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

UK 100 called to open +15pts, helped by continued strength from Asian bourses in the wake of improved US consumer sentiment and optimism on US economic recovery, and another record close by Europe and Wall Street on Friday.

Nikkei performance helped by upgraded assessment of economy and unperturbed by comments from Japan’s Economy Minister that USD/JPY rate might be appropriate, with further weakening a negative for consumers.

South Korea hindered by its northern neighbour’s missile launches. China strong on rising property price data. Hong Kong back from holiday. Overnight data includes solid UK house prices and improved sentiment indices but worse sales from Japan.

In focus today: just the Chicago Fed index in the afternoon, amid a very light macro slate with many European markets quiet on account of public holidays.

Later in the week, however, we have Eurozone Confidence indicators (IFO, PMI) which will be much in focus after the disappointing GDP of late from the region and major components (Germany seen confirmed weak 0.1%). PMIs (Manufacturing & Services) seen improving a touch but remaining in contraction increasing calls for another ECB rate cut.

UK Q1 GDP (2^nd est) with all eyes on whether we see any revision to the 0.3%. Upward backing up Mervyn King’s bullishness? Or downward, pulling the optimism rug from under us.

Fed Chairman Bernanke’s testimony will be scrutinised for updates on expectations of QE3 tapering, given the conflicting comments from Fed members (both voting and non-voting), while housing and durable goods orders could sway sentiment too. BoE minutes watched for voting balance ahead of governor change, while UK Retail Sales eyed for update on consumer sentiment.

The UK 100 has pushed on from its week of consolidation 6670-6715 to test 6750 overnight. Was that it? Pause over. Can we assume the trend continues, with another 200pt rally on the cars, taking us to 1999 highs? Global appetite for equities (I say equities rather than risk as the drivers remain a mix of high and low beta)  remains strong amid the search for yield.

 In FX, GBP/USD failed to find support at 1.52, after Friday’s Uni of Michigan drove the dollar higher on the premise that high consumer confidence means economic growth and a chance of the Fed tapering QE3 earlier than expected.

Similar story for EUR/USD with a test of 1.28, close to 3-month lows of 1.275. Bounce or further declines? USD/JPY holding above 102.5. AUD found a bit of strength but still in major decline. Bounce before May 2012 lows?

 Gold still pressured by same drivers: stronger USD on prospect of Fed tapering, benign inflation negating need for hedge, equity rally and backstops reducing safehaven demand and retail investor fears of holding a declining asset (ETF selling). . Move down to $1340 taken yellow metal close to April crash lows of $1320. Will it go the distance?

Oils rebounded on economic growth hopes and despite stronger USD, supply issues and despite prospect of US Shale competition. Brent Crude slowed up at $105, just shy of May highs of $105.5. US Light Crude also slowed up at $96.5, after rebound. May highs $97-97.5.

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

• UK                    House Prices                           Stable
• Japan               Tokyo Appt Sales                     Deteriorated
• Japan               Coincident Index                     Improved
• Japan               Leading Index                          Improved
• Japan               Nationwide Dept Store Sales  Deteriorated
• Japan               Tokyo Dept Store Sales           Deteriorated
• See Live Macro calendar for all details

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

• E2V Technologies full year trading in line
• Ryanair sees profit growth slowing in current year
• Cranswick full-year profit rises 8 pct
• Sirius Minerals says confident can overcome planning objections
• Firstgroup to raise 615 mln stg from investors
• Xcite Energy receives $15 mln from data sale
• Salamander Energy maintains 2013 output target
• Vatukoula Gold raises 4.5 mln stg in subscription deal
• Great Portland Estates secures pre-let at new London unit
• BTG says on track as underlying pretax rises
• FirstGroup launches rights issue as profit falls
• Morgan Stanley to sell India wealth management unit to StanChart