Financial Spread Betting News

IFX profits buoyed by US acquisition

Financial trading and spread betting outfit IFX reported a ten fold increase in first half profit boosted by its recently acquired US FX business and restructuring.

Pre-tax profit rose to £1.9m in the six months ended 30 September from £0.2m a year earlier. Sales for the period rose to £12.8m from £8m in 2004.

The interim dividend has doubled to 0.50p from 0.25p.

The results were driven by a strong performance from the Boston based foreign exchange trading business, IFX Markets, which it bought in December 2004.

"IFX Markets delivered profits comfortably ahead of expectations at time of acquisition," it said.

Capital Spreads Market Commentary

Even with a whole slew of generally positive data out of the US the markets struggled all day to make headway. Consumer confidence, New home Sales and Durable Goods orders (admittedly heavily influenced by Boeing) all came in on the high side and initially traders bought into the news. Unfortunately a few analyst downgrades or 'anxieties' took the shine off the bullish outlook and dealers started to offload longs. This morning shows the Markets pretty much unchanged from last night with the FTSE called at 5478-80 down 10 and the Dax at 5192-94 down 6.

Wall Street is very quiet at 10893-97 so the markets are unlikely to be influenced by the States this morning and with only Revised Q3 GDP and Chicago PMI numbers this afternoon there may be little to drive us one way or the other. Bulls will be optimistic that the fall from the highs has not been precipitous and therefore not emphasising a reversal and Bears will be optimistic that there appears to be no appetite for a concerted attack on the resistence levels at 10965.

Jarvis reports its first numbers since its share restructuring. The shares have not exactly sparkled since the reissue in september and the impression is that holders of the stock do so more from hope than expectation. As a fully paid up member of the 90% club (in fact almost the 99% club) the company cannot really do much worse but the weak structure makes it difficult for major contracts to be tendered for or won. Shares closed at 93.1-93.5.

Currency markets are doing their close impersonation of the old 'whore's draws' syndrome. Conficting signals from the worlds central banks over future interest rate intentions and variable economic data from the various governmental statistical divisions are blowing us one way then the next.

Depending on which number you look at inflation is either about to take off or likely to settle down and depending on which statement from Trichet and Bernanke you believe interest rates will either go much or just a little higher. Mervyn King has been notable by his absense (probably smarting from being the only Govenor of the BOE to have actually lost a rate vote). Cable is flat this morning at 1.7191-94 likewise the Euro at 1.1784-87. Clients are once more short of the pound having briefly been long over the past few days.

Oil remains weak and is now trading at lows for some time. $56.48-56.54 for the January contract is the lowest since July (before Katrina etc etc). As commented ad-nauseam stocks remain high and longs are hunting for some dramatic event to influence prices.

Gold and Silver are sharply lower this morning as more dealers locked in profits overnight. Clients are short having sold at the $500 level in gold. Rolling Gold is now at 93.7-94.3 down $6 overnight.

WorldSpreads plans to float

WorldSpreads -- the Irish financial spread betting company and owner of SportsSpreads -- plans to float on the stock market this time next year. The company, founded by former Dublin bankers Conor Foley and Brian O'Neill, is set to appoint an adviser to guide the company to a listing. It has also recently attracted three high-profile British shareholders of Indian extraction. The best known of these is Alpesh Patel, the former Financial Times columnist and market commentator.

Capital Spreads Market Commentary

It's just as well I was not trading my opinion yesterday as my comment about the FTSE being unlikely to reverse was just about as wrong as you get. The weakness in Oil, the continued worries about Vodafone and the sudden re-emergence of Bank bad debt fears all helped to ease the FTSE back through the hard won 5500 level. The market is likely to open slightly higher this morning as dealers look for a pull back on yesterday's carnage. The FTSE is called at 5478-80 up a couple of pips and the Dax at 5161-63 down 15.

Wall Street kept dealers on their toes as traders worried about whether the high print in the futures would give a double top from earlier this year (the high in March was 10983) and thus possibly signal the start of a pull back. Clients stuck to their shorts and were rewarded with a fall of some 80 points by seven o'clock. The S&P's reverse was even more marked with the market now 11 big points from from highs. Wall Street is quoted at 10911-15 and the S&P at 1259.5-1259.9.

Barclays gave the line that analysts hate to see "earnings will be in line with expectation". The shares awill be sold down this morning on this as equities eternally build in positive bias as to future earnings. The early call is for Barclays to come in some 10 to 15p lower at around 588-589.

The market is also worrying again about Vodafone as future earnings fears continue to percolate into analysts figures. A close below 125.00 would indicate a fall to last years lows of around 113p. Clients are buying at these levels as 125.5 represents a strong support level but stops are close.

Currencies performed one of their regular about faces as the Dollar worried about a slowing in the Fed rate hikes. Cable having puched 90 pips lower in the morning turned round and closed 200 pips higher but the feeling was that the pound was being dragged by the Euro which was bouncing strongly after Trichets earlier rate comments had sent it lower. Central bankers seem to have suddenly found their voices (after years of saying nothing very much) and seem to be once again delighting in sending the markets firstly in one direction and then the other. Cable (GBP/USD) is now at 1.7254-57 and Euro is at 1.1833-36.

Oil as mentioned yesterday looks weak as the feeling that traders have already covered their winter needs starts to wiegh on the market. The recent cold snap (which had such a heavy effect on Gas prices) did almost nothing to oil and in that environment dealers look around and ask 'where are the buyers'? Nymex fell some 175 cents yesterday and is now quoted at 56.93-56.99.

Gold managed to pip $500 this morning and clients having been long since... (cannot remember when but a long time).. Have started to take profits and are now flat to just slightly short. Silver also saw some profit taking from our clients as the front month fell from its highs yesterday as dealers moved December contracts into March (the march contract hit a new peak). Gold is at 498.9-499.5 and Silver at 844-847.

Punters pile into silver, and go a little more bullish on FTSE, OneWayBet

Spread betting traders are sitting on large net long positions in silver, which tore through the $8.00 barrier in the middle of November and has pressed even higher.

