Betfair Official Blog

Fed lets banks off the hook yet again. It'll all end in tears I tell you

Daily View - 12th March...

The FTSE is reacting to the 400 point rally in the Dow last night with another 80 points to the upside as we regain the 5700 level with some ease. Financial institutions are likely to be the biggest gainers as UK banks will be bolstered by the new liquidity available. In fact, if the moves by the US do work, then this should help across the board. Many punters will be shy of getting too enthusiastic as we have seen these rallies too often over the past few months to be anything other than cautious.

On the FX markets, the added Dollar liquidity push had a curious effect in that the greenback actually rallied yesterday afternoon when many would have expected the opposite. There may be a feeling that the Fed may not be as aggressive on the rate-cutting front as they await the effects of this latest wheeze to filter through. This morning though the Dollar is again on the back foot as the Pound goes back above 2.0100 and the Euro probes towards 1.5400 once more. There is building support for the Pound to remain above 2.0000 as yesterday's action briefly tested the level before retracing to the current price. In fact the four hour period between 11-3 yesterday saw an attempt at the top of the range at 2.0215, and at the bottom already mentioned. At the current price of 2.0112-2.0115 we are sitting comfortably

On the commodity front, Gold, yet again, did nothing. An early attempt to break higher had as much luck as the previous day's attempts to break to the down side, and we seem to be magnetically attracted to the $970 level where we open this morning.

On the other hand the problems with consumerable commodities continue with rallies across the board led by Oil (up for the fifth day in a row). Brent is now at 104.96-105.01, down a bit from last night's close but not particularly violent in early action. Yesterday 50 cent ranges came and went on a moment by moment basis, and it was an almost impossible market on which to trade sensibly. Hopefully today will see a little stability return but I am not holding my breath.