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

UK 100 called to open -15pts, with Asian equities showing some weakness, after negative lead provided by Europe and US following worse than expected and negative US Q4 GDP data (although underlying US growth appeared better once reversal in business inventories and drop in federal spending were stripped out) and a less bullish Fed statement.

The Fed’s FOMC statement saw rates and QE left unchanged but a highlighting of a “pause in growth” representing a pull-back in language used from prior optimism. This helped maintain the check on the market’s recent rally despite it ultimately meaning a continued and exceptionally accommodative monetary stance designed to support risk assets.

Note Japan’s Nikkei again bucking the trend with accommodative rhetoric from the BoJ that it is prepared to go further on easing and despite mixed macro data prints with Industrial Production rebounding in December, but less than expected and staying weak over the year, Vehicle Production contraction worsening, and Housing Starts failing to accelerate as hoped, however, Construction Orders did rebound.

Other data comprises better than expected UK House Prices and GFK Consumer Confidence but a collapse in German Retail Sales which may spook those focusing on the recent better relative data from Germany versus Eurozone peers.

Ratings agency S&P has put focus back on China by suggesting that it is spending too much, making it vulnerable to a collapse from over-investment. Results from Europe this morning also look disappointing with Santander and Deutsche Bank missing as well as Shell. On the flipside, BSkyB beat expectations.

In focus today will be the fact it is month-end which may accentuate market weakness as some take profits and crystalise early year gains. Data-wise, look out for German Unemployment which, although not seen much changed, could impact sentiment if it is wildly different. Eurozone Consumer Inflation (CPI) also seen unchanged, but if higher could increase calls for another rate cut to help with regional growth.

In the afternoon, US jobless claims seen normalising back towards recent 360K average, while Personal Income and Spending are seen accelerating and slowing, receptively, suggesting households saving. We also have results from global shipping giant and economic barometer UPS as well as Industrial Dow Chemical.

UK 100 futures back down near recent 6300 which may act as support, but the fallback from highs of 6350 cannot really be classes as a correction. Rising lows since Monday could help limit downside.

In FX, GBP/USD maintains bounce from around 1.57 and regaining key 1.58 level as poor US GDP and Fed statement suggest need for continued USD printing, weakening the currency relative to Sterling. EUR/USD tried almost as high as 1.36 with recent Euro optimism helped along by USD weakness. GBP/EUR still under pressure sub-1.17. As repeated, still potential for further falls to 4-year rising lows at 1.14, and recent breakdown level of 1.177 now becoming resistance.

In Commodities, Gold bounce found resistance $1685 helped by USD weakness. In Oil, US Light Crude found a hurdle at $98.6 despite weaker USD, as global growth questioned, but remains in an up-trend. Support in place at $97.8 for any pullback. Brent Crude remains in strong uptrend but resistance at $114.2.

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

• UK                    GFK Consumer Confidence                 Better than consensus
• Aussie              Private Sector Credit                          Better than consensus
• Japan               Vehicle Production                              Deteriorated
• Japan               Housing Starts                                     Worse than consensus
• Japan               Construction Orders                           Improved
• UK                    Nationwide House Prices                    Better than consensus
• Germany         Retail Sales                                         Worse than consensus
• See Live Macro calendar for all details

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

• BTG sees FY revenues at top end of guidance
• Enterprise Inns sales fall, eyes H2 improvement
• Cranswick posts revenue rise
• Lamprell says year guidance unchanged, lender talks continue
• Mitchells and Butlers sales fall as cold weather bites
• ITE Group acquires Malaysia’s Trade Link for 4 mln stg
• Paragon trading in line with internal expectations
• N Brown names Angela Spindler as CEO
• Deutsche Bank Q4 tarnished by restructuring, impairment charges
• Investec says H1 total operating income up 1 percent
• Vedanta’s core earnings jump on oil and gas boost
• Brewin Dolphin funds up to 26 bln stg in Q1
• 3i says on track to cut debt below 1 bln pounds
• Great Portland Estates sees rents growing across London portfolio
• Babcock says confident of meeting full-year expectations
• Kazakhmys copper cathode production falls
• FirstGroup gets UK rail franchise extensions
• Lonmin says Q1 output ahead of its targets
• Shell jacks up dividend and chases growth