Betfair Official Blog

Back from the slopes and ready to cause more problems for us all

Daily View - 7th April...

We are looking to open higher again today on the FTSE 100 as the effects of the Fed's bail out of Bear Stearns and the lack of any really bad piece of news continues to bolster the Financial Sector. Yes - its come to that.

As mentioned several times last week, the crucial level is just above 6100 and we really need to get here and stay here for the big investment arms to come in with greater determination.

At the moment trading volumes are still quite restrained, and much of the rally (and the previous fall) has been more to do with Market Maker pricing weakness than with genuine conviction. Selling is likely to be quite strong at these levels as we approach more critical points. It is difficult to not to think of the current situation as a sort of 'phoney war' on the economic frontline. It is the fear of what a falling housing market will do to the remainder of the economy that is filling the minds of the Treasury and the BOE at this time. This is not necessarily terrible however for the Equity markets.

On the FX front the Dollar has come in after the weekend with a spring in its step and is pressuring the Yen and Pound once more and managing to hold back the Euro as well.

Commodity prices are still very much on the up and up, and the effect of higher food prices in the poorer parts of the globe cannot be over-estimated. We can expect rising costs in much of what we consider to be the cheap manufacturing areas of the Indian sub-continent and the Far East, as workers look to increase their wages to counteract their reduction in spending power.

Gold has managed to recover the bull run momentum over the past few days with the medium term up-trend having been regained. Dealers will be hoping that this is not a dead cat bounce in a falling market, but the prospects are reasonably good that the fall to $870 has shaken out the weak longs.