Bookmakers such as Capital Spreads and IG Index report that clients are favouring silver, even as gold approaches the $500-a-troy-ounce level.

The silver move is intriguing because this precious metal is prone to occasional, violent reverses - in the spring of 2004 for instance, it fell from $8.40 to $5.50 in little more than a month.

However, on this occasion, punters appear to believe that the only way is up for silver, and the cash price was this afternoon at $8.26.

As far as other spread betting markets are concerned, bookies said that their clients are turning more bullish on the FTSE this week after often getting caught short during the recent upswing.

Capital Spreads said however that its punters have been successful on the Japanese Nikkei, holding net long positions during most of its rise.

IG Index said that punters remain short of the pound against the dollar, apparently looking for sterling to fall from the current $1.72 area to around $1.66.

No thrills yet, but no spills either - and I have my eye on two gems

An apology is almost in order. The promise of thrills and spills has not been met and for the second week running the portfolio moved less than a tenner. I can only plead that it's not deliberate. As promised, more money has gone on the table. I added six names to the portfolio last week and added to the size of three existing positions, so the ingredients for larger moves are there.

Indeed, I'm approaching the maximum number of positions for a speculative portfolio. A stock now has to offer a compelling argument to get in, but two caught my eye last week. The first is Euromoney, one of those consistent performers that get little attention. The heart of its business is specialist financial magazines, admittedly hardly the racy end of the media sector. Seminars and conferences are a fifth of revenues, as are training and information services.

Euromoney is so low-profile that even the Financial Times didn't bother to report its results last week. They were excellent: full-year pre-tax profits of £35.8m were about 10% above analysts' estimates and sent the shares up 8% on the day. Even after that jump, it is possible to imagine them trading 20% higher. Certainly 500p, compared with the current 450p, looks more likely than 400p.

The best growth came from events and training, now its biggest combined earner. Profits from financial publishing were up a more modest 9%. But there is potential for larger gains because advertising by Wall Street investment banks, which have enjoyed a vintage year, is still subdued. The key to Euromoney, though, is its incentive plan for employees below board level. It brought in the scheme a few years ago to encourage managers to focus on profitability. Publishing and conferences offer huge scope for wasting money on everything from travel perks to vanity flagship events. A culture of profits-first would seem to be sensible if not essential.

I'm always surprised that more companies don't offer incentives further down. I suspect many boardroom directors regard performance-based rewards as their personal gravy train rather than tools of management. I've only worked for one firm that operated a scheme and was convinced of its power. It sounds as if Euromoney's directors are also convinced: they're already talking about a successor scheme from 2009. Investing in Euromoney means exposure to the general state of the markets, but it's an interesting way to make the bet. Consider it top of this week's possible buys.

The only other addition to the buy list is CSR. I am suddenly fascinated by this company. The former Cambridge Silicon Radio, operating from the Cambridge Science Park, has run up from 200p at flotation in March last year to 850p and is now valued at £1bn. CSR is the king of bluetooth technology - chips that allow short-range wireless communication. Bluetooth is now the standard application and could almost be said to have brand recognition. Mobile handsets, headsets, PCs and car music systems are the big markets and CSR's customers include some of the biggest names: Motorola, Nokia, Sony Ericsson, Samsung, Toshiba, Renault, BMW and Toyota.

Its success, in the face of competition from the likes of Texas Instruments and Philips, is extraordinary. Its share of the market is a little over 50% and the boom in this technology is demonstrated by the company's progress. From virtually zero operating profits in 2003, it should make $115m (£67m) this year.

I may have come to the CSR story too late, but it appeals to my gambling instinct. The market always has problems valuing fast-growing technology companies and will almost inevitably overdo the optimism at some point. CSR's long-term progress depends on developing technology to succeed bluetooth, but right now it's an intriguing momentum stock emerging on to the radars of mainstream investment houses. Readers thinking about actively trading in the stock market should seek independent financial advice. Spread betting and contracts for difference are complex financial instruments that carry high risks and are not recommended for inexperienced investors. Specifically, their use can lead to an investor losing substantially more than their initial investment.

Capital Spreads Market Commentary

Equity markets squeeze ever higher as bears get slowly pushed into the crusher. If the markets could just manage a spike or a sharp daily move then sellers might have some hope for a pull back but with what amounts to a steady stream of funds being placed into stocks that moment has not yet arrived.

Most traders are now looking to see whether the Americana can actually manage to hit the 11000 level on the Dow and the 1275.0 point in the S&P. Both levels are psycological resistance points which may prove to be too tough to break or (once cleared) the foundation for a new move higher. Wall Street is currently at 10959-63 (tantalisingly close) and the S&P at 1270.5-1270.9.

The Dow closed at its high for.... Ooohhh... quite some time, ditto the S&P and Nikkei and almost ditto for the DAX and FTSE. Only the CAC still has to approach the highs of early October.

The FTSE is up some 20 points this morning at 5546-48 (Rolling Daily) and clients are selling into the rally anticipating some sort of pull back. With no serious numbers out today it looks like this might be a forlorn hope in the short term as the momentum is decidedly with the bulls. There is an equal lack of reporting companies today (a trend that will continue towards Xmas) and this is likely to contribute (oddly) to an inability to buck the trend as longs are perfectly comfortable at the moment. It is only the shorts who have 'itchy bottoms'.

As mentioned before Sterling, whilst enjoying the odd rally, is not having the best time of it as nearly all its competitors look to raise interest rates versus the BOE's desire to probably lower them (if they get the chance). In this adversely widening interest rate difference the joy of earning a higher income in sterling is being slowly eroded. This trend is unlikely to reverse in the short term and clients who briefly took advantage of the small rally last week are once again Short the pound and looking for prices in the mid 1.60's vs the dollar.

As mentioned on Thursday clients were happy to sell the Euro at any level higher than 1.18 and are now cosequently sitting on some 'nice little earners'. A few have started taking some profits as the support at 1.1670 is neared and any indication of a bounce from this level will probably tempt more short covering.

