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

  UK 100 called to open flat, despite Asian bourses posting a rebound on more positive Japanese data, with Europe looking set to follow the US close with another muted open, still struggling to get and stay above the now key 6700 level after disappointing US data.

US markets closed lower on poor macro data (jobs, housing, manufacturing, inflation) denting growth sentiment and mixed comments on stimulus doing the same.

The Fed’ Williams (non-FOMC voter) promoted MBS rather than Treasury bond buying and suggested the risk prop of QE3 could be reduced in the summer and stopped by end-13. Raskins said too early to assess impact of QE3, with signs of progress but a way to go before we can say healthy.

WSJ reporter Hilsenrath said despite decline in US inflation alarm bells are not ringing among FOMC officials suggesting Fed might not increase asset purchases either. The EU’s Bank Stress Tests have been delayed until 2014 allowing ECB asset-quality review.

Japan’s Nikkei outperforming thanks to strong rebound in Machine Orders and solid Home Loans growth which, on the back of yesterday’s better GDP report, reinforces the argument that Abe’s intervention is paying off.

Australia slightly higher helped by continued weakness in AUD vs USD which has kept pressure on Gold, down for a 7^th straight session, hindered by ETF selling.

China helped by rebound in Conference Board Leading Economic Index talk of reforms to boost the economy, shunning stimulus for fears of worsening the property bubble and excessive government debt situation.  Report out that China’s private consumption to slow this year. Hong Kong and South Korea close for public holidays.

In focus today will be the Eurozone Construction data which is likely to have remained muted if not negative in March, hampered by bad weather and austerity.

In the afternoon, US eyed again with University of Michigan’s Consumer Confidence report seen improving in May, adding to debate on Fed tapering asset purchases. Beware again, plenty of central banker speeches on the roster.

The UK 100 failed again around 6710 and pared back to rising support from 7 May at 6675. Our sideways move rather than retracement correction looks to have been in place for 3 days. Can this continue before resumption of longer-term uptrend or could more poor macro data/end of QE3 talk start a correction?

 In FX, GBP/USD off its best levels as talk of QE3 tapering outweighed the up-move following poor US macro data which had weakened the USD on more stimulus hopes. Support at 1.52. EUR/USD back down at recent lows of 1.285 on USD strength. USD/JPY holding above 102. AUD still trading multi-month lows.

 Gold still pressured by stronger USD on ETF selling and QE3 tapering talk. Still potential for downside to April crash lows, with drivers: stronger USD on prospect of Fed tapering, benign inflation negating need for hedge, equity rally and backstops reducing safehaven demand and retail investor fears of holding a declining asset.

Oils maintained rebound despite global growth fears, a stronger USD, and US Shale competition.

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

• Japan               Housing Loans                         Solid growth
• Japan               Machine Orders                      Much better
• China               Conf Board Leading Index      Improved
• See Live Macro calendar for all details

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

• Premier Farnell sales rise, expectations unchanged
• Nat Express wins Essex Thameslink rail extension deal
• Vesuvius trading in line, sees market improvement
• Pendragon says trading in line with expectations
• Headlam says trading recovered in March and April
• Intertek margin curbed by weak minerals business
• Lamprell performance year to date in line with expectations
• Brammer says trading in line
• Morrisons seals deal with Ocado for online service
• John Menzies says January-April distribution trading is behind last year