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

  UK 100 called to open -10pts, with Asian bourses higher taking the strong lead from US equities which saw the S&P 500 make another all-time high helped by hawkish FOMC minutes suggesting a potential tapering/end of Fed stimulus from mid-year/end-13 on account of better US economic/labour situation (although last feeble Friday’s Non-Farm payrolls may negate this).

Gold saw a big slump back towards recent multi-month lows dented from three directions; 1) the resulting stronger USD from QE tapering comments; 2), news that Cyprus is to sell €400m of Gold holdings to help with its bailout (like depositor bail-ins, fears rose other troubled Eurozone nations, with a lot more gold reserves, might have to do the same; 3) Goldman Sachs bearish note on the yellow metal, with downward revisions to 2013 and 20141 price targets.

Asian markets reacted positively to FOMC comments and US equity advances, and Japan’s Nikkei remains the regional leader as the JPY hits new 4yr lows against the USD on news the BoJ will sell long term bonds tomorrow. In China, lending and money supply data beat expectations implying growth (inflation stoking?). Australia higher despite a jump in unemployment and lower than expected inflation expectations.

US markets unperturbed by Moody’s comments that Portugal might need to tap the bank recapitalisation fund for a second time, possibly helped by the IMF’s Lagarde saying global economy no longer looking dangerous, with signs of improvement, but growth not likely mush higher than 2012. Korean situation remains very high stakes poker.

Overnight macro data saw Japan inflation remaining stubbornly low, while Machine Tool Orders were mixed. In Germany this morning, consumer inflation (CPI) in-line with expectations, but at 1.4% remains well below the ECB’s 2.0% target highlighting the impact of the region’s austerity.

In focus today will likely be the US jobs data (although weekly claims likely not as strong a message as last week’s Non-Farms). The ECB monthly reports also likely of interest based on Draghi recent comments of downside risks to economic recovery this year and desire for any clues on a rate cut which could dent the EUR.

The UK 100 cleared Cyprus lows of 6340 as upward momentum continued, but resistance found at 6400 which could represent need for a pause after rebound from 3-month lows of 6215. Potential for return to 6500 recent highs with risk appetite helped by prospect of less QE meaning US growth on the horizon and the current easy money addiction waning.

Gold decline slowed up at $1560, before recent multi-month lows of $1540. Falling trend from October still in place, with acceleration from February. Downside still possible to $1520, should risk appetite rise sharply. Resistance also likely around $1590 recent highs.

In Oil, Brent Crude has overtaken the US Light Crude (aka West Texas Intermediate – WTI) as the global benchmark spurred by the US shale boom.  US light Crude in 5-day uptrend at $94.5 despite USD strengthening. Brent Crude also in uptrend at $105.5 but not making as much ground as US light Crude.

In FX, GBP/USD still in uptrend from mid-March trading around April highs of 1.53 as USD moves on QE expectations. Support still possible at 1.52, with shallow uptrend from, mid-March. EUR/USD exceeded 1.31 March highs briefly yesterday, but fallen back overnight. Uptrend holds but gains may have slowed.

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

• Japan               Domestic Corp Goods Inflation           Worse; lower than expected
• Japan               Machine Tool Orders                          Mixed; Monthly vs Annual
• Aussie              Consumer Inflation Expectations        Slower than last month
• Aussie              Employment Change                         In-line with expectations
• Aussie              Unemployment Rate                           Higher; worse than expected
• Germany         Consumer Price Inflation                    In-line with expectations
• See Live Macro calendar for all details

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

• Kazakhmys sees $7 bln investment in Kazakhstan in 5 – 7 yrs
• Salamander Energy Suspends NK1 Well as Potential Gas Discovery
• Mothercare 4Q Encouraging – Numis
• Nighthawk Energy Hits New Oil Production Record in March
• Ashmore says net inflows top $7.3 bln in first quarter
• WH Smith Plc half year pretax profit up 5pc
• Marks & Spencer clothing sales fall again