Oil continues to meander between $57.00 and $59.00 but clients are (in general) getting short once more. In conversation the feeling is that if the current cold snap has failed to push the black stuck through resistance the chances are that most of the winter stock has probably been bought already. Nymex at 57.

Silver and Gold reopen today at their highs and Capital Spreads is still looking for some serious profit taking. In Silver a little selling was seen when we broke through $8.00 but this has seen no follow through and clients are still long. Silver is called at 8.26-29 this morning and Gold at 497.3-497.9 is once more up on its highs.

I must put another record on the turntable soon.... The Americans continued the slow grind higher with another 50 point rally, mainly made after the Europeans had decided that enough was enough for the day. The Dow has now rallied over 600 points since the end of October which may make clients wonder as to whether there is anything left for the Christmas rally. Chartists are now looking at the elusive 11000 level as a kind of holy grail. The S&P which hasn't had to suffer the effects of GM's continued implosion has done even better over the period rallying from 1172.0 to 1260.0.

Not surprisingly the FTSE is being called higher once more with 5530-32 looking to be the starting point today. The Dax is also up another 30 points at 5196-98.

Today is another quiet one on the announcement front with nly Michigan Sentiment out of the States and MPC Minutes in the UK.

Anglo Irish Bk have come in with good numbers once more continuing the extraordinary run over the past few years.

Currencies also chose to keep the move yesterday until the Europe had gone home and the Dollar duly gave up some of its recents gains. The catalyst for all the moves was the Fed Reserve Minutes where the impression was given that possibly the Fed would not be as inflationarily hawkish as at first feared under Mr Bernanke. The prospect of an end to the interminable rate hikes led to dollar selling and equity buying.

Cable is now at 1.7244-47 almost 2c from the lows of yesterday. Clients who were long of Sterling yesterday have now turned round and are selling but the momentum for the moment appears to be for the pound and there is a lot of fresh air above the current price which could see a return to the 1.7300 congestion area.

Oil is losing its popularity with our clients in recent weeks as the black stuff appears happy to sit in the $57 to 59 range. The weather forecast for continued cold spells in Europe could put further pressure on the upside but the impression seems to be that winter stores have already been put in place. Clients are mixed at the current prices. January Nymex is at 5878-84.

Metals having reached new highs appear to be wondering what to do with silver trading in a tight range for the past four days since breaking through the $8.00 barrier. The Current price at 8.15-8.18 is prompting some profit taking from our clients who have been long for the entire rally from the $6.80 price of August.

Chinese puzzle for punters as copper prices go crazy

There may only be one person in the world who knows for sure what is happening in the copper market - and even he may not have the full picture.

Prices have been moving up and down like a trampolinist on steroids as rumours about what the Chinese might do next and the size of a huge short position taken out by one of their traders, Liu Qibing, spread like wildfire.

The story is that someone, Mr Qibing according to the market gossip, has placed a big bet on the price of copper falling. Or so the Chinese state media is encouraging us to believe. Instead, the metal's price has been recording new highs almost daily (yesterday it closed at $1.978 per pound).

These bets, called going short, involve institutions agreeing to sell copper at a pre-agreed price on a pre-agreed date. The hope is that the price will fall in the intervening period, meaning you can sell at a price higher than copper is trading at and turn a substantial profit. Unfortunately, prices have risen sharply. This means that whoever placed the bet is facing a substantial loss.

Initially China's State Reserve Bureau, which manages the country's copper reserves, denied the existence of Mr Qibing. It then said he was not an employee before suggesting the trades were on his own account.

Mr Qibing (who at first appeared to be missing, then on leave) works for the Beijing-based State Regulation Centre of Supplies Reserve, which handles trades for the SRB. What is not clear is how big the Chinese short position is - estimates vary from 150,000 tonnes to as much as 600,000 tonnes. A trader from spread betting company IFX group said: "It is not even certain that there is a short position. It is all rumours."

Analysts note recent Chinese comments suggesting they plan to flood the market with copper. They suspect a bluff, and question whether it would be possible to ship the copper to the LME's Asian warehouses by mid-December, when the current LME copper contract expires. Dealers have heeded their advice and have so far called the bluff, chasing the price ever higher.

Analysts at Barclays Capital believe the Chinese short position is not the only one out there in the market and they are not the only group to have been caught out by the rising copper price. All of them will eventually have to crystallise their losses by buying copper to cover their bets. This of course, will force the price even higher.

There is voracious demand for the metal caused by China's breakneck economic growth, and short-term problems with supply. This means prices should continue rising in the short-term at least. Barclays Capital believes it is far too early to short the market. Day-to-day the price has been moving up and down at an alarming rate. Financial Spreads offers a current spread on the December contract of $1.972 to $1.98 per pound.

The smart call for the spread better is to wait for a sharp fall in the copper price prompted by more rumours of copper exports from China (bank on this happening). Buy on the weakness, put a in stop loss to with the spread betting company to limit the downside and sell out when the price rebounds.

The Speculator

Every twist in the market can seem full of meaning if you stare hard enough, but last week had the look of something genuinely different. It was the breadth of the buying that impressed. The FTSE 100 touched a four-year high and the Mid 250 index achieved an all-time record. Japan is almost at a five-year high. In the US, mid-sized firms were also at record levels while the technology-heavy Nasdaq Composite passed its four-year peak. Many smaller markets, among them Greece and Poland, entered new territory.

To my mind, there are plenty of valuations - like Google's surge from $85 at float last year to $400 - that are classic cases of hope triumphing over experience. But this column, an exercise in speculation, can't afford to become too distracted by the big picture. Standing in the way of market momentum can be a quick way to lose money. My time is better spent on questions such as: is the Footsie more likely to rise 5% or fall 5% over the next three months?

That's a question about which way investors will vote, not which way they should. The fact is that markets were offered plenty of reasons to worry in October (Refco, the Federal Reserve's fears about inflation, bird flu) and chose to rally strongly in November. None of the worries proved strong enough to trigger the end of the three-year bull market. I still suspect a crack is overdue, but 2006, rather than 2005, now seems the most likely date. It's time to run with the bulls with a little more enthusiasm.

