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

UK 100 called to open +20pts, and more importantly above yesterday’s market-hour highs and after an overnight test of 6200, despite Japanese stocks lower following continued disappointment over the BoJ’s announced QE programme: open-ended but no real increase in monthly amounts, and delayed until next year.

The JPY continued its turnabout despite comments from the new PM Abe that the JPY’s excessive strength still needs correcting. This was helped by the central bank increasing its assessment of the flagging economy for the first time in almost 3 quarters (weak but showing signs of bottoming out) and with Exports already improving bases on earlier stimulus and weaker JPY.

Overnight, Australian inflation data took the wind from the Australian dollar (AUD) after it came in below expectations (although the yearly change still increased) and boosted scope for a rate cut by the RBA to boost the economy, although consensus remains divided. China’s Conference Board Leading Economic Index improved slightly in December, although at a slower rate than November.

US markets closed higher, despite mixed numbers from Google (revenues beat, profits missed) Q4 results and disappointing macro data (another poor Fed Manufacturing survey and Home Sales weaker), with White House accepting Republican’s debt ceiling bill (no change in ceiling, but ceiling not applicable until mid-May) which is expected to be approved today allowing the President to reach a budget agreement before debt ceiling is reached.

In Europe, ECB president Draghi last night suggested the worst of the Euro crisis (no comment on rates or LTRO) was now behind us (famous last words?) while his Threadneedle Street based counterpart King struck dovish tones saying BoE prepared to add more stimulus if needed, denting GBP. He also put emphasis on the government doing its bit for growth and, while acknowledging policy needs reviewing, questioned incoming governor Carney’s potential abandoning of the UK’s 2% inflation target.

In focus today will be the UK unemployment data which is seen pretty much unchanged from the prior month, with a rate of 7.8% and jobless claims at 4.8%, however, the consumer squeeze will continue as wages growth slows from 1.8% YoY to 1.6%, still well below inflation. BoE minutes from the latest MPC meeting will let us know if there has been a change in voting on more QE.

Thereafter it’ll be all eyes on UK PM Cameron and his UK-in/out-the-EU hokey-cokey speech (time not specified which could well be a tee-up for a referendum if he wins the 2015 election, with a vote possible in 2017. Keep an eye on the reaction by UK equities and GBP.

The UK 100 futures have tried above 6200 and what will be of interest in early trading is whether the break above 6190 resistance now becomes a new support level The grind higher continues and at this rate, major resistance at 6400 doesn’t exactly look out of reach – we’ve gained 200pts since already in 2013.

In FX, GBP/USD down near 1.58 with dovish comments from BoE keeping it under pressure, as well as hopes on US fiscal situation resolution helping USD. Resistance at 1.59? EUR/USD still in that very tight range of 1.325 and 1.34 as both sides of pair benefit from improved sentiment. Pause before renewed uptrend, or reversal after rise? GBP/EUR bounced off 1.185 but still under pressure, not helped by BoE comments. As highlight yesterday, March lows very close at 1.175. Support?

In Commodities, Gold keeps trying higher, but unable to decisively break $1695. Not helped by EUR/USD being range-bound. In Oil, US Light Crude broken back above recent $96.5 highs. Brent Crude also back near recent highs of $112.5.

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

• Aussie              Consumer Price Inflation                    Worse
• China               Conf Board Leading Econ Index          Improved
• See Live Macro calendar for all details

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

• Wynnstay 2012 profit up 13 percent
• Britvic revenue up, steps-up Fruit Shoot roll-out abroad
• Land Securities-RSA lets four floors in Walkie Talkie
• Hochschild Mining FY production beats target
• WH Smith says margins helping profit as sales fall
• Findel says on track with turnaround plan, sales improve
• Sage Q1 trading in line with expectations
• Enquest buys minority stake in Alba field for 19 mln stg
• Big Yellow places 10 million new ordinary shares
• Rockhopper says exploration director stepping down
• Flybe says guidance for current year unchanged
• Finsbury Food H1 revenue edges up to 103.3 mln stg
• Unilever full-year sales growth beats estimates
• Close Brothers sees good result in H1
• 32Red FY revenues up 28 percent to 32.1 mln stg
• Severfield-Rowen CEO steps down as contract costs overrun