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

  UK 100 called to open flat at 6820, back down around the breakout level of yesterday after momentum was lost following a failed attempt at 6850 with conviction lacking as the US and UK move into long weekends and macro data failed to inspire.

 US stocks finished higher, the Nasdaq outperforming as Tech finds support while the S&P500 gained a quarter percent but the DJIA just above breakeven as trading remained quiet after some soft US macro data (jobless Claims, Existing home Sales, Chicago Fed Manufacturing) even if PMI Manufacturing and Kansas City Fed showed gains. While markets worry about China (#2 economy), they are just as interested in the US (#1).

 Asian bourses again taking the US lead with all positive but amid quiet trading ahead of long US/UK weekends. The Nikkei outperforming thanks to a weaker JPY. Hang Seng showing smallest gains and mainland China flat after China Conf Board Leading Economic Index showed growth slowing in April. Australia equities are a quarter point to the good.

 In Europe, the ECB’s Weidmann said he and colleagues prepared to take unconventional measures to counter the region’s inflation risks but highlighted the risk of deflation as low. Ratings agencies S&P and Fitch also delivered upgrades to Spain (BBB, Stable) and Greece (B, Stable). German GDP just out shows Q1 growth unrevised in the region’s industrial powerhouse.

 In focus today we have German IFO Surveys at 9am with expectations for a slight pullback in May for the Business Climate and Expectations components. Thereafter we have US New Home Sales at 3pm where a big jump is expected in April to offset March’s weakness, important after the Existing Home Sales miss yesterday. Note potential for rating agency updates on France and the UK also.

 The UK flagship index is back around its 6820 breakout level of yesterday after a failing at 6850. The index remains above the trendline of falling highs from 15 May, but did test as low as 6808 yesterday afternoon. The tight trading range by futures can be attributed to lack of conviction ahead of a long weekends in the US and UK as well as geopolitical and macro-economic uncertainty. Potential for both a rally from support was well as a gentle sell-off back to 6770.

On the corporate front note Saga’s (SAGA) London debut this morning with the IPO was priced at the bottom end of its 185-245p range to ensure a strong debut for Saga retail customers taking part.

 Gold remains below $1300 as traders continue assess the health of the US economy via mixed data and factor in the impact of monetary policy normalisation and the tapering of stimulus (all keeping it in a tight range), while also contending with increased geopolitical uncertainty. Copper ($6874) is headed for a third weekly gains after yesterday’s strong China’s and US factory output.

 WTI ($103.9/bl) of its highs but also headed for a third weekly advance on falling US stocks (biggest drop in four months) and rising fuel demand as well as geopolitical uncertainty helping its peer Brent to hold up around $110 coupled with the strong China data of yesterday.

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