With spread-betting, the method this column uses, enthusiasm can be measured with precision. The firm I use calculates the amount of capital one needs to support open positions - what is commonly called "margin". During the short life of the portfolio, my figure has generally ranged from £600 to about £1,600 and stood at about £1,150 on Friday. In other words, given that the Guardian handed me £10,000 with which to trade at the outset, I have been punching hugely below weight.

That has been largely deliberate - I saw too many potential demons in the market, particularly during October. What I propose now, if this end-of-year rally looks like holding, is to step up a gear. A margin figure of at least £2,000 is in order. Many will regard that as still erring on the side of caution, but too bad - I am still learning to appreciate the gulf that exists between trading on paper and doing it with real money.

Empire Online, I understand, is the stock sent to torture me on that point. Regular readers may recall that I first mentioned Empire as a possible short a fortnight ago. I didn't believe PartyGaming would follow through on its threat to bid at anything close to the market price, about 115p at the time. I dallied, opening the trade only when the price had dipped below 90p - but still thought it could go below 70p in short order. How could a company with 60 employees and 174,000 regular customers be worth £300m as its optimistic supporters hoped? At that price, each customer would be valued at £1,700. But online poker players, on Empire's own numbers, cost a fraction of that sum to recruit.

This analysis gained ground rapidly and I saw a notional profit of close to £100 within a couple of days of opening my short position at Empire. Then came the unnerving bounce and, as you can see from the table, I jumped ship to take a mere profit of £32.50. It was a horribly weak play, born entirely of a determination not to lose money on a stock that I had analysed correctly.

Naturally, Empire then plunged further to end the week at 63p and it counts as a big opportunity missed for me. I should have made £200 or more from the idea. The only encouragement I take is that, despite the City being over-populated with analysts, situations still arise where the market can still get prices spectacularly and obviously wrong, even when all the facts are supposedly in the open. It will not happen often but I will have more resolve next time.

Empire capped a frustrating week. Vodafone's veiled profits warning was expensive and most of my profits from GlaxoSmithKline disappeared and I felt obliged to get out. The reason for Glaxo's stall is not clear. It may be no more than the sluggish nature of the share prices of its US counterparts. If that turns out to be the case, I would happily buy Glaxo again if the price drifts much lower.

Many names in the list of potential buys are repeats from last week. Additions from within the FTSE 100 include Antofagasta, National Grid, InterContinental Hotels, Barclays and Royal SunAlliance. The latter two I see as "geared financials" in the jargon; they should enjoy rising markets.

The rest of the list, with a couple of exceptions, concentrates on cash-generative businesses with an industrial bias. They have been the drivers of the bull market so far; if I'm betting on an end-of-year rally, they are the obvious place to start. I'm not giving up entirely on shorting, but the list is smaller, as would be the size of the bets.

Capital Spreads Market Commentary

The American markets closed on the up on Friday but without setting the world alight. The Dow and the S&P both closed above 'resistance' levels but, as mentioned, there was no real push on in late trade. The rally will help European Equities to open higher this morning with the FTSE called well through the 5500 level at 5510-12. Although the technicals all appear good clients are not so sanguine and Capital have taken quite a few shorts in the early moments of trading.

The Christmas rally looks to be well on track but as the saying goes 'there's many a slip 'twixt cup and lip'.

With very little on the horizon today it could be a dismal trading day. No major corporate results and no significant economic numbers mean that we expect one of the quietest full trading days of the year.

For those with any interest Thus (THUS) report their latest losses (yawn) and one is forced to ask oneself just how long CAN a company continue to make no money. December Thus is quoted at 14.5-14.9.

Currencies have caught the slow malaise as well today with Sterling Euro and Yen unchanged over the weekend. I notice that after sterling has fallen 26 cents from its highs a lot of the weekend press mentioned that analysts are now calling for further falls. Wow (!!) where were they for the last eleven months. Our clients have now taken their profits on the downside and have put in a few small longs on the pound ppossibly hoping for a small pull back. Although slightly long it is noticable that on any weakness bears are quick to reset positions. Cable is at 1.7190-93 and the Euro is 1.1776-1.1779 both up about 10 pips.

Metals and Energy are on the up again this morning having paused for breath on Friday. In the metals market there appears to be rather a lot of quasey government comment from both Russia and China. One saying that it is buying Gold and the other saying it has lots of copper so why is the price so high.

Cynics might speculate that on the one hand Russia is a major producer of the first and on the other China is rumoured to have a disastrous short in the second. Far be it from me to comment. The recent cold snap in Europe has pushed energy prices up and, after the price effect of Katrina, we are likely to be in for a long winter of long range weather forecast watchers. Gold is at 487.1-487.7 up 1.8, Copper closed at 1.9765-1.9795 (another high) and Nymex is opening this morning up 65 cents at 57.72-78.

Clients long of the Dow were left cursing GM and Altria as the index underperformed the S&P by some 60 to 70 points. Goldman Sachs advised a downgrade on Altria (owners of Phillip Morris cigarette unit) on the back of a renewed law suit concentrating on 'light' or low tar cigarettes which gave pause to stock holders as the impression was that possibly the tobbacco industry was on to a loser this time.

In general Markets are once again on the up with the Nikkei putting on a new (recent) high overnight and the S&P adding 10 points. The FTSE is called up 25 points today at 5484-86 and the Dax up 40 at 5137-39.

Virtually no corporate info today and not much official data either so the market is likely to drift in the same direction as yesterday. It is November option expiry day today so there may be a little bit of excitement around 10 to 10.30.

Clients are now very long of Cable hoping for a pull back in Sterling fortunes versus the dollar. They may have a long wait. The pound is now having a little look at the lows of Wednesday and a break below 1.7150 could easily accelerate into a push into the 1.70's. The Euro is matching the sterling weakness pip for pip this morning but is still well above Wednesday lows of 1.1640. Cable is now at 1.7154-57 and the Euro at 1.1722-25.

