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

  UK 100 called to open +10pts, after another roller-coaster session in Japan with a positive start undone by a renewed bout of volatility, with a 1000pt swing from highs as the JPY strengthened amid safehaven seeking (USD/JPY sub-102), before a recovery to positive after the BoJ’s Kuroda said he wants to avoid volatility in Japanese markets, notably bonds.

 The US managed a near breakeven close (helped by solid jobless and housing data) although this served to further fuel the debate about QE3 tapering. US performance in contrast to 2% declines in major European bourses which were in spite of some lightly better PMI Manufacturing and Services and confirmation of positive UK Q1 GDP.

 Japan aside, Australia the stand-out performer, unfortunately in the red, with fallout from the poor China Manufacturing (more out overnight, see below) maintaining doubts on growth and still weighing on sentiment. Hong Kong and Shanghai are in the green.

 Overnight, Draghi speaking in London highlighted Europe needs a more European UK just as much as the UK needs a more British Europe, while reiterating that the single currency is stable and unfounded fears of a collapse have been removed.

 More bad news from the China with a decline in Flash business sentiment in the wee hours. This morning, German Q1 GDP data kicked off the macro slate with a confirmation of barely positive growth along with a slight improvement in German GFK consumer Confidence.

 In focus today, we have German IFO Surveys which are seen largely unchanged in May, and US Durable Goods Orders seen rebounding.

 The UK 100 back around the 6700 level, having found support and bounced from late last week’s consolidation lows. No real progress above 6720 overnight. Looking at 3-month graph, any further weakness could find rising support at 6600.

 In FX, GBP/USD bounced from near 2-month lows of 1.5 on prospect of QE3 tapering. Resistance possible at 1.52. EUR/USD rebounded to near yesterday’s high of 1.295 helped by slightly better PMIs. USD/JPY still below 102. AUD found support at June 2012 lows of 0.9585. Still watching price and RSI for potential rebound call – valid for last 3 yrs.

 Gold rebounded to near $1400 on some USD weakness, but still struggling to do much better on benign inflation meaning less need for hedge, limited safehaven seeking.

 US light Crude bounced strongly from lows of $92.5 (after highs of $97.5) but stopped short at $94.5 despite USD weakening, with growth concerns dominating. Same story in Brent Crude, with a bounce from $101 (after highs of $105).

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

• China               MNI Flash Sentiment              Deteriorated
• Germany                     GDP (Q1 final)                         In-line
• Germany                     GFK Consumer Confidence     Better, improved

See Live Macro calendar for all details

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

• Close Brothers says well placed for the year
• Croda buys Arizona Chemical’s specialty products business
• H&T says results may be hit by volatile gold price
• Computacenter to return 75 mln stg to shareholders
• Premier African Minerals to sell Togo and Mali projects
• Petroceltic gives update on Bulgaria well
• Smiths Group maintains full-year outlook