloyds Business Barometer dropped back sharply and Australian Building Approvals missed expectations by quite a margin.

In focus today will be the Eurozone Sentix Investor Confidence, for which the negative reading is seen improving. UK Construction PMI also seen improving, just shy of the 50 mark which distinguishes between growth and contraction. Eurozone Producer Prices seen confirmed at negative in December but still above the 2% growth level over the last 12 months. In the afternoon, consensus looking for US Factory Orders to grow 2% in December after a flat November.

Later in the week, watch out for Services PMI from UK, EZ and US where readings are mostly seen remaining below 50, bar Germany and the US. Thursday’s ECB rate decision will again likely be less of an event than the press conference by the president Draghi. The UK’s BoE and Australia’s RBA also meet, but are not expected to alter policy. Given its importance in the region, German Factory Orders and Industrial Production will be much watched.

UK 100 futures but struggling to make a decisive breach of the 6350 level although the fact that the Dow Jones close above the key 14,000 level on Wall Street will likely lead to much discussion about the rally continuing. As we pointed out in our weekly roundup, we still believe a correction could materialise, questioning whether the reward of potentially limited upside to 6400 is worth the risk of potential big correction to 6150? Could Eurozone woes (political from Rajoy and Berlusconi?) and US sequestration (spending cuts) rejoin the party?

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

• China               Non-Manufacturing PMI                     Improved
• Japan               Monetary Base                                   Worse
• UK                    Lloyds Business Barometer                 Deteriorated
• Aussie              Building Approvals                              Worse
• See Live Macro calendar for all details

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

• Salamander Energy says 6,000 bopd oil at Indonesia well
• UK’s 3i says Asia head, senior India exec to leave
• Randgold Resources FY profit rises 16 pct, ups dividend
• Nat Rothschild urged to return Bumi bonus shares
• Mwana Africa sees increase in Zimbabwe nickel resource
• Online gaming company 888 says year revenues rise 13 pct
• Emis Chief Executive Sean Riddell to retire
• Lonrho expects year loss of 3-5 mln stg
• Anglo American to report $225 mln platinum loss
• Enquest says 2012 daily production was 22,802 boepd
• BTG submits Varisolve application to the FDA
• M&C Saatchi sees 2012 profits in line
• Londonmetric Property says post-merger portfolio worth over 1 bln stg
• San Leon Energy sees commercial ops at Tarfaya
• Future says trading for the full year in line