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

  UK 100 called to open -5pts, after a mixed session in Asia despite the first signs of Japan’s new PM’s Abe-nomics delivering early results with Q1 GDP beating expectations (fastest growth since Q1 2012) and industrial production for March seeing upward revisions.

 Nonetheless, Japan’s Nikkei seen a bout of profit taking after strong gains of late and a stronger JPY following the GDP surprise. This negated positive EU and US sessions, which were helped by stimulus hopes from ECB and Fed (no tapering of QE3 soon) following some poor data releases on both sides of the pond and reiteration of bullish comments from earlier in the week as equities probe multi-year if not all-time highs.

 Although the BoE’s outgoing governor Mervyn King delivered a more upbeat quarterly UK inflation report (GDP forecasts up, inflation down) he highlighted the Eurozone weakness as a hindrance, and the report likely didn’t incorporate poor GDP numbers from Germany and France out just hours earlier.

 Elsewhere in the region Australia also weak due to continued USD strength (optimism on US growth) putting pressure on commodities and resources-related stocks. Hong Kong helped higher by a buoyant China by some better than expected corporate earnings and despite the latter reporting a surprise slowdown in Foreign Direct Investment (FDI).

 In focus today will be the Eurozone Consumer Price Inflation (CPI) which is seen softer in April adding flexibility to the ECB’s option of further rate cuts. IN the afternoon, data includes US Jobless Claims (expected stable), US CPI (a touch softer in April). Given their ability to move FX and markets, beware the long list of central bank speakers today.

 The optimism of the US householder will be gauged via updates on US Building Permits (seen rebounding) and Housing Starts (seen cooling for a second month). After Empire State Manufacturing failed to show an improvement, will the Philly Fed deliver the same denting some of the bullishness that have seen US equities make continued new all-time highs?

 The UK 100 was unable to better the prior nights’ high of 6711 but did manage a tenth straight positive finish. With Japan taking a breather, the risk is that Europe follows suit with its pause likely overdue. Support still available around 20-25pts away. Still potential for catch-up with global peer bourses trading all-time highs.

 In FX, GBP/USD still in downtrend from 1.56. Support hindered declines much below 1.52, but pressure remains as USD benefits versus major peers. EUR/USD also still in downtrend but still well above end-March/early-April lows of 1.275. USD/JPY holding above 102. AUD trading fresh multi-month lows (Jun-12) vs USD.

 Gold broken below $1400 on continued headwinds; stronger USD on US optimism, the prospect of the Fed tapering its QE3 on improved economy, benign global inflation meaning less need for a hedge, global equity rally and backstops reducing safehaven demand.

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

• Japan               GDP                                         Better
• Japan               Industrial Production             Improved
• Japan               Capacity Use                           Deteriorated
• China               Foreign Direct Investment      Worse
• France             Wages                                     Improved
• France             Non-Farm Payrolls                  Better
• See Live Macro calendar for all details

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

• Cairn Energy exploration programme on track
• Petrofac – on track to meet 2015 earnings target
• Inchcape 4 month sales up 4.5 pct
• Britain’s 3i exceeds cost savings target
• Vodafone agrees network deal with Deutsche Telekom
• Aviva – New business up 18 pct in first quarter
• Trinity Mirror says revenue trends improving
• Premier Oil maintains 2013 production guidance
• Premier Oil awarded three blocks in Brazil
• Balfour Beatty wins Australia rail contract
• Travis Perkins revenues dip, sees H2 improvement
• Soco says will return capital to sharheolders in H2
• Oil assets help Vedanta Resources profit up 21 percent
• Vedanta Resources posts final dividend of 37 cents per share
• Synthomer says demand in Europe weaker than anticipated
• Talktalk returns to revenue growth
• Marston’s H1 profit falls, eyes H2 improvement
• SIG says trading conditions been challenging so far in 2013
• Lower copper price hits Antofagasta Q1 profit
• Heritage Oil says Nigeria output heading back up
• UTV Media says qtrly revenue falls
• Dixons sees year profit at top end of forecasts
• Thomas Cook announces 1.6 bln stg refinancing plan
• Glanbia says on track to meet 2013 earnings targets
• Capital and Regional occupancy rises to 94.6 percent
• Shanks Group Plc says 2013 Revenue £670 mln
• Euromoney first-half profit rises
• Miner NWR looks at possible mine sales after record Q1 loss
• Hikma Pharmaceutical expects group revenue to grow by around 13% in 2013
• National Grid year profit rises 6 percent