The story of the week continues to be precious metals. Silver put on another 10c yesterday and Gold piled higher to record 4.86. Oddly enough Platinum actually gave up a little on the day as stocks were not considered to be quite as weak. Copper struggled to make new highs as the rumour of some Chinese troubles over a rogue dealer are now in the market and dealers took the age old decision to buy the rumour sel the fact. Gold is currently at 486.9-487.5 Silver at 8.09-12 and Platinum at 980.5-983.5.

Markets have thrown off the pessimism and inactivity of the past few days and are looking to put in a good day. The American markets failed to do anything very much last night and traded in a very tight range for the whole evening but closing on a slightly positive note in the last half hour. This morning sees the markets up a little again but probably in response to Europe and the Far East rather than on US conviction. Wall street is quoted at 10703-07 up 30.

The FTSE has come in like a train (much to the relief of our clients who calmly sat through yesterday's fallout and even bought a bit more on the way down) the early call for a rally of some 10 points was ignored completely and the index opened up 30 and quickly moved to up 40. The market is now stalled at 5466-68 and will probably wait to see if the Dow and S&P can put in a good performance before trying to push higher.

The Nikkei hit a new (recent) high overnight and clients are still sitting there long of the index and feeling quite smug (I should think). It looks like most dealers are waiting for somewhere nearer to 15000 before taking profits. December Nikkei is now at 14410-30.

Saint-Gobain finally upped their bid for BPB and this is looking to be the knock out blow. At 775p the numbers look pricey and as BPB are the No1 in the sector the result will probably be increased prices to the consumer.

Copper continues to rally as the problems over the rogue chinese trader compound the current shortage to push prices to record levels. The upshot of this (and the rally in other metal prices) is to push mining stocks higher once more> Clients are starting to get dizzy from the continued churning in the mining sector but after suffering (along with every one else) in early october they are now feeling a lot happier holding the stock. BHP Billiton is at 860.1-861.9 up 23 today, Antofagasta and Anglo up 39p and Rio up 52. Rio is now up 55% on the year (plus dividends as well) and is still at just 11 estimated p/e, which puts any investor in a sanguine frame of mind.

With the BOE taking the tiny dip in inflation as an opportunity to talk about rate cuts (surely a little premature) Sterling which had been meandering about all morning took one look and said 'no thanks' and smashed the pound down 2c into the 1.71's. Short Sterling futures did an abrupt about face and rallied some 15 points in the Sep '06 contract to 95.41 which is now discounting no rate move for the next year at least. Currency dealers have taken a look at Sterling and decided they would rather have their funds elsewhere.

Copper, Silver, Gold and Platinum are all trading at either their all time highs or their highs for some 20 years. Normanlly Capital Spreads finds clients selling into rallies this strong but in the main the net client positions have been long (especially in Silver). With silver at 7.98-8.01 we are now waiting to see whether it can push significantly through the psychological $8 barrier.

Traders caught short of copper, but look for gold to soar, OneWayBet

Spread betting punters doubt that the stock market is going to enjoy its traditional end-of-year rally, and many have positioned themselves for a downward move.

Finspreads said that its clients active in stock indices are mostly short of the Dow Jones Industrial Average and the S%P500 index, and to a lesser extent, the FTSE100.

IG Index reported a subtly different view among its clients. Its punters seem to believe that the stock market is about to break out of the recent range but are unsure whether the move will be up or down.

This view has led people to go long of "strangles" - buying both call and put options on the stock market.

Bookmakers said punters are approaching the end of the year bullish of gold, which today rose by some $10 to $478.50.

If that trade has gone well recently, one that has not is copper, where many traders have been holding short positions as the metal has surged towards 4400, up 10% from mid-September levels.

On foreign exchanges, traders are split on whether the dollar can continue its recent strong run against the euro and the pound.

Sterling has fallen from 1.77 against the dollar, to 1.72, so far in November, while the euro has slipped from 1.20 to 1.1675.

Capital Spreads Market Commentary

Wall Street made an attempt to break to the upside...then a fast reversal to try to push us down before giving up the ghost and closing pretty much unchanged. Bernancke 'did a Greenspan' firstly talking the market in one direction before talking it back in the other. Talk of inflation targets does not go down well with Rate Doves and Equity markets who dislike the restrictions that this places on the central bank which explained the sharp reversal at six yesterday. The Dow is now called at 10698-10702 up 15. The FTSE is called unchanged this morning and clients are buying this morning looking for a pull back after the Vodafone induced fall of yesterday. FTSE is early called at 5434-36 off a couple of pips.

Sainsbury has come in with higher sales but flat profits due to one off costs and expenses. The knee jerk reaction will be to call the shares lower this morning, maybe as low as 285 or 286. Clients are long from lower levels and do not look like taking profits. Buyers are showing early with bids at levels lower then those mentioned (on the hope of an even lower first call).

Sterling finally (but only just) closed below the 1.7370 level at 1.7363. Clients have been looking for a close below this point to set up shorts but have been put of by the marginal level of the break. Another weak day will bring the bears out again but for now we are seeing two way trade at all levels. Cable is currently at 1.7350-53. The Euro had another pot at the downside yesterday but by the close was looking perkier. Dealers were buyers at around the 1.1660 area which was the previous days low and have now taken profits and as with the Sterling/Dollar are now flat with two way business.

Oil is now at the lows for some 3 months as the market gave up a $1 rally yesterday to eventually close on the lows at 56.86. There is minor support at this price which may give suffering bulls some hope but on a break of this price the next level is some $4 lower which could be hit on another strong inventories number (out today at 15.00). Current price is 56.84-90.

A very quiet day in the states yesterday as Veterans day Holiday on Friday seemed to stretch into Monday. The markets closed at their highs but have promptly given it all up again this morning to be trading at 10685-89 in the Dow (just below 10700 once more) and at 1232.1-1232.5 in the S&P which is now looking a tad heavy having drifted yesterday and widened versus the Dow 30.

The FTSE is being called down 5 but our clients are busy selling as the feeling is that the open may be weaker than expected. FTSE called at 5462-64.

Vodafone profitability was lower on one off charges and net revenue seems to be flattening out. The company appears to be struggling to add significant new income streams and clients are wary of being long the stock. The call is at 145.00-145.25 pretty much where it has been all year.

