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

  UK 100 called to open +15pts at 6386, not far off yesterday’s mid-pm highs, after a mixed session in Asia as markets await with wording of the Fed’s FOMC statement and Chairman Bernanke’s speech this evening for an update on the QE3 programme and whether we should be expecting any tapering of the current pace of intervention soon.

 Japan’s Nikkei the outperformer overnight thanks to a weaker JPY (back above 95; a product of stronger USD) and BoJ Governor Kuroda expecting Japans market to stabilise as the economy improves, signs of which from trade balance data (exports stronger; weaker JPY helping) and Nationwide Department Store Sales rebound. PM Abe also went as far as to say G8 leaders liked his Abe-nomics.

 China suffering on reports dampening any expectations of policy easing and Australia’s ASX positive on improved sentiment indices, although Hong Kong being held back by weakness in China. Cyprus asking for renegotiation of bailout deal (too onerous, banking sector destroyed).

 In focus today, will be on the Fed’s update which has potential to swing already uncertain markets on any news/no news about tapering, although note the equity progress yesterday suggesting less concerns (US housing data light, inflation still benign), with Europe closing largely positive and US bourses gaining ground (S&P500 now just 2% from May record highs).

 Maybe markets slowly coming round to accepting tapering will occur at some point (likely a few months away), but convinced now that no rate rises anytime soon and tapering can always be reversed? To be honest, a tapering of taper talk would be nice.

 The UK’s Parliamentary Commission report on the Banking sector will garner much attention with it hitting out at a toxic culture, government interference (RBS), lack of accountability by those in positions of authority and calls for criminal/financial sanctions.

 UK 100 testing yesterday’s highs just shy of 6400. Still no test/break above highs of early last week and late the prior week. Trend of rising lows intact. Support 6350. Whatever, with the market focused on little else it is the Fed update which will be the architect of wither a breakout of break-down.

 In FX, GBP/USD bounced from yesterday’s lows (less worried about tapering, or not expecting it) to regain 1.565. Still turned down from recent 4-month highs, so could just be slight recovery before resumption of strengthening, something that Bernanke could orchestrate is he announces tapering sooner than expected.  EUR/USD still strong testing 1.34 overnight. USD/JPY also rebounded from lows of 94, to regain 95 overnight.

 Gold still suffering from stronger USD vs GBP and JPY, and trading near lows of 22 May ($1360), when equities collapsed.

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

• Japan               Trade balance                         Better
• Aussie              Conf Board leading index       Improved
• Aussie              Westpac Leading Index           Improved
• Japan               Nationwide Dept Store Sales  Improved

See Live Macro calendar for all details

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

• Berkeley Group year profit rises 26 pct
• Pennant Int’l sees 2013 results ahead of view
• JD Sports Fashion says trading in line
• Spirit Pub keeps full-year guidance unchanged
• Derwent London to sell stake in Grosvenor Place
• Micro Focus sales fall in line with guidance
• Darty year profit slumps
• AstraZeneca, Bristol diabetes drug fails to show heart benefit
• Imagination Tech’s profit dips on licensing slowdown
• Housebuilder Berkeley’s profit rises 26 pct