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

UK 100 called to open -5pts at 6536, taking a lead from US and Asian markets overnight as global markets react to the continuation of US stimulus tapering. Last night, the FOMC voted unanimously to reduce asset purchases by a further $10 Bln. Although most of the damage had already been done to US indices, we did see a further sell-off, leaving the Dow Jones to close down 189 points at 15,738 whilst the S&P was down 18 points at 1,774.

Asian markets were all down thanks to emerging market concerns and the continued withdrawal of stimulus by the Fed weighing on risk. Japan’s Nikkei was the biggest loser, down 376 points at 15,007 helped by softer retail sales. The Hang Seng ended the shortened pre-holiday session off 106 points at 22,035.

Overnight data did little to inspire as Aussie import/export prices both came in lower although new home sales data was in-line. Chinese manufacturing PMI came in at 49.5 vs 49.6 as expected. Slightly worse and still below the key 50 number.

Facebook reached a key milestone in the last quarter when more than half its advertising revenue come from mobile devicies. Revenue was up 63%  at $2.59bil vs $2.35bil expected also EPS beat. Facebook were up 12% after market hours. Qualcomm the largest maker of mobile chips reported bumper profits beating on EPS but slightly missing on revenue countering claims that the slowing smartphone growth would crimp earnings.

In focus today firstly will be the reaction to weaker than expected Chinese HSBC Manufacturing PMI which came in at 49.5 vs. 49.6 expected. Later this morning Germany release the unemployment rate and unemployment change at 8:55. At 13:00 they also release CPI rate. Then at 13:30 US release Q4 GDP data and Initial and continuing jobless claims.

Some of the companies that have reported this morning… BskyB (BSY.L) posts profits of £595m down 8%. Revenue missed at £3.75bn vs. £3.76bn expected. Diageo (DGE.L) reported 1.8% rise in half year or 62.6p per share. Royal Dutch Shell (RDSB.L) reported earnings of $2.9bn in line with their profit warning of 17^th January.  Check the ‘company headlines’ for a list of others.

UK 100 futures seems to have formed a base/level of support around 6,500 after the recent drop we’ve seen. 6,500/6,480 should provide support to the downside and we look to see if we can head back toward 6,600 as the first significant resistance to the upside.

In FX, the Yen maintained gains against major peers following the Feds decision to continue scaling back stimulus – dented demand for riskier assets. The Dollar rose against emerging market currencies despite intervention by the South African and Turkish Central Banks. Next focal point for FX traders will be US GDP data at 13:13 today.

Gold advanced to $1268 overnight as investors sought safe havens amid the rout in emerging-markets assets. The metal later declined to $1258 as a result of Fed policy makers reducing monthly bond purchases by $10bn.

WTI rose again reaching a high of $96.50, paring its biggest monthly decline since January 2010. Whilst crude stockpiles rose for a second consecutive week, demand for heating oil surged to the highest level in almost six years as the cold weather continues in the US.

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

• AU            Export Prices (QoQ)            WORSE
• AU            Import Prices (QoQ)           WORSE
• AU            New Homes Sales               IN-LINE
• CH            Manufacturing PMI                        WORSE

See Live Macro calendar for all details

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

• Lonmin offers AMCU 7.5 to 9.0 percent wage increase
• RPC says financial position remains robust for 2014
• Kazakhmys annual copper output at top end of guidance
• Great Portland Estates net asset value rises 22.6 pct
• Johnson Matthey says outlook has improved
• 888 annual revenue rises 7 pct to $401 mln
• United Utilities says current trading in line with expectations
• Playtech says revenues, core earnings to be ahead of current analyst consensus
• SuperGroup appoints Hans Schmitt to its board
• Aquarius Platinum says to dispose of two non-core assets
• Britain’s 3i completes $48 mln exits in third quarter
• Christmas trade boosts sales at pub group M&B
• Spectra Systems says 2013 performance to meet expectations
• National Grid says trading in line with expectations
• National Grid maintains positive full-year outlook, investment
• ITE Q1 trading ahead of internal expectations
• Diageo sales up 1.8 pct in first-half on emerging mkt weakness
• BSkyB beats first-half profit forecasts on strong product growth
• Euromoney says Q1 revenue up 3 pct to 98.4 mln stg
• Cranswick Q1 underlying revenue up 13 pct
• Renishaw sees improvement in second-half trading
• Centamin forecasts 18 pct rise in production from Sukari Gold Mine
• Shell to cut spending and step up disposals in 2014
• Platinum miner Lonmin to reassess guidance due to strike