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

UK 100 Index called to open +25pts at 6835, having recovered from another sell-off to 6750 to test 6850 again overnight, with the possibility of a correction over-ridden by support noted at 6750 yesterday. Updated Watch levels: Bullish 6860, Bearish 6730.

Drivers for the positive open include US bourses closing higher thanks to much stronger Jobless Claims data (14yr low) outweighing the raft of mixed earnings results as well as the ECB’s Coeure saying he is confident in QE will be successful thanks to large scale. Note a solid start with after-hour results beat by Amazon (AMZN) and Visa (V) offsetting disappointment by Google (GOOG).

Overnight, Asian bourses taken positive lead from US, with more mixed US corporate results and a less than inspirational Japanese economic data (inflation fell, household consumption shrank post sales tax rise, industrial production rebound underwhelmed) failing to disrupt overall optimism as the country limps out of recession.

Japan’s Nikkei helped by existing stimulus and weaker JPY. In Australia, ASX higher as AUD weakened with Producer Price inflation adding to expectations of an interest rate cut by the RBA, following other central banks recently reacting to low inflation. Chinese shares down again ahead of a manufacturing report.

Overnight data in Europe saw UK GFK Consumer Confidence rebounding more than expected adding to retail sales optimism while German Retail Sales were mixed with a slowdown in monthly growth, but rebound in annual gains supporting recent ECB stimulus to kick-start the Eurozone, and especially after Germany officially fell into deflation yesterday.

In focus today we have UK mortgage approvals which are seen stable but we note the fall in BBA Home Loans on Tuesday. Eurozone Unemployment is expected to remain stubbornly high, supporting ECB QE, along with Consumer Price Inflation dipping in January. In the afternoon, US Q4 GDP growth expected to have slowed, backing up weak Durable Goods and Retail Sales data of late. US Uni of Michigan Confidence reading expected to be confirmed.

Gold is has fallen back to $1260 on the equity market rally, extending its recent declines from near $1300, as investors mull the potential for higher US interest rates along with mixed corporate results. The trendline of 2015 rising support has been breached as well as 2-week lows of $1270. This despite Greek concerns persisting which would normal buoy safe haven demand. Support now at $1250 from mid-month lows.

Oil stable within recent ranges although US Light Crude seen posting a weekly loss, under pressure from recent inventory rise in US (oversupply likely to persist) and stronger USD following the Fed statement. While both down near 6yr lows, both WTI and Brent Crude appear to be holding up after months of decline (famous last words).

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

• UK                          GFK Consumer Confidence         Beat, improved
• Australia              Private Sector Credit                      In-line, stable
• Australia              Producer Price Inflation                 Deteriorated
• Japan                    Housing Starts                                   Miss, Deteriorated
• Japan                    Construction Orders                       Growth slowed
• Germany             Retail Sales                                         Mixed

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

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

• Shanks sees FY results in line with its expectations on an underlying basis
• Vedanta says reviewing opex and capex plans across units
• Weak metal, oil prices hurt Vedanta's third-quarter earnings
• UK financial watchdog says to gather evidence on PPI complaints
• BT agrees pension plan, unveils fibre network upgrade
• Jardine Lloyd Thompson names new CEO of UK employee benefits unit
• Qatar Airways takes 9.99 pct stake in BA-owner IAG
• Fuller Smith & Turner says confident of meeting FY expectations
• Kenmare Resources posts 42 pct rise in FY ore mined