Betfair Official Blog

Doomed, we're all doomed

Daily View - 22nd February

Markets are beginning to look a tad grim again as the US and Far East traders do their best to take the shine off the start of the week, and the FTSE is trading some 30 points off in mid-morning activity at around 5900.

The Far Eastern markets have now had seven losing weeks in a row (which must be some kind of record,) and this is difficult for the Europeans to simply ignore. The FTSE 100 having rejected (for the third time this month) the 6000 mark will now have the bears looking for further declines as buyers are obviously hard to come by above that level. We really do need to close above 6050 today to have a chance of disrupting the negative trends. If we close below 5920 and the US fails to put in a good performance in the evening session, the sellers will probably start to sharpen their knives. It is very difficult to cut through this general air of gloom that seems to have settled on analysts and fund managers.

With the price of oil rejecting the 100 buck level yesterday, the question will be asked as to whether the 20th Feb 2008 will become the one day in history that the price of crude managed to close in three figures, or will the never-ending requirement to secure supply push us ever higher?

With so much of our commodity requirements coming from, shall we say, the less amenable parts of the globe, the fear over flow-disruption is unlikely to fade. Our main oil supplies come from places such as Russia, Nigeria and the Middle East, countries which have very little inclination to be particularly friendly with the Western economies. The Far East has always been more accommodating towards the little foibles of the commodity-rich nations, and in an era of reduced availability, the historical friction with the West may well work against us.

In the topsy-turvy world of banking these days Lloyds have come in with reasonable numbers to match Barclay's the other day, and many will be asking how the Alliance & Leicester and Bradford & Bingley (who like Lloyds are very domestically focussed,) have managed to make so many crucial errors in the last year. Analysts (as forecast in yesterday's comment) were quick to take out the knives, almost competing against each other as to who could give the worst share price target.

On the FX front the Pound neatly bounced off the support levels below 1.9400 and we are now almost 300 pips higher at 1.9658-1.9661.