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

  UK 100 called to open -30pts at 6300, after a weak session in the US and negative handover to Asia, as uncertainty grows regarding central banks and their recent reluctance to add stimulus (BoJ, ECB, BoE) or indeed potential to reduce it (Fed), with a think-tank report on the latter suggesting September. Greece downgraded by MSCI from developed to emerging market.

 US markets slid on reduced Fed QE3 fears and global sell-off in bonds and emerging markets assets (bonds + equities) which have been helped by stimulus of the last few years, but which may be less forthcoming/plentiful, sending yields and borrowing costs higher after being artificially depressed for so long.

 Japan’s Nikkei tested sub-13,000, as exporters hindered by stronger JPY (product of weaker USD vs. majors on QE3 tapering fears, JPY still a safehaven, and upbeat BoJ monthly economic assessment) but index since recovered after weak Domestic Corporate Goods Price Index came in weaker than expected in May and Machine Orders fell more than expected in April on revived hopes of further stimulus.

 Australia down a touch on the stronger AUD/USD (rebound to 0.95) after the Westpac Consumer Confidence index jumped well above 100, still at odds with other macro data of late and calls for further rate cuts, something which could hinge on upcoming labour data. Several Asian markets on holiday (China, Hong Kong, Taiwan).

 In focus today, we have the UK Unemployment which is seen unchanged and Eurozone Industrial Production flat in April. Fallout to continue from German Constitutional Court hearing on the ECB’s pledge to help eurozone and whether it overstepped the mark, and ECB members piping up like Fed counterparts with comments on OMT etc.

 UK 100 found some support at yesterday’s retest of the prior week’s lows. Still no real test of the falling trendline of resistance from May 21, meaning still potential for downside to April lows of 6215-6220 until a decisive upside breach is registered.

 In FX, GBP/USD now trading 4-month highs of 1.565 and testing old Feb support as the USD weakens on the prospect of QE3 being here to stay a little longer and after weak US bond auction yesterday. EUR/USD also trading 4-month highs (1.33) and Feb support helped by fears of more QE coupled with ECB inactivity. USD/JPY still volatile and still in downtrend from May highs. Rebound form 95 halted at 99, before retest of 96 overnight.

 Gold slowing losing momentum and finding resistance at $1380 overnight having breached the level yesterday morning. Still no help from weaker USD and potential downside to $1340 April and May lows.

 In the Oil world, US light Crude back below $95 overnight despite weaker USD, as global growth fears and supply threat from new sources (Shale etc) dominate. June uptrend support may have been broken at $95.5. Brent Crude also broken June uptrend, falling well back from $104 to trade below $102.5.

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

• Japan               Domestic Corp Goods Prices  Worse
• Japan               Machine Orders                      Mixed
• Aussie              Westpac Consumer Conf        Improved
• France             Non-Farm Payrolls                  In-line
• Germany        Consumer Price Inflation        In-line

See Live Macro calendar for all details

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

• Centrica seeks chairman after Carr’s BAE Systems move
• Antofagasta says performing in line with forecasts
• Sainsbury outshines Tesco with quarterly sales rise
• Berkeley Mineral Resources buys copper processing plant
• ASOS third quarter sales rise 45 pct
• Glencore appoints former Morgan Stanley boss Mack to board
• Xcite agrees Bentley field deal with AMEC