Betfair Official Blog

Despite turbulence in the USA, the UK economic ship remains sanguine...

Daily View - 25th February

Official numbers last week showed that for all the doom and disaster predicted in the last few months, there is still an economy out there doing well enough to hold its head above water. Unless there is a single earth-shaking event, economic slowdowns do not arrive with the post in the morning; rather it takes an enormous shift in momentum over an entire country's ability to create wealth, before it becomes evident. The natural fiscal direction of most nations is to grow, after all we all work and much of this work is of the cumulative rather than 'moment to moment' variety, hence causing the next unit of labour to be more productive etc.

The huge rally in the US on late Friday night coupled with the Far Eastern response will mean the FTSE called some 75 points higher this morning. Hopes that the markets might be about to quieten down have been disappointed on several occasions recently, and an opening call of 75 points up might be considered an odd moment to talk of it once more. However, whilst the daily trading ranges continue to be quite violent, the actual theoretical closing levels of the index when taking into account ADR activity on the US markets after the 4.30 UK close, has indicated quite a tight range in the past week or so. The quoted 21.00 closing range for last week was covered by just 30 points.

Early calls on the FTSE are at 5960-5961, right back in the groove and giving the bulls something to get their teeth into again. The 6000 level has been a bit of a killer so far this month with strong selling every time we get there, so we will probably attract quite a few sellers if we approach this number. On the basis that the markets will move in the direction that causes the greatest amount of pain to the greatest number of people, for a break above 6000 to become sustainable we will need some solid short position creation.

Gold is being squeezed higher again in Far East action as shorts begin to get squeezed once more. The dollar weakness in the fag end of last week came as something of a blow to the precious metal short sellers and whilst $950 beckons, $1000 is still the target for many. With volatility actually increasing last week in many asset classes, the ride will continue to be erm, exciting, shall we say?