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

UK 100 Index called to open +5pts at 7145, having twice found support at 7130 overnight before a rebound towards the 7160 ceiling of a two-week falling channel. Bulls excited by overnight support in the middle of the current range but a breakout above 7160 is still required. Bears glad the 7160 ceiling held firm but need a breach of 7130 overnight lows. Watch levels: Bullish 7165, Bearish 7125.

Calls for a mildly positive open come after a mixed but muted finish on Wall Street mirrored by some contrasting performances in Asia overnight. Investors are making their monthly pilgrimage to the sidelines ahead of a closely scrutinised US jobs report, one which may provide the US Fed with more evidence about whether another US rate hike is warranted soon.

This could see the US Dollar react with a knock-on for both global equities and commodities. Note the Greenback having found support since mid-yesterday to send the GBP, EUR and Yen lower to the benefit of their respective equities and indices.

Japan’s Nikkei is positive thanks to some welcome Yen weakness since yesterday afternoon to boost sentiment towards exporter names overnight. A poor PMI services figure has failed to depress.

In contrast, Australia’s ASX is in the red as metals (especially Iron Ore; down 7%) suffer from the stronger USD although oil is doing well to help Energy thanks to continued optimism about OPEC production cuts. Its Services PMI missed too.

Chinese equities are back trading after the Lunar New Year holiday but are in the red, playing catch-up with recent global declines and after PMI Manufacturing missed and the PBOC tightened monetary policy, something that may be weighing on Australia's ASX Miners and metals prices too.

A mixed but muted session for US equity markets saw none of the three main indices move by more than 0.1%. The S&P 500 outperformed as the broad index closed 0.1% higher, with the Real Estate sector offsetting losses for Telecoms. The Dow Jones closed  lower by only 6 points as Pharmaceuticals held the top and bottom positions on the index, while the Nasdaq (-0.1%) underperformed its peers.

Crude Oil prices are holding a weekly uptrend, supported by rising lows resistance, despite having traded sideways overnight after yesterday’s decline. Unwelcome US Dollar strength can be attributed to the temporary halting of the rally in both Brent and US crude, however weakness following a Chinese rate hike could help both measures recover to Thursday’s highs for a third challenge of resistance at $57.40 for Brent and $54.30 for US.

Despite continuing to fall overnight after posting a two and a half month high, Gold remains in uptrend. However, an early test of one week rising lows support at $1212 could see a retracement back towards $1200. Dollar strength is the main catalyst for the precious metal’s slide, therefore macro data coming out of the US could be a significant factor for Gold today alongside the fallout for a Chinese rate hike overnight.

In focus today, as is always the drill on the first Friday of the month, is US Non-Farm Payrolls data (1:30pm). The US is expected to have created 175K jobs in January, bouncing back from the disappointment of December where only 156K jobs were created against consensus of 178K.

However, after Wednesday’s ADP Employment data (warm up act?) smashed consensus (246K vs 180K est), might we be in for another upside surprise? The headline Unemployment Rate is expected steady at 4.7%. However, Average Hourly Earnings may prove the most important figure, closely watched by the Fed for signs of inflationary pressures that could push it to hike again.

Elsewhere, a multitude of European PMI Services data releases are expected to show improvement in the core (France, Germany), but a drag from the periphery (Spain, Italy) leaving the Eurozone figure almost unchanged. Eurozone Retail Sales should have rebounded in December, but growth  slowed over the year.

In the afternoon, after the US Jobs report, US PMI Services are forecast to be confirmed improved in January along with ISM Non-Manufacturing (again, individual jobs, orders and  pricing/inflation components may prove more significant) while Factory Goods Orders rebound. All this before the Baker Hughes Rig Count lets us know the situation with US oil drilling activity. Still increasing?

Speakers today include the ECB’s Constancio ("Tackling Europe's non-performing loans crisis: restructuring debt, reviving growth") and Fed’s Evans (current economic conditions at the Prairie State College Economic Breakfast).

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

• Insurer Beazley's FY pretax profit rises 3%
• Ryanair say January load factor up 2%
• Tesco rations iceberg lettuce purchases on supply crunch
• Johnston Press says revenue for 52 – wks to Dec.31 down 6%
• Bank of Ireland sets out resolution plan, could impact capital
• Shell says Sinco station at Deer Park refinery shut jet fuel spill
• Statoil: Gas discovery at the Valemon field in the North Sea – NPD
• Sweden's Skanska Q4 profit, order intake tops forecast
• Electra says Epiris to sell Audiotonix; Electra to get £203m
• Asian stocks tumble most in 2 weeks after China tightens policy
• Gold slips on profit – taking, firm dollar
• London copper falls after China tightening spooks markets
• Oil edges up on threat of U.S. issuing new Iran sanctions