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

UK 100 Index called to open -40pts at 6820, having fallen back from 2014 highs of 6905 and a rebound from 6800 find resistance at 6860. This keeps us within our 6730-6900 sideways channel from 21 Jan. The bulls remain hopeful of 6950 all-time highs being challenged and will be thankful that 6800 support has held up since yesterday afternoon. Bears still calling for correction. Updated Watch levels: Bullish 6870, Bearish 6775.

The negative open comes after the ECB suspended its waiver of Greek bonds being used as collateral as part of its current bailout program and although this doesn’t affect counterparty status of Greek banks, who can still get liquidity via Emergency Lending Assistance (ELA), when coupled with existing political stubbornness it has revived fears of a messy Greek conclusion with the country potentially running out of money by March.

The news suggests the powers that be putting the country and its new government under more pressure to comply with bailout rules and has offset optimism yesterday as PM Tsipras and Finance Minsiter Varoufakis did the rounds with their proposals and expressed confidence in a re-financing deal. Note strong Factory Orders from Germany this morning providing a little support to equities.

US bourses closed mixed and off their highs after the ECB-Greek news. The continued reversal by Oil from recent highs also weighed on energy stocks, along with another big build in US Crude Inventories and market participants looking to sell any Oil recovery rallies. Hawkish Fed talk (Mester; comfortable raising rates in H1) added to USD strength revival and offsett largely solid macro data (ADP, PMI Services).

Asian bourses mixed, hindered by investors reacting to the ECB tightening of the terms of Greece’s bailout, and the possibility that the situation takes a turn for the worse which has served to offset the expected boost from China’s PBOC cut in the RRR yesterday. Australia higher buoyed by China stimulus and despite mixed macro data (Home and Retail Sales).

In focus today will be the UK BoE Rate announcement even if no change to policy is expected. Thereafter we have US Challenger Jobs cuts, and US Jobless Claims seen rising back from their lows of last week. US Non-Farm Productivity is expected to have dropped in Q4, a bit like the recent GDP reading.

Gold remains in a narrowing trading range of $1255-1275, with falling highs and rising lows making the next week or so interesting. Which way will it break? The yellow metal brightened overnight, helped by the ECB’s (surprise?) hard-line decision on Greece sending risk-averse investors towards the safehaven on renewed Eurozone fears.

Oil has retraced Wednesday’s gains after US Crude Inventories grew yet again highlighting the global supply glut problem. Note WTI ($47.7) and the Brent $(53.4) benchmark retreated (8.4% and 5.9% respectively) to late January levels and may well be sinking back to Jan lows, remaining in an overall downtrend from August 2014.

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

• Australia              New Home Sales              Plunged
• Australia              Retail Sales                         Missed, slightly improved
• Germany             Factory Orders                  Beat, improved

See Live Macro Calendar for full data line-up, incl. consensus expectations

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

• BT agrees to buy EE from £12.5b
• BT to raise 1 bln stg via a placing to fund EE deal
• Vodafone posts better than expected Q3 sales
• Non-Standard Finance to float on London stock market
• UK grocery watchdog to probe Tesco's supplier practices
• Premier Farnell sees FY operating profit between 86 mln stg and 88 mln stg
• Compass maintains financial outlook but warns on lower oil prices
• Smith & Nephew confident after fourth-quarter profit rise
• AstraZeneca to buy Actavis lung drugs as Q4 earnings fall short
• Bookrunner Barclays says BIS to place Greencoat UK Wind shares
• Beazley FY pretax profit falls to $261.9 mln
• Grainger says achieves robust sales, good rent in new year
• Easyjet January passenger numbers stay flat
• Brookfield Property says Songbird offer becomes unconditional
• GSK agrees sale of Genmab stake for 194 mln stg
• Shanks buys Dutch hazardous waste treatment facility
• Wincanton says continues to trade in line with expectations