Betfair Official Blog

Daily View - 18th February

Whilst Blair invaded Iraq & Afghanistan, Brown's opening salvo is invading a bank in Newcastle...

So farewell Northern Rock, and a warm welcome ladies and gentlemen, to www.nr.gov.uk.

The only real option open to Capt'n Darling became his final decision. The Rock can now be wound slowly down (or aggressively if the government wishes it) whilst making substantial sums for the exchequer at the same time, and then sold off after attracting reasonable long-term funding commitments from other banks. The only black spot is the possible legal ramifications from investors but this should be assuaged by paying the closing price on Friday to each and every share holder (it would then be difficult to argue that you had not been paid a fair market price as that was the market price at the time).

This week is the beginning of the bank reporting season and both Barclays and Lloyds have indicated that they will be raising dividends. Note - this is not a 'weak' signal! The banks have other sources of income than 'sub prime' mortgages, and, whilst growth may be difficult to come by for the next year or so, the other areas are doing very well indeed. World growth (not the UK or US) is still very robust and the big players earn a huge slice of total revenue away from these shores.

So much for the gloomy outlook.... today seems to be coming in on the plus side with the FTSE called 35 higher and back above 5800 at 5823-5824. Dealers will be eyeing the corporate news wires all week as big players from the banking, mining, engineering, pharmaceutical and just about every other sector give their annual numbers. Trying to second guess market reaction is becoming quite difficult as economic and company data seems to be read exclusively from a bearish perspective these days. No matter how good a piece of data, some analyst manages to pounce on a tiny negative indicator and leads on that angle of the story.

With the US off today for 'President's Day' we can expect a low volume trading session. This often has one of two effects: the first (the most common) is for the whole day to be boring as hell with small trading ranges and tiny volumes. The second (as happened on the last US holiday back in January,) is that in the low volume environment a small momentum can build into a massive move causing chaos and confusion.

Gold remains supported at 885, 895 and 900 and resisted at 915, 925 and 935. Early action this morning took us up to around the 906 level but selling in Europe has now pushed us back to the closing levels of Friday at 902.5-903.0. With the dollar remaining reasonably solid the pressure for the next move higher (if one comes of course,) will have to come from some other sector.