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

• Chemring wins U.S. radar contract
• Imperial Tobacco upbeat mood prompts buyback
• BP Q1 profits fall as oil spill still weighs, to sell some Gulf of Mexico fields
• Lloyds takes further £375m mis-selling hit
• Hedge fund firm Man Group says client outflows slow
• AMEC wins Gulf of Mexico engineering contract
• Cape Q1 revenues rise 16% from a year ago
• CSR Q1 revenue +38% driven by voice and music
• National Express reports strong Q1 revenue growth
• African Barrick Gold granted waste rock permit in Tanzania
• Capital & Regional to buy shopping centre for £130m
• Lamprell wins $227 mln contract for jackup rig
• Rolls-Royce awarded $315 mln F-35 deal by Pratt & Whitney
• Xstrata Q1 copper production down 18 pct

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

UK 100 called to open -15pts after US markets closed a touch lower following disappointing macro data in the form of Chicago PMI, Dallas Fed and mixed figures on US personal income and spending. The fact that this dovetailed off poor US GDP and Jobless figures last week didn’t help, and added to expectations that the US central bank (Fed) will have to crank up its money printing presses (QE). As we said yesterday, this Friday’s Non-Farm Payrolls will, as always, be an important number.

Overnight, Chinese PMI Manufacturing missed expectation, however, only slightly and the figure has now been in growth territory (>50) for the last 5 months. Australia cut its interest rate by a more-than-expected 50bps after recent weak inflation figures. This was supported by another month of weak housing data. India’s trade balance narrowed, despite its imports rising and exports falling by more than last month. Holidays across Asia mean markets remain subdued with Japan and Australia the only major markets open. It’s the same case in Europe today with only the UK open as many in Europe celebrate May Day.

Results this morning show UK 100 components such as Lloyds Banking Group (LLOY) making a bigger pre-tax profit than expected but also made another big provision for PPI. BP (BP.) looks to have beaten expectations, as have adjusted results for Imperial Tobacco (IMT).

Morning Press Selection:

• China PMI strengthens further in April – FT.com – Asia-Pacific http://on.ft.com/ImfXaJ
• Berlin insists on eurozone austerity – FT.com – EU Economy http://on.ft.com/KqyXTM
• Italy to cut spending and avoid VAT rise – FT.com – Europe http://on.ft.com/IjKuVu
• Shadow banking: destructive and benign – FT.com – Lex http://on.ft.com/JXFJ62

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

• China               PMI Manufacturing    Worse, but still growing
• Australia          House Prices               Bigger contraction than expected
• Australia          Interest Rates              Cut more than expected
• India                Trade Balance             Deficit narrows

Results out from UK 100 components BP, Lloyds Banking Group, Imperial Tobacco and Reckitt Benckiser