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

  UK 100 called to open +15pts (ex-divs -9.6pts), having tested the key 6700 5yr high overnight, helped by a positive close in the US (more record highs) despite nothing ground-breaking from Eurozone Finance Ministers (still mixed on unsecured depositor bail-ins and how to manage bank wind-downs) a stronger USD and mixed session in Asia.

 European markets had pushed higher on improved risk following extremely bullish comments from a renowned hedge fund manager (not worried about Fed tapering its QE3) , and strong demand for Spanish 10yr debt auction leading Italy to attempt a sale of 30yr paper on improved peripheral sentiment.

US markets continued their grind to new all-time highs on bullish comments and the USD continued to strengthen against JPY (and EUR) which. Along with the weak JPY helping exporters, there was talk of PM Abe adding more growth measures. Japan’s Nikkei moved to new highs, the strongest performance in Asia. Australia held back by bigger budget deficit, worse outlook on China and miners hindered by fragile commodity prices.

 Key overnight data was GDP numbers from France and Germany. Both disappointed but most notably Germany after its recent strong Factory orders and Industrial Production data. This morning’s numbers don’t bode well for the Eurozone figure later, but futures registering little concern as I write.

In focus today will be the UK Unemployment data which is seen largely unchanged after last month’s improvement. The BoE’s inflation report will be King’s last and could see him offer signs of a slight recovery (optimism, lower inflation). Will he leave on a high?

Eurozone GDP likely to disappoint, keeping the region firmly in contraction after France and Germany missed this morning. US Empire Manufacturing state seen improving a notch. US Industrial & Manufacturing Production seen mixed, while US NAHB Housing should tick up a touch.

UK 100 maintains uptrend to test 6700. I’m still concerned at steepness of recent ascent (correction/consolidation), but no signs of a pause for breath yet. Still potential for catch up with global peer bourses which are trading all-time highs. As they say, the ‘trend is your friend’ and ‘don’t fight the Fed’ (especially when its major peers are printing/helping too).

 In FX, GBP/USD back down at late-April lows of 1.52 as USD strengthens on JPY and EUR weakening (Japan printing, EUR growth concerns and benign EZ inflation). EUR/USD down at 5-week lows testing 1.29. Downside potential to 1.275 3-month lows. USD/JPY up through 102.3. AUD trading fresh multi-month lows (Jun-12) vs USD.

 Gold continues its break lower, this time through $1420 hindered by the USD’s continued strengthening, talk of Fed having exit strategy for QE3, less need for inflation hedge, and equity rally reducing safehaven demand.

Oils remain under pressure from stronger USD with US Light Crude down near $94, well off recent highs of $97. Brent Crude also suffering, down around $102, well off 1-month highs of $105.5. US Shale gas also boosting hopes of competition Oil prices

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

• Japan               Tertiary Industry Index           Worse
• Aussie              New Motor Vehicle Sales       Deteriorated
• Aussie              Wage Cost Index                     Worse
• Japan               Consumer Confidence             Worse
• France             GDP                                         Worse
• Germany         GDP                                         Worse
• See Live Macro calendar for all details

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

• HSBC targets additional $2-3 bln cost savings by 2016
• HSBC may cut up to 14,000 more jobs -slides
• Lonmin’s S.African workers strike for second day
• Marshalls revenue down 6 pct, says on track for FY
• Land Securities – Adj NAV p/share up 4.1% to 903p
• Serco says on track to meet 2013 expectations
• Cineworld says trading in line with expectations
• Enquest says on track to meet FY production guidance
• Lookers says Q1 results ahead of budget
• Restaurant Group sales up, upbeat on new site prospects
• Compass H1 profit before tax up 8.1 pct
• ITV warns of sharp fall in Q2 net ad revenue
• Severn Trent rejects takeover approach
• John Wood Group – Performance in line with expectations
• French Connection says trading in UK, Europe retail broadly flat
• EasyJet first half improves as Brits flee cold winter
• Hill & Smith retains full year outlook
• Atkins, Costain, Veolia jv wins Thames Water deal
• Chariot Oil successful in bid for Brazil exploration blocks
• Centamin Q1 earnings jump 71 pct, operations on track
• London Stock Exchange reports 7 percent increase in revenue
• Balfour Beatty jv wins Thames Water contract
• Centaur Media warns on profit
• Barratt Developments agrees refinancing
• Xchanging to sell transaction bank stake to partner