Betfair Official Blog

Daily View - 1st February 2008

When the going gets tough the blame game gets going, as the banks line up for a good kicking. From well-heeled, black, shinyish shoes obviously.

You can hardly open a newspaper today without reading some journalistic outpouring railing against the evil conspiracy of global money. Well possibly the Daily Star. But at the moment, unusually, even the banks are turning on themselves. Analysts are fighting with each other to predict ever more bearish forecasts, Treasury Money Market desks are ever more weary of lending to each other and regulators are lining up to add even more red tape and constraints.

As a result, the markets are still acting like headless chickens with yesterday's activity almost taking the prize for the most ridiculous to date. Early action saw the FTSE fall 150 points only for the market to turn around based on...well absolutely nothing at all. It ended the day 40 higher. As the Europeans went home the Americans picked up the baton and pushed prices up again only for Google to give a disappointing trading announcement which caused the Dow futures to fall 180 points in just 8 minutes! Not a day for the faint hearted.

The FTSE is called 30 up this morning at 5910-5911 which is just below a bit of a resistance level at 5920. For all of the bad news around right now, it is wise to remember that the UK is (apparently) still growing. We should only really get worried when the employment numbers start to look grim and just at the moment the opposite is still the case. On this note, today sees the mother of all economic data, the Non Farm Payroll, out of the states at 13.30 this afternoon. This figure has been the most watched number in the economic calendar for a very long time and still just about retains top spot. We are expecting a number of plus 70K and this is in an economy which is rumoured to already be in recession.We can expect a very quiet morning today as dealers flatten out positions in preparation for the chaos that always ensues a major data release.

FX markets are absolutely comatose at the moment and we are trading and re-trading over the same ranges. The pound is pretty much where it has been for the last three days (around 1.9900) with resistance at around 1.9940 to 1.9950 and support at 1.9835 to 1.9850. Sterling/ Yen is also struggling to get above 212.35 and 213.75 but is also finding good buying at anywhere below 210.50. The current price of 211.75-211.83 is pretty much mid range and does not give much help to either the bulls or bears.

Gold is also strangely attracted to the mid 920s and we are sitting at 926.2-926.7 this morning with punters still buying on any weakness. The charts are beginning to tighten up so we can expect a break out quite soon in one direction or the other. Oil is stuck at around current levels with Brent March contract at 92.20-92.25, but the attempt to the downside yesterday was swiftly defeated and this will be giving the bulls some optimism. On the contra argument, we are now coming out of the winter months and demand for the black stuff will abate to some extent.

Simon Denham is COO of London Capital Group.