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

  UK 100 called to open +20pts at 6185, helped by solid gains in US and Asia, although China the underperformer, despite a rebound on solid macro data and appeased cash-crisis concerns (lower rates as PBOC again suspends liquidity withdrawal operations to help out) but ratings agency Fitch joined peers in cutting its China growth forecast.

 Global sentiment assisted by more assurance from central bank officials (Fed, ECB, BoE) that policy will to stay accommodative, with even the BIS (central bankers bank) backtracking on last weekend’s report – it still says stop stimulus as soon as possible, but not just yet.

 Add to that a big downward revision to US GDP and QE3 taper fears pushed back out relieving markets still addicted to easy money, although how much importance the Fed puts on growth vs. employment is uncertain.

 Australia jubilant after Kevin Rudd sworn back in as PM after ousting Julia Gillard in a leadership vote (Miners optimistic of tax concession), and Eurozone hopes revived by another all-nighter by Finance Ministers who are reported to have reached a deal on how to share the cost of bank collapses in the region.

 Overnight macro data saw a Chinese Industrial Profits year-to-date reading solid in May, while weakness in Australian Job Vacancies improved and Japan’s All industry Activity Index  rebounded in-line with expectations although note German Import Prices weaker than expected (less inflation) which may add to pressure on EUR and, with existing USD strength, thus EUR/USD.

 In focus today, in a busy calendar keep watch for German Unemployment, UK GDP, Eurozone confidences readings, US Jobless Claims and US Pending Home Sales. After the US data of the last two days (good on Tuesday, bad yesterday) markets taking it in their stride. Are we back to all data being good; bad being good for no tapering of QE3 and good justifying Bernanke’s optimism?

 UK 100 rebounded to the 6200 level where it has remained overnight. Good news we got there, not so good that unable to break above. That’s not to say it won’t happen, but as much as round number 6000 served as support, 6200 could serve as resistance/pause after 3.3% rally. I still want to see a break of 6200, maybe even 6250 to be sure, in order to negate some of the more bearish looking candles on the longer term graphs.

 In FX, GBP/USD found support 1.53 overnight although still in downtrend from 1.575 mid-June 4-month highs. Dovish BoE speakers and mix of US data confounding things. EUR/USD also found support at 1.30 and still in downtrend from recent 1.34 highs. Draghi accommodative competing with mixed US data. USD/JPY trading around 98, supported by US uncertainty (taper on or off and JPY safehaven seeking. Support 97. As with yesterday, watch for break of 98.5 again.

 Gold below $1250 (Aug 2010 levels) on continued lack of interest. Pause at $1300 looking like half-way house for fall from $1400, meaning $1150 could be destination. Drivers: USD strength and liquidation of holdings (ETFs) on lack of need for hedge/safehaven, but beware increased short speculation which could lead to a short squeeze.

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

• China               Industrial Profits Growth        Stable
• Aussie              Job Vacancies                          Weakness improved
• Japan               All Industry  Activity Index      In-line, rebound
• Germany                     Import Prices                          Worse

See Live Macro calendar for all details

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

• Playtech confident on meeting FY targets
• Greene King profit rises, says strong start to new year
• Stobart says transport and distribution business in line with forecast
• Sirius Minerals signs offtake deal with China’s TCT
• DS Smith says current year has started well and in line with co’s expectations
• Betfair sees faster revenue growth in UK market
• Debenhams’ sales growth slows
• Mubadala awards Costain 130 mln stg hotel contract in Abu Dhabi
• Perform sees investment impacting profit growth
• Costain says on track to meet full-year expectations
• Pinewood Shepperton profits rise on film industry demand
• Wood Group says confident of hitting profit forecast