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

UK 100 called to open +45pts at 6585, making a significant near-100pt recovery from another sell-off back to 6500 support and bringing us all the way up to the 6600 level we had been eyeing as the next potential hurdle for a breakout helped by some not-so bad Chinese data overnight.

The drop was driven by factors including; weak US Manufacturing and Housebuilder data which put caused concern about the US economy; stronger US inflation prints were good to see but also boosted fears of earlier rate rises; Fed Chair Yellen suggesting big US banks may need additional capital didn’t help during Q1 reporting week; escalating tension in Ukraine.

The turn back higher was helped by Q1 earnings beats from the likes of Coca Cola, J&J which boosted optimism for earning season as a whole and appeared to trumped the worsening geopolitical situation surrounding the Ukraine. After the positive close by US equities, results from Intel were better than feared and Yahoo! said Alibaba profits jumped. Fed speak from the likes of Rosengren also reiterated accommodation patience despite progress.

Overnight risk appetite got an additional boots from Chinese data showing that while GDP growth has indeed slowed both quarterly and annually (slowest in 6 quarters), it did so less so over the year than expected. In addition, while Industrial Production missed, it did accelerate a touch and Retail Sales actually accelerated. On the whole, bulls taking solace from a case for more stimulus to bolster growth as well as growth not quite tanking either.

In Asia, stocks positive with relief rallies following the China data with Japan’s Nikkei outperforming thanks to a weaker JPY (stronger USD) and comments from the finance minister regarding stocks and the government pension fund. Australia’s ASX benefiting from strong China links and perceived continued demand for resources (watch the miners this morning).

In focus today we have UK jobs data seen showing a drop in the claimant count and unemployment rate and a boost in average weekly earnings. Eurozone CPI is seen rebounding in March which would help the ECB justify their ‘well anchored’ talk. Q1 results continue from the US with Bank of America before the US opens, while IBM and Google report after the US close.

After the drop in US homebuilder confidence yesterday, US Housing starts and Building permits of interest for consumer confidence with a rebound expected in the former but a cooling by the latter. US industrial Production seen solid in March. Fed Chair Yellen speaking again and the Beige book published tonight.

In commodities; Gold still under pressure but recovered from lows of $1290 to trade back around the $1300/oz mark. Held back by prospect of further cuts to Fed stimulus programme as economy signs of recovery. Ukraine situation while tense, not providing as much support as some might expect. Oil prices seen Brent get close to $111/bl overnight on disruption fears from Ukraine but fallen back to 110/bl on Chinese data confirming slowing. US Light Crude rallied from $103/bl to $104 ahead of US inventory data this afternoon.

UK Results today: Persimmon (PSN.L) Private sales +25% in first 15 weeks, forward sales £1.87bn, revenue +35% from 2013, forward sales 7,200 homes for 2014, sold ~5,000 homes under Help to Buy, “the new financial year has started well”. Tesco (TSCO.L) Final dividend 10.13p, writes down China unit by £540m, FY trading margin 5.17% vs. 5.1%E, “uncertainties remain in industry” annual profit -6% to £3.32bn vs. £3.23Bbn est, FY UK sales -0.1% to just over £48bn, “strong growth in online UK grocery”.

Reckitt Benckiser (RB..L) Q1 Net revenue £2.73bn vs. £2.38bn, Q1 L-f-L sales growth (ex-pharma) +4%, in line with expectations, “sees flat to moderate operating margin expansion”. Burberry (BRBY.L) Strong sales in China and Korea helped it to a 19% rise in H2 revenue to £1.298bn vs. £1,296bn est, “Should exchange rates remain at current levels, retail and wholesale profit for FY would fall by £30m while the impact on FY 2015 would be material”. Hargreaves Lansdown (HL.L) Asset under Management (AUM) rises by £2.3bn to £45.7bn, quarterly net inflows of £1.83bn, net revenue up 8% to £216m year to date “Budget changes sea change of opportunity”. Fresnillo (FRES.L) Silver production 10.4m oz, Gold production 82,653 oz, production targets on track for 43m oz of silver, 450,000 oz of Gold.

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

• CN       Business Climate Index          Improved
• CN       Fixed Asset Inv. ex-rural         Miss, slowed
• CN       Retail Sales                             Beat, accelerated
• CN       Industrial Production               Miss, slowed
• CN       GDP Quarterly                         Miss, slowed
• CN       GDP Annual & YTD                  Beat, but slowed
• JP         Industrial Production               Miss, slowed

See Live Macro calendar for all details

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

• Hunting says Q1 slower than expected
• Russia's Evraz says crude steel output down 8 pct q/q
• Reckitt Benckiser posts higher sales, says pharma review ongoing
• Hargreaves Lansdown assets reach 45.7 billion pounds
• Fresnillo says gold down but on track to meet guidance
• Lancashire names Maloney CEO as founder Brindle retires
• Fastjet to raise about 3.9 mln stg from placing
• Burberry second-half revenue jumps 19 percent
• Bunzl announces three acquisitions in Chile, U.S and New Zealand
• Housebuilder Persimmon says its new year starts well
• Dialight maintains full-year outlook despite currency headwinds
• Quindell says Q1 adj EPS at 0.82 pence