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

UK 100 called to open flat after making a new multi-year high around-the-close thanks to continued and rising confidence in the global macro outlook. Asian markets higher and Japan’s Nikkei the standout performer thanks to weak Retail Sales data increasing the rationale for more policy easing intervention by the BoJ. Hong Kong hit a 21-month high and Australia closed up for the 10th session in a row.

US markets closed higher thanks to money continuing to move out of safe-havens and into risk (equities, commodities) helped by a plunge in US Consumer Confidence to Nov 2011 levels being offset by US housing data remaining strong, suggesting continued recovery in the key sector.

On the Q4 results front, there were beats across the board from major names including Pfizer, Tyco and Ford and while Amazon suggested end-of-year shopping season fell short of expectations, profitability in North America rose which helped shares after hours.

In Europe, keep an eye on the banks after talk that the European Tobin financial transaction tax may could raise €35bn after a revised and strengthened draft plan from Brussels which seeks out to clamp down on avoidance by being applicable to any transaction which involves a financial institution with headquarters in the tax area or trading on behalf of a client base din the area.

On a more optimistic note for the banks, there have been hints from Brussels that it may retreat from plans to ringfence all securities trading operations if it risks negatively impacting growth in the region at a time when the sector is deemed so key.

In focus today will be the Eurozone confidence figures which are seen improving slightly albeit at still depressed levels, while US ADP employment data be watched as a precursor for tomorrow’s Non-farm Payrolls reading. US preliminary Q4 GDP will be a key looked to for news of how much it and Personal Consumption slowed in Q4 from the solid print in Q3 after the Superstorm.

With global Central Banks playing such a pivotal role in maintaining markets’ bullish bias thanks to their accommodative stance, any news is key, however, rates/QE programme change is unlikely from the US Fed this evening after the expanded, open-ended and unemployment–linked announcement made in December.

UK 100 futures still grinding higher (sorry, I really am looking for another observational description) and taking trying just 50pts shy of where we deem the next level of major resistance to be – 6400; 14.3% from the mid-November lows. Still much talk of fatigue. Slower gains the early signs?

In FX, GBP/USD maintained its rebound from around 1.57 on continued optimism towards the world’s #1 economy. GDP and Fed announcements could be drivers today. After significant weakness in the GBP, maybe some support emerging for Sterling despite negative Q4 growth and need for more QE and potential for AAA rating loss.

EUR/USD tried again higher and above 1.35  (first time since end-2011) with sentiment towards the Eurozone continuing to rise especially after Greek benchmark borrowing costs fell below the significant 10% levels in more than 2 years. GBP/EUR still under pressure, but off worst levels. Still potential for further falls to 4-year rising lows at 1.14, and recent breakdown level of 1.177 now becoming resistance.

In Commodities, Gold bounce continues with $1670 now close and despite USD strength. In Oil, US Light Crude retains its uptrend trying again for yesterday’s 2-week highs of $97.8 on macro optimism and strong EUR/USD. Support in place at $97.0 for any pullback after break above yesterday. Brent Crude also made new highs overnight $114.5.

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

• Aussie              DEWR Skilled Vacancies                     Slower decline
• Swiss                UBS Consumption Indicator                Improved
• See Live Macro calendar for all details

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

• Trap Oil signs $20 mln borrowing facility
• Renishaw H1 pretax profit up 48 pct
• Afferro says Akonolinga exploration results positive
• Renew says trading in line with expectations
• John Menzies appoints Paula Bell finance director
• United Utilities says trading in line
• Vodafone seeks change in India airwave auction rules
• Phoenix Group to raise 250 mln stg for further growth
• Ferrexpo eyes potential senior note offering
• Gemfields says saw strong production at Kagem
• Safestore names Andy Jones as new CFO
• Ark Therapeutics puts itself up for sale
• Kenmare says revenue rises 40 pct in 2012
• Travis Perkins buys Solfex Energy Systems for initial 8 mln stg
• Imperial Tobacco says FD to retire
• F&C Asset Management ends 2012 with AUM of 95.2 bln stg
• Ricardo says Paula Bell to resign as FD
• Russia’s Polymetal says on track to meet 2013 output target
• Imperial Tobacco sees black market hitting H1 profit
• Johnson Matthey’s Q3 sales dip in tough markets
• Hornby sees FY underlying profits in line
• Highland Gold Mining 2012 production up 18 pct
• HSBC’s Oman unit see sharp drop in 2012 profit
• Antofagasta FY copper production beats target
• Mothercare’s Australian associate goes into administration
• Bovis Homes secures financing package