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

  UK 100 called to open +20pts at 6600 after further gains for European and US equities although Asia more muted after limited overnight data drivers and the now familiar wait-and-see ahead of a US data deluge today as well as another chance for Fed Chairman Bernanke to add more clarity/confusion to the now long running QE3 tapering debate with his testimony tomorrow (USD rising suggests expectations of reiteration of taper timetable, ignoring the likelihood of delays).

 Overnight the main event, given the focus on central banks and unconventional policy/stimulus was the RBA minutes which, although still dovish, appeared to imply less chance of further easing with comments related to the recent weakness in AUD that policy appropriate given FX adjustments. Fitch cut EFSF rating to AA+ from AAA after last week’s French downgrade.

 In China, after the sigh of relief following the not-as-weak-as-it-could-have-been Q2 GDP figure, equities (financials and property in particular) held back by official news report from China Securities Journal that growth of below 7% was acceptable. Sing, same, hymn sheet, please? The Asian Development Bank also trimmed Developing Asia 2013 GDP growth with China taking the brunt, but said slower growth helping combat inflation and Japan’s Abenomics bearing fruit.

 In results, Rio Tinto published record iron ore output in Q2 despite equipment breakdown and unseasonal weather, and company recovering from US mine landslide quicker than expected. Company weighing options to further raise iron ore capacity in Australia, including new mines and boosting existing productivity.

 In focus today will be the heavy macro data slate, with UK Inflation likely accelerating, giving newly arrived BoE Governor Carney the chance to pen his first apology to the chancellor as the annual CPI rises back to 3.0% (core 2.3%) although monthly readings seen flat-to-down. Eurozone CPI seen confirmed at below target in June, still offering the ECB the option of a rate cut to help the struggling region. Germany’s ZEW Surveys seen improving.

 In the afternoon, it’s all eyes on the US (as usual) with CPI rising, but remaining similarly below target to the Eurozone (how envious must Carney be?). US Industrial & Manufacturing Production both expected to tick up in June while the NAHB Housing number is seen cooling a touch.

 Outside of macro data, note we have a Spanish and Greek government debt auctions which will be watched given the renewed stresses in the periphery (Portugal, Spain). Result-wise, it’s still all eyes on the US banks after the JPMorgan, Wells Fargo and Citigroup beats for Q2, today’s turn falling to the Goldman Sachs which smashed exceptions last time it reported. Big names Coca Cola and J&J also reporting potentially providing clues as to the health of the US economy.

 The UK 100 still trading sideways but towards upper end of recent 6540-6600 range. If this is the pause after the recent 10.5% rally this would be a good sign vis-à-vis another up-leg although it is likely to hinge on Bernanke communication tomorrow. Rising support trendline from 5-July intact.

 In FX, GBP/USD stuck around 1.51 after bounce from March lows. Pause linked to markets awaiting Bernanke update. Still falling highs from mid-June. EUR/USD also within recent 2-day range of 1.30-1.31 with confusion on QE3 tapering continuing to fight with Eurozone woes. 3-month sideways trend intact.

 In Commodities, Gold sideways in-line with USD ahead of Bernanke testimony. $1300 still a hurdle amidst bounce from end-June lows of $1,180. Settled around $1280.  Oil remains in up-trend despite concerns over global growth after China update yesterday. US Light Crude back from $106 but with support around $105 (bullish ascending triangle pattern?). Brent Crude also trading at top of recent range $108.2. Pause for breath or ceiling?

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

• JP             Condominium Sales                        Strong growth, but slowed
• EZ            New car Registrations                    Continued declines

See Live Macro calendar for all details

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

• Premier Oil sells assets off Vietnam
• BTG says trading in line with internal expectations
• Ricardo says traded well over last two months
• Dairy Crest says Q1 trade in line with expectations
• PageGroup Q2 profit falls 2%
• Dragon Oil says output rises 15%t in H1
• Max Petroleum begins drilling the UTS-10 well
• Computacenter sees flat H1 revenues
• ITE Group revenue rises 25%
• Glencore puts $5bn Las Bambas project up for sale
• Russian steelmaker Evraz says Q2 output up 1.1% year-on-year