Currencies are likewise dead as a dod this morning with Sterling Euro and Yen unchanged from last night. The Euro continues to probe the downside and we will need some significant data turnaround to change the current momentum. Euro is now at 1.1694-97. The Yen is also struggling with a new 17 month low versus the US dollar and is now at 118.82 which puts us bang in the middle of the congestion area of 2002 to 2003. There is the possibility of a pull back to the 116 support area but the chances are that dealers will look towards 120.80 as the top of the current move.

Sterling (although weak versus the dollar) is showing commendable strength versus the Euro and Yen. Clients are flat at the moment with the currency trading bang on support at 1.7370 against the dollar having failed once again to close below it yesterday. A break and close below here would be negative and we have large orders to sell on a close below 1.7370.

UK Economic Insight by Capital Spreads, Simon Denham

For many years now Bank Analysts and Financial broadsheet commentators have been silent over the 'New Labour' financial mismanagement of the economy. Nobody wanted to listen to them anyway and with the party in power having almost no opposition the 'political' move was always to bury bad news with silence. There was always the knowledge that harping on about Gordon Brown's bleeding of the private sector in favor of the 'non-productive' (but self serving) public sector would have meant reduced access to government contracts and patronage or (in the case of the newspapers) political contacts.

But now, suddenly, a crack has appeared in the Government's power base and economists and columnists are beginning to emerge into the daylight waving the dire facts about the UK economy. Much as the Government might dislike it and, by default, their proxy rottweiler the FSA try to damage it, the fact remains that without the earning power of the small bit of the country called 'the city' the UK public finances would be truly up s**t creek. The size of the public deficit is becoming larger and larger with apparently nobody able to rein it in. One of the underlying major problems is the fact that the average politician does not rate his success as a measure of whether he has done well but by whether he or she got re-elected and because of this the people of Britain will be paying for the last eight years of government profligacy for the rest of their lives. There has not been a single economically 'difficult' decision made by this government in eight long years......... just one never-ending sweeping under the carpet of financial problems that they hope will only appear long after Mr Blair and Brown are mere disastrous footnotes in the political and economic history of this country.

Whilst the rest of the UK has experienced productivity increases in line with the rest of the world the public sector has not only not improved but actually lost productivity by almost every measure that can be made. The NHS for all the resources spent on it has actually managed the almost unbelievable achievement of recording a fall in productivity of some 10% over the period of this government whilst the private sector, over the same period, has gone up by some 28%. Not only this but the complete failure by government to get its workforce to perform at anything like the levels of its counterparts in the rest of the economy has been, far from punished, actually rewarded by continued wage rises (every single year) well above inflation and well above those awarded in the private sector. We now have the situation that a worker in the public sector has a take home pay well above the national average, has virtual job security for life AND has a final salary pension for which they will have contributed not one penny.

With public sector jobs in the Labour heartlands of the North East (from where most of the Cabinet harks) now totalling some 60% of the total workforce any attempt to alter this state of affairs would cause widespread civil disruption and more importantly damage the re-election chances of the people most in the hearts and minds of the lawmakers in charge of the job (i.e themselves).

The only advice this commentator can suggest to the long suffering taxpayers is 'make your pile' and then shift it out to a tax free haven. For those of you not blessed with a Government (taxpayer) funded feather bed in your retirement .. good luck .. you are going to need it!

Wall Street's late rally on Friday has not helped the FTSE this morning as dealers worry about the 5500 resistance level and are leaving it to others to push us through. The Dow is now back at the top of the trading range (10750) but failed to break through to a new level on Friday. The high and the closing level merely served to re-emphasize the resistance that awaits above the market firstly at 10700 and then at 10750. The S&P is also struggling to push higher and is actually further from the top of the range (which is at 1250) having stalled at the more recent high of early October at 1235.0. European markets are unlikely to move higher until the US gives the signal.

The FTSE this morning is down some 10 points at 5454-56 and the Dax likewise down at 5083-85.

There are no US figures today which should help the recent trend to continue giving Bulls the hope for now. But in the UK we have Inflation numbers which although expected to be better than the recent numbers are not forecast to show much of a slowdown. PPI input is forecast at +7.2% YOY.

Vodafone is under increasing pressure from rivals and with the new internet telephone technology hinting at more competition still clients are not rushing to buy the stock. The shares have been stuck in the 135-155 range for the whole year and are now pretty much at the same price as on the 1st January. With a Dividend Yield below 3% long term investors are beginning to wonder if there are better places for their money. The shares are currently trading at 145.75-146.00.

Sterling is putting on one of its better starts to the week rallying 60 pips this morning to 1.7487-90. The support at 1.7375 has held once more and weak shorts are being squeezed out. On recent history we may see a relief rally to around the 1.7700 region before another attempt to the down side. The Euro is also having a better morning but is still well below the 1.1875 support (now resistance) level. The solid day on Friday with trading stuck at the 1.1700 level for most of the day before coming in with a late rally may give dealers hope for a better time this week especially as the main numbers from the states are expected to be some more benign inflation numbers. The Euro is currently at 1.1761-64 and finding buyers amongst our clients.

And finally commodities. With the dollar showing slight weakness Gold and Silver made the most of it and are once more pushing back to the highs. With much press speculation about a re-rating of precious metal values (to the upside) punters are buying heavily. Oil is struggling as stocks continue to prove to be sufficient for current refinery demands. Oil at 5770-78 is up 30 over the weekend but on little volume.

Punters hit a purple patch by backing the greenback

Since August 2005 investors have been reaping profits from a number of financial markets.

Gold, oil and equities have all proved happy hunting grounds but the most successful of all has been foreign exchange, particularly for those who have taken a bullish view on the prospects of the greenback.

The US dollar had been under a cloud due to low interest rates and President Bush's spendthrift ways, which have seen the country run up a truly gargantuan budget deficit.

That has all changed, however. US interest rates have been marching north at a pace and are likely to continue rising. What is more, John Snow from the US Treasury Department has served notice that the deficit must be cut.

