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

UK 100 called to open -5pts, with equities in Asia in decline, notably in Japan following the Yen’s (JPY) reaction to ‘panic’ comments from the Economy minister yesterday abut the currency’s excessive weakness which saw the currency turnaround, having a negative impact on the exporters who have been benefiting of late. Sentiment in futures also dented by World Bank cutting global 2013 growth forecasts (2.4% v 3.0%) on fragility of economic conditions and potential for further disappointment.

Chinese equities also weak after overnight data showed a disappointing the reading for Foreign Direct Investment (FDI) where annual contraction of 4.5% in December was weaker than the 2% consensus expectation (although up from November) suggesting outsiders not quite as optimistic about the #2 world economy. There may also be concerns of Chinese GDP at the end of the week. Japanese pre-midnight data on the whole strong (machine orders, corporate inflation) adding to the Yen’s turnabout, however, Consumer confidence retreated against expectations of a gain.

In the US, markets closed mixed, held back by Apple-effect (shares <$500 after fears over drop in demand) and concerns over continued disagreement on raising US debt ceiling (needs to be raised or spending cut). Sentiment also hit by German GDP coming in weaker than expected (confirming Q4 contraction), mixed US macro data and comments from both Bernanke (the night before on economic fragility) and Eurogroup head Juncker that EUR too strong which saw USD strengthen.

In focus today, Eurozone Consumer Price Inflation is seen flat on an annual basis, higher month on month and a touch higher for Core annual. Germany’s figures were in-line yesterday, so no surprise expected. In the US, consensus expects consumer inflation data is to produce a similar make-up of readings. Later in the afternoon, US industrial and Manufacturing Production growth are seen falling back sharply. Capacity use is seen rising however.

Aside macro data, today’s the big one for results season with more of the big banks updating on Q4. Bank of New York Mellon kicks things off at 11.30am, with JPMorgan Chase and Goldman Sachs following up at half-hour intervals. After the poor reception to peer Wells Fargo last week, focus may be more on net interest margin where the latter disappointed just as much as the headline EPS and revenues.

Having heard little from Europe of late, there is an interesting interview article in the FT with Spanish PM Mariano Rajoy where he stood his ground on opposing the request of a bailout, not ruling it out but saying not necessary thanks to ECB backstop (muchos gracias Señor Draghi) and ongoing reforms work.

The UK 100 remains under pressure having come back from the highs of 6140 although the 6100 zone served as support yesterday. We are back there again after falling from 6130 overnight. Falling highs suggests equities struggling to get higher. Index sitting in mid ground with a correction still possible back to 6050, but a return to 6140 highs not to be ruled out.

In FX, GBP/USD back down at 6-rising support at 1.60 after the USD strengthened on Juncker comments which dented the EUR. In EUR/USD, The aforementioned comments saw the pair turn back from highs of 1.34 to retest the recent breakout level of 1.33. Support? GBP/EUR found support at 1.20 after breakdown, and recovered to broken support trendline at 1.21 after EUR weakened on Juncker comments.

In Commodities, Gold keeps trying to break through $1685 although the stronger USD (see above) may be a hindrance. If a break materialises, upside potential to $1695 Jan 3 highs Support at $1675. After break higher. In Oil, US Light Crude under pressure at $93.5 on stronger USD although trend of rising lows still in place from early January. Brent Crude broken back above $111 having tested $109.5 January lows again overnight.

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

• Aussie              New vehicle sales                               Improved
• China               Actual Foreign Direct Investment       Worse
• Japan               Consumer Confidence                                    Worse
• Europe             EU New Car Registrations                  Worsened
• See Live Macro calendar for all details

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

• Jupiter says assets hit 26.3 bln stg
• UK housebuilder Barratt says H1 pretax profit doubles
• RPS to expand energy training business
• Antrim Energy says production interrupted in UK North Sea
• Rolls Royce wins $75M China contract
• N Brown says sales momentum building
• French Connection sees full-year pretax loss of 7.5 mln stg to 8 mln stg
• Experian sees high single-digit growth
• Britvic, A.G. Barr say OFT sets Feb. 13 merger decision date
• Fenner says trading in line with management expectations
• J D Wetherspoon sales up in second quarter
• Diploma Plc says first qtr revenue rises
• G4S wins meter reading deal with British Gas
• Rolls Royce wins Saudi Arabia engine support contract
• Faroe Petroleum awarded licences in Norway
• Thorntons’s total sales up 5.4 pct in Q2
• Meggitt wins Snecma engine sensors deal