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

UK 100 called to open -10pts, with Asian bourses lower across the board, with risk appetite dented by big losses in China as financials suffer from tighter regulations on wealth-management products, and rising concerns in the Eurozone (Cyprus, macro data).

Cypriot banks re-open today with strict capital controls apparently in place for a week to avoid a flight of capital from the island, but guidelines suggesting longer with withdrawal/transfer limits per month/quarter. We also still don’t know the level of haircut on uninsured deposits (those >€100K).

Italy’s back to the fire with no improvement in the election deadlock as Bersani fails to attract Grillo/Berlusconi, and so we move closer to fresh elections in June, and the country’s recent debt auction classed as ‘poor’ creating fears of contagion from Cyprus.

Uncertainty still high in the Eurozone given the political insistence that Cyprus is a unique case, but investors taking this with a rather big handful of salt given how the crisis has panned out over the years. “Cyprus is not like X, Y and/or Z”.

Hong Kong and Australia also lower ahead of the long weekend, while in Japan new BoJ governor Kuroda disappointed, despite maintaining a bold monetary easing stance, by failing to provide the specifics the markets desires (such as from the Fed). The JPY strengthened as a result, denting exporter equities on the Nikkei.

Macro data from Japan also cast doubt over the economic recovery with a poor reading for Retail Sales, sapping confidence, however Chinese Industrial Profits showed a strong jump in Year-to-date growth. Other data included slightly better UK GFK Consumer Confidence, however, UK Housing data was a touch soft. German Retail Sales were better.

US markets still managed to close around breakeven, remaining on or around highs helped by status quo Fed statements. Ratings agency Eagan Jones cut the UK’s rating to AA- from A+, this after Moody’s and as we await news from the other majors Fitch & S&P.

In focus today will be the German Unemployment (seen flat), the UK’s Index of Services (big part of GDP) which consensus sees rebounding in January. In the afternoon, US GDP likely to be the main event, with improvements expected for the headline but stability for the core, while US Jobless Claims seen remaining down around its new 340K average.

UK 100 remains in its 6360-6470 range while uncertainty prevails in the Eurozone. Over the longer term, the 3-month graph maintains upward bias, with support at 6350, however, resistance still likely around Monday’s highs of 6480 and falling highs of last ten days a statement in itself that risk appetite under pressure. Uptrend to remain or break to downside?

Gold still hovering around $1600 with recovery from recent near 1550 lows, but falling highs from October meaning overall downtrend. US light Crude just keeps barrelling higher, with a near touch of $97 overnight, likely helped by US macro data optimism. Brent Crude also keeps is recovery with a regain of $110 almost negating the sell-off from the beginning of last week.

In FX, GBP/USD managed to recover to 1.515 overnight, but remains in 1-week downtrend as Greenback favoured over Sterling, with safe-haven status of the former adding to fiscal woes of the latter (see rating downgrade last night). EUR/USD still under real pressure on account of Eurozone woes, with new lows becoming almost a daily occurrence and the pair trading with a 1.27 handle since late yesterday.

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

• UK                    GFK Consumer Confidence     Better
• China               Industrial Profits                     Improved
• UK                    Nationwide Housing                Soft
• German           Retail Sales                             Mixed

See Live Macro calendar for all details

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

• Electrocomponents sees flat sales growth for full-year ending March 2013
• Qinetiq reconfirms guidance despite tough US
• SSE says on course to deliver solid results in May
• Fastjet expects to report $31 mln operating loss
• National Grid sees earnings ‘modestly’ ahead of guidance
• Alent full-year adjusted pretax profit rises
• IHG to sell central London hotel for 301.5 mln stg
• New World Oil & Gas says placing raises 6.3 mln stg
• Johnson Matthey completes 107 mln stg acquisition of Formax
• Petropavlovsk posts 2012 net loss of $244 mln
• Tate and Lyle performing in line with expectations
• Shell faces new probe over Alaska drill program