This will not make many Republicans in vulnerable seats happy in the run-up to the mid-term elections as they face up to a rebellious electorate stung by spending cuts, but it is economically essential. Both these factors have contributed to the dollar's resurgence on the international currency markets.

Spread betting company Cantor Index says its clients have enjoyed a purple patch through playing the forex markets. David Buik says: "Spread betters in foreign exchange have had an excellent three months in selling the pound against the dollar at $1.85 in early September, taking profits in early October and going back in again to do the same trade at around $1.79 at the end of October. Today the pound stands at $1.7445.

"There has been a similar pattern in eurodollar, down from $1.26 in early September to $1.175 today. The yen has also been a loser against the greenback during the same period, falling from 109 yen to the dollar to 118 yen."

Can this continue? No financial product ever heads in the same direction for an indefinite period of time and this means that people playing the dollar on the currency markets need to exercise a degree of caution.

If you bet on the dollar rising, be sure to take profits and set a "stop loss" on any spread bet struck to make sure that your downside is limited if the market moves against you.

The real X factor in this market is that the US will have a new chairman of the Federal Reserve in February, which could alter the market's sentiment.

Alan Greenspan's stewardship of the US economy has been widely praised but the new man may have his own ideas on how things should be done.

It also pays to remember that when Greenspan was appointed in 1987, both the dollar and equities were sold off by investors with considerable aggression. Still, uncertainty is the spread better's best friend.

Mr Buik said: "Some punters are considering reversing the current trends within the next couple of weeks - and it is worth watching the situation closely."

With growth in Europe limited, it may still pay to bet long on the dollar against the euro, however.

The current spreads offered by Cantor are: December contract $/£ - $1.7451-1.7463. December contract €/$ - 1.1760-1.1768. December contract $/Y - Y117.50-117.59.

Capital Spreads Market Commentary

Finally! The American markets seem to be taking heart from recent numbers which suggest subdued inflation with continued growth (the equity markets dream scenario). The only fly in the ointment has been the general comments from the various companies who are in the main suggesting that, although the results this time are v good, they expect the next year to be tougher. The near 100 point rally in the Dow will drag up the FTSE and the Dax tis morning with the FTSE called 40 points higher at 5462-64 (much to the combined Joy of our clients who are massively long of the index) and the Dax at 5074-76 up some 60(!) points.

The FTSE would be a little higher but the oil company stocks are not likely to move in line with the rest of the index and will hold it back to a certain extent.

The well loved (by new fathers) makers of scalextric model car racing games, Hornby, report today that 1st half profits dipped slightly to £1.74M (from £1.77M). The shares fell some 18p yesterday to 223p and may open slightly lower again today but at P/E of 14 look fair value.

The Dollar hit new 2 year highs against the Euro and as stated previously there is not much support until 1.14 (and even that is an old resistance level rather than support). The next major level to the downside is at 1.1100 which will be the target for the longer term players. Cable is struggling to stay up against the continued Euro selling but with dealers buying at levels below 1.74 bears are keeping out waiting for a break AND CLOSE below 1.7375.

Clients are still very short of Oil (obviously reading these comments) and the price continues to drift lower. Dealers are moving their buy stops down to around the 57.88 level.

Todays Number's - US

13.30 Trade Balance (September) -$59.0bn (-$60.0bn) 13.30 Export Prices (October) +0.9% 13.30 Import Prices (YOY)+2.3% (MOM)+0.3% 13.30 Initial Jobless Claims (w/e 5th November) 323,000

14.45 Michigan Sentiment (November Prelim) 74.2 (+76.3) 19.00 Treasury Budget (October) -$57.3bn UK 12.00 BoE/MPC Interest Rate Announcement.

The UK Markets attempted to rally this morning on the off but have run into profit taking as dealers start to worry about the lack of follow through after the rally of last week. Punters are eying the 5500 level in the FTSE 100 that failed to be broken back in September (prompting the brief sell off). If we continue to hover at the current levels in the mid 5400's dealers will begin to fear the worse and with (whisper it quietly) the Christmas period looming on the horizon volumes are likely to start to drift. Current FTSE is at 5440-42 having opened up at 5466-68. The BOE is expected to do nothing at 12 today as weak growth continues to act as a reflection of inflationary pressures.

The US markets also flattered to deceive yesterday with a very brief push above 10600 in the Dow. Unfortunately, this time, the air proved a little thin up there and with a rather pathetic 'last' gasp the rest of the trading session was a general drift back to the closing levels of Tuesday the quote this morning is at 10543-47 for the Rolling Wall Street contract. The S&P matched the Dow's price action but the daily momentum indicators are still (just) positive which is giving the Bulls some comfort. There are a whole swathe of US figures this afternoon which will, hopefully, give us a bit of a push one way or the other.

Currencies are, likewise, very quiet today as the Dollar gives up some of it recent gains. Sterling although trading intraday well below the supports at 1.7370 never actual managed to close below that level. Although the trend is definitely Dollar positive the inability to convincingly batter down all the supports vs the majors has given traders an opportunity of profiting from a small relief rally in the Euro, Yen, Swissy and Sterling. Cable is now at 1.7466-69 and looking trenless this morning.

As mentioned yesterday the precious metals inability to push lower on dollar strenth was followed by a strong rally on the back of minor dollar weakness. Gold is back up at $467 and punters are long and looking for more. As expected Oil weakened again yesteday and is looking fragile this morning.

Oil is now 18% off its highs of Katrina and much of the buying at these prices is forward cost control from companies looking to hedge against a repeat of this summer of the next few years. December Nymex at 5860-68 is off 30c overnight.

A quiet opening this morning with little activity from clients or the markets. With the US markets going nowhere the chances of Europe breaking out today look small. November is ususally associated with bull markets and the recent (overall) moves have continued to back this trend. Although this morning on its own merits is not looking strong. Private equity funds are flush with cash as years of low investment opportunities have built up the pot and the recent splurge of M&A activity has been the result of a sudden change in focus.

The Dow is slightly higher this morning with the Rolling Wall Street at 10551-55 up 15 and Europe unchanged(ish) with the FTSE at 5466-68 and the DAX at 5020-22. Clients are coming in on the short side today looking for a quick in and out on the open.

