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

  UK 100 called to open +35pts, with the rebound in risk appetite from Friday continuing, helped by positive reporting season so far, and despite the UK losing its AAA rating to Fitch, mirroring Moody’s, although a stable outlook is better than the latter’s Negative. The re-election of Italian President Napolitano (unprecedented) could also help move the country from its political deadlock (Parliament can now be dissolved).

Asian markets benefiting from further weakening in the JPY, after a lack of criticism of the BoJ’s new extra-easy policy by the G20, helping Japan’s Nikkei to near 5-year highs. Chinese equities underperforming after the weekend earthquake in the Sichuan province. S&P says Australia Mining investment will peal this year, potentially seeing a lull in activity until other sectors pick-up.

In focus today, amid alight a light macro line-up, is US Housing and Eurozone Consumer Confidence, with both seen pretty much stable. Q1 results continue in the US with big names Halliburton and Caterpillar updating. Both have a bearing on sentiment for growth in resources demand (Oil & Gas and Mining, respectively) so could move the markets. Texas Instruments reports after the US close.

Later in the week the updates of major importance will be the first estimates for UK and US Q1 GDP, with all eyes on the former to see if it avoided a triple-dip recession with a flat quarter’s growth, despite the cold weather denting consumer demand and construction in Feb and March. Furthermore, this could decide whether the BoE moves for more QE in the months to come.

The US GDP figure will also be of interest given the mixed macro data of late (housing, jobs, spending, sentiment), so while the Q1 is set to show improvement, focus is likely to be on the potential for Q2 to be slightly less inspiring, although the quarter is still young. Chinese Manufacturing PMI key after weaker GDP, although PBOC governor said weaker Q1 is ‘normal’ and needed for restructuring.

UK 100 tested key 6350 level overnight as risk appetite maintains its rebound. Still in narrow sideways range of 6220-6350. Break to upside open possibility of March correction being complete and resumption of longer term rally. Further weakness and break below 6220 could mean correction persists. Oil price (a good proxy for risk appetite) looking under pressure.

 Gold continuing to make ground above $1400, a level which could to become support for any weakness. Resistance likely at $1550 level of support abandoned mid-month.

In Oil, Brent Crude found resistance at $100 level after rebound from $97 on Thursday, while US Light Crude found the same at $89 after bounce from $86.

In FX, GBP/USD back down around 1.52 which was supportive late last week. Resistance likely just shy of 1.54 after multiple failed attempts to get there. GDP data and expectations thereof from UK and US could dictate direction. EUR/USD also struggling to make ground with pressure around 1.31, although support likely around 1.30.

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

• Japan               Supermarket Sales                              Rebounded
• See Live Macro calendar for all details

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

• Informa says Q1 organic revenue fell 3.6 pct
• Bglobal expects to break even in full year
• GW gets U.S. patent allowance for Sativex formulation spray
• Betfair board rejects CVC bid
• Reckitt Benckiser posts 6 pct growth ex-RBP in Q1
• UBC Media says trading in line
• Creston says cash flow ahead of view
• Genel Energy maintains 2013 guidance
• Roxi Petroleum says testing indicates oil
• Lloyds Banking Group raises 350 mln stg in equity
• Spirent Comms warns on profit as market slows