Betfair Official Blog

The party season precluding the reporting season

Daily View - April 8th...

Despite the continuing doom and gloom, the FTSE and other global indices seem to be showing remarkable resilience, with the UK's benchmark finishing above the psychologically all-important 6000 level. With five gains out of the last six sessions, bulls are really testing the sellers at the moment, trying to drag equities out of this bear market in the process. There is still a great deal of negative sentiment within the square mile and it seems the majority believe that this bear market has further to run. The recent rise back to the 6000 level has largely been put down to the absence of really bad news, the beginning of a new quarter, and expectations of an interest rate cut this Thursday. The bearish signs are still there however with the US reporting worse than expected job numbers last week, banks and mortgage lenders in the UK continuing to tighten their belt not to mention record oil prices.

This morning the market has wiped out only half of the gain it made yesterday and whilst this can't be considered as profit taking, it indicates the cautious mood of investors at the moment. Understandably so, since Alcoa kicked off the US reporting season with terrible results, announcing a halving of their Q1 profits.

Despite Alcoa, yesterday was eerily quiet and today things seem to be on a similar footing. Its not often you walk onto the trading floor and you can hear yourself think (yes - us bankers do occasionally think), but the markets are expected to remain quiet until this evening when the Federal Reserve releases the minutes of their last meeting when they cut interest rates by 0.75%. We expect them to focus on the recent weak consumer spending data, the state of the job market and of course, the housing situation.

Sterling continues to tumble against the Euro and the Dollar as every time a piece of housing data is released from the UK, it points to falling prices.

With the Bank of England deciding on rates this Thursday, many are now hoping for a 0.25% cut, rather than having previously expected the next cut to come in May. The market will certainly be disappointed if there isn't any action this time round.

Gold is unchanged this morning around the $922 mark and oil is also flat after a quiet session in Asia overnight. Rather surprisingly, the IMF have let the market know that they are considering selling some of their bullion and who would blame them at these prices! The market has reacted little to the news as it requires board approval and there are still so many willing buyers.