M&S continues to amaze with the shares putting on a further 5p (1.2%) this morning. Stuart Rose appears to be making all the right moves at the moment and, presumably using his old BHS sourcing contacts in the Far East, has now trimmed the cost of his product closer to industry norms. All the PR is running his way as well and these things tend to feed off themselves with shoppers are often attracted to stores that generate good news. M&S rolling bet at 439.0-440.2.

After all the excitement of the last three trading days in the currency markets dealers are sitting on their hands waiting to see whether the momentum for the dollar will continue into the future. The dollar has now broken into new ground and clients are active but very mixed with the buyers almost exactly matching the sellers. Our overall currency exposure the lowest that I can remember although conversely we have a record number of open positions(!). There is now minor support for the Euro at the 1.17 area (built up yesterday) and of course to the upside there is the old support now turned resistance at 1.1875 to 1.1900.

The markets grind ever higher as the good news outwieghs the bad. Dealers have shrugged off the actual state of the UK economy to concentrate on the Worldwide trading conditions. With a hefty slice of corporate profitability coming from abroad the woes at home can be, for the moment, ignored. The Dow moved slowly and almost painfully higher yesterday closing at the highs since early october with the Bulls although not out in force at least prowling around the edges. The FTSE is called some 10 higher at 5468-5470 likewise the Dax at 5034-5036.

Corporate news is again thin on the on the ground but M&S has come out of the blocks with a nice little surge in profits. The gains appear to be more a reflection of much better stock control and various cost reductions rather than a major increase in sales. This probably reflects the poor management before Stuart Rose joined the company and the jury is still out as to whether Marks can move their new profitability into increased market share. Clients have come out this morning with their selling boots on. Rolling Bet at 431.8-433.7.

Cable and Wireless as expected have disappointed on earnings with revenue down over 50% to £92m from £207m. The news was actually slightly better than feared and the shares having initially surged 7% this morning are now settling to up 3% at 121.1-121.8.

The excitement was all in the currencies with the last of the majors sucumbing to the surge in the dollar. Cable has finally broken through 1.74 and the Swiss through 1.3090. Clients are mainly sitting happily on dollar longs and watching to see how far it goes. The next (minor) support in the Euro is way down at 1.1450 in Cable is in the 1.68's. Cable is currently at 1.7362-65 and the Euro at 1.1725-28.

Metals are mixed with gold slipping, platinum stable and silver climbing. With the dollar on the rampage we would normally see a more dramatic reaction from the precious commodity markets and dealers are eyeing the apparent 'relative' strength with interest. Oil tested the support at 58.70 but without much conviction and rallied towards the close to finish down just $1 on the day. The trading range in Nymex Crude is tightening by the day and a breakout and close through $62 or $58 will be needed to tempt the trend traders back in.

Monday morning once again and markets seem to have little appetite for movement. The Dollar finally broke through the 1.19 support vs the Euro on Friday after innumerable minor tests. The dollar has now breached resistance levels against the Euro and Yen and now the focus moves to the Swissy whose resistance, 1.3080 to 1.3090, is being tested as I write and Sterling and should an attempt be made it would be a brave man who bet on the Pound forcing a reversal of the trend.

Wall Street mainly ignored the Non Farm Payrolls on Friday as the markets concentrated on the currencies. Overall the figures towards the end of last week showed continued robust strength in the US economy with (aside from energy costs) a possible slakening of inflationary pressure. The US equity markets are now looking for the Feds longer term policy activity and the possibilty that just maybe after two (maybe three) more rate hikes that may be the end of the tightening phase. With momentum turning positive there is now a better than even chance of a rally in the equity markets moving towards christmas but as we are now stuck right in th middle of the US trading range that has been in place for most of the year investors may stay clear until a confirmed breach of 10750 in the Dow and/or 1250.0 in the S&P.

Wall Street is quoted at 10523-27 down 5 over the week end and clients are getting longer this morning. The FTSE was being called down all morning but clients were having none of it and bought steadily in pre-market activity. FTSE now called at 5430-32 up 7.

Ryanair has reported record profits for the third quarter and dealers are looking for a nice bullish/consolidation outlook at current levels. The company is now the third biggest in the world (by capitalisation) which in such a cut-throat and crowded market must make them one of the greatest success stories of the past decade or so. They have not invented anything 'new' or made some startling innovation they have just proceeded to do what they do much better than everyone else.

As mentiones the Euro support levels have been broken and the currency still looks a bit weak as dealer continue to sell pushing the currency through 1.1800 down to 1.1791-94 and Sterling likewise down at 1.7457-60 ( still amazingly above support at 1.7400).

Commodities had a poor week and look to be fragile again today with Gold,Oil and Softs being (in the main) called lower this morning. The December Nymex contract is recording a series of lower highs and the volume and momentum indicators are beginnig to turn bearish. As the hurricane season draws to a close the potential for weather related moves is falling and now only overall supply (which looks solid at the moment) and political risk remain to bolster the bulls. Oil is at 60.06-12 down 44 this morning.

The Dow traded for most of yesterday at the higher end of the trading range without ever seriously attempting to break out through the resistance level at 10500. Short term traders were generally short and caught in both the Dow and the S&P but the market never managed to go for the jugular and force them out. Wall Street is unchanged this morning and is quoted at 10472-76 which is likely to lead to a quiet opening period. The FTSE is quoted up 10 this morning at 5364-70 and Dax is called at 4974-80 up 24.

The DAX, as befits a heavily tech index with only 30 stocks, has become increasingly volatile in recent months with 70 to 90 point daily ranges becoming quite common. Normally volatile periods give dealers an indication that the markets are due for a desisive breakout one way or the other but after all the shouting the Index is presicely where it was three months ago. The FTSE has also caught a slight case of this effect and since the slow grind up of early summer has found it difficult to decide what it wants to do. At the moment the Bulls have the ball and if the FTSE can manage to close above 5385 we could well see a return to the highs again.

There is very little corporate action this morning with ICI, Carphone Warehouse and Shire Pharma issuing third quