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

UK 100 called to open -5pts, following Asian bourses lower and after a largely breakeven finish for US equities, despite M&A news (Warren Buffet buying Heinz)and better US jobless claims, as caution returns in the run-up to G20 summit in Russia where the focus is expected to be on what is now being referred to (and dismissed) as ‘currency wars’ – attempts to devalue one’s currency to help exports and growth, rather than letting markets decide – and potentially the JPY in particular, as well as national debt situations. Some concerns over who next BOJ Governor might be – less dovish?

Weaker than expected Japanese and Eurozone Q4 GDP data also served to put optimism in check, negating the bullish sentiment on the single currency bloc of late, and reviving concerns over the recovery from the sovereign debt crisis and seeing S&P warning on potential downgrades for Spain, Italy, Portugal and France this year, adding to pressure on EUR versus peers.

Overnight data limited to Japanese Industrial Production which was worse than expected although December growth did register a rebound, and with stronger Capacity Utilisation. This morning we have had comments from German Bundesbank Jens Weidman saying the ECB won’t cut interest rates to weaken the Euro, just because the single currency is strong, which he sees as justified given the economic outlook.

In focus today will be UK Retail Sales which are seen rebounding in January after a disappointing Christmas month, a potential sign of better consumer confidence, but data still volatile.  Later in the morning, Eurozone banks will announce how much of the LTRO borrowings from ECB they are to pay back early next week. Consensus is for another €4bn, taking the total reimbursement to over 30% since end-Jan.

In the afternoon, the US Industrial Production growth is seen remaining tepid, and Manufacturing to fall back to stagnation. The Uni of Michigan Consumer Confidence closes the macro data week with expectations of a rise.

UK 100 sold off hard on Eurozone GDP data and rebound failed to break the trend of falling resistance from recent highs. This could cap short-term gains, but support at round number 6300 thanks to of optimism of investors taking recent data on board but preferring  to look forward and to the hoped for recovery. Resistance still likely at recent highs and then 6400. If 6300 is broken, downside possible to 6250/20.

In FX, GBP/USD now entrenched below long term rising trendline of support, with next support around 1.53. EUR/USD still in February downtrend with resistance at 1.345 and support at 1.33. GBP/EUR still weak, but found some support at 1.15 after poor Eurozone GDP figures.

In Commodities, Gold still in 6-month downtrend, down near 2013 lows of $1630 with potential support around $1620 from summer 2012 trading.  In Oil, US Light Crude trading around $97 while Brent Crude maintains its rising trend of 2-week lows at $118.

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

• Japan               Industrial Production                          Worse
• UK                    Anglo American Q4 Results                Better
• See Live Macro calendar for all details

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

• BG Group’s Fabio Barbosa steps down as CFO
• Johnson Matthey sees hit from loss of Anglo Platinum deal
• Anglo American earnings tumble; writedowns, costs bite
• Anglo American – 1.45 bln tonne ore reserve for Minas-Rio
• JKX Oil and Gas completes Ukraine purchase
• FDA approves Lombard Medical Tech’s Aorfix
• Darty warns on year profit as sales trends soften
• Innovation on track after solid start to year
• Severn Trent performing in line, outlook unchanged
• De Beers sees moderate growth in demand for 2013