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

UK 100 called to open +10pts (ex-div -0.6pts), taking a positive lead from Asia and the US, with a strong start to the US earning season and Chinese overnight data buoying risk appetite. Note, however, continental bourses (CAC40, DAX30, MIB40, IBEX35) called to open even higher.

Asia in the green with Chinese trade data showing an unexpected trade deficit in March as exports grew less than expected (growth halving from February’s surge), but imports surprised to the upside with a much bigger than expected rebound from Feb’s plunge, signalling continued strong domestic consumption even if foreign demand is waning.

While yesterday’s benign inflation data from Beijing boosted risk appetite by lowering expectations of any monetary tightening, today’s strong import data may reverse some of this and the export data highlight the fragility of global demand, something demonstrated by weak German Import/Export growth yesterday and mixed US sales/stocks data.

Nonetheless, strong Chinese domestic demand given a boost to resources focused names in Australia, helping the AUD vs. USD, but a sharp fall in Aussie Consumer confidence did hit financials. Muted reaction by Chinese equities suggests some uncertainty from the aggregate of current data and caution ahead of data releases over the next week, and reaction to Fitch’s downgrade of the sovereign’s credit rating from A+ from AA-.

Korean concerns persist with the North warning any foreigners to leave the South. Japan’s Nikkei still benefiting from the BoJ’s exceptional intervention and subsequent JPY weakening as well as PM Abe’s statement that Abenomics will continue until the new 2% inflation target is hit.

In Europe, much talk about Slovenia’s banking sector and whether it can avoid a bailout and what structure any bailout would take (more bondholder and depositor bail-ins?) while Cyprus may run out of cash before its first bailout instalment, Italy’s political deadlock persists despite continued party discussions and the ECB maintains its stance that H2 of 2013 has more downside risks than a few months ago.

In focus today will likely be the fallout from the Chinese overnight data given the lack of major data points from Europe and the US, although US Q1 earnings likely to see increased focus with Alcoa starting reporting season well, and updates form JPMorgan and Wells Fargo to come on Friday.

The UK 100 ’s opening call suggests the recent rebound from 2-month lows may have lost some momentum with the 6340 level of support (Cyprus lows) given up on Friday potentially reverting to resistance. Some support from 3-day rising lows though.

Gold seen another revival and maintaining its bounce from 3-month lows of $1540 after poor US sales/inventory data maintained expectations of continued QE and USD weakening to help with growth (itself precarious) and thus sees demand for the safehaven. Downside still possible to $1520, should risk appetite rise sharply, but resistance also likely around $1600/$1615 March highs.

In Oils, US light Crude back off $94.5 4-day highs reached after USD weakened (see above). Same story for Brent Crude at $106 although it has not retreated as much.

In FX, GBP/USD trading back at 5-day highs of 1.53 as USD moves on QE expectations. Support still possible at 1.52, with shallow uptrend from, mid-March. EUR/USD moved to 1.31 9-day highs increasing the chances of a reversal of the 3-month uptrend

For any help you may require placing trades or in terms of market information, put a call in to our trading floor – all part of the service.

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

• Japan               Bank Lending                                      Improved; no consensus
• Aussie              Westpac Consumer Confidence         Deteriorated; no consensus
• China               Trade Balance                                     Worse; surplus plunged
• China               Exports                                                Worse than expected
• China               Imports                                                Better than expected
• See Live Macro calendar for all details

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

• Atkins sees FY slightly ahead of market expectations
• Halfords Q4 underlying sales up 0.4 pct
• Halfords to hit year profit forecasts
• Dunelm – total revenue for the third quarter grew by 15.4%
• Prezzo 2012 revenue up 17 pct to 144.5 mln stg
• African Minerals says expects to produce 15-18mt in 2013
• Silence Therapeutics raises 19 mln stg from investors
• RWS expects to report higher H1 revenues
• GW Pharma says UK eases restrictions on sativex
• Vedanta full-year zinc production dips, oil up