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

UK 100 called to open +16pts at 6657 as markets globally pause for breath. In the US overnight, equity markets finished mixed,  while core government bonds have continued their decline. The Dow Jones closed down 30 points at 15,963 whilst the S&P was down 0.5 points at 1,819 (ending the S&P’s biggest four-day jump in a year).

In Asia, stocks dropped after the regional benchmark index climbed for a sixth day yesterday to cap its longest run of advances this year, as well as taking a lead from muted US markets. The Nikkei was down 265 points at 14,534 whilst the Hang Seng was off 115 points at 22,170.

In focus today following softer than expected Aussie unemployment data, we have US Retail Sales at 13:30pm expected to come in flat having been affected by the cold weather spell. Fed Chief Yellen is testifying once again in front of the Senate Banking Committee at 15:30. When she commented on Tuesday with dovish tones echoing her predecessor with QE continuing this helped spark a rally in all US indices.

With the UK 100 finding 6700 hard to break through yesterday due to a lack of macro, with Retail Sales and Yellen speaking this could give the markets a jolt in either direction today. Right in the middle of the range 6600 and 6700 again will prove to be crucial levels for support and resistance. Having seen Asian market give up gains with profit taking and a stronger Yen will the UK Index follow suit?

In commodities, gold continued to hold gains trading as high as $1293, having seen a rally of over 6% this year, though $1300 still proves to be a stumbling block. Silver is also on course for its longest run of advances since 2008. WTI slid from four-month highs amid speculation this rally was excessive, down as much as 1% and now trading at $99.50. Note bearish comments from Goldman Sachs and Citigroup who think this year’s rebound in commodities may be short lived and are heading for losses in 2014.

Results today: Rolls Royce (RR.L) exceeds expectations with a 23% rise in FY profits but forecasts 2014 profits to be flat in 2014 due to declining defence and marine revenues. Rio Tinto (RIO.L) reports a 10% rise in underlying profit exceeding expectations and is focusing on debt reduction to sustain a strong balance sheet in 2014. Lloyds Banking Group (LLOY.L) posts a statutory profit of £415m vs. a loss of £606m last year which is its first profit since the government bailout. AMEC (AMEC.L) FY core profit for 2013 was £343m above analysts’ forecasts of £340m but missed on revenue at £4.0bn vs £4.1bn expected. Shire (SHP.L) to report later this morning.

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

• Aussie      Consumer Inflation                         IN-LINE
• UK            RICS House Price Balance              WORSE
• Aussie      Unemployment Rate                      BETTER
• Japan       Tokyon Condominium Sales           IN-LINE

See Live Macro calendar for all details

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

• Rio Tinto says FY underlying profit US$ 10.2 bln, up 10 pct
• Hornby appoints Ames as chief executive
• Rolls Royce profits rise, sees flat 2014
• Plexus wins 1.5 mln stg contract with GDF Suez
• Clarksons Chairman Philip Green to step down
• GeoPark to cease trading on AIM on Feb 19
• Homeserve says FCA mis-selling probe closes with 30.6 mln stg fine
• Lloyds returns to profit, hands out $655 mln in bonuses
• Lancashire full-year pretax profit at 218.1 mln stg
• Entertainment One sees FY earnings ahead of its expectations
• Hogg Robinson expects full-year results to meet market forecasts
• Amec posts full-year core profits in line with consensus
• Tate & Lyle forms new alliance with McNeil Nutritionals
• Imperial Tobacco says first quarter result keeps it on track
• Miner NWR posts big Q4 loss on impairment charges, cuts reserves
• Tate & Lyle scales back outlook, hurt by developed market weakness
• Foster Wheeler enters definitive agreement with AMEC
• Amec JV awarded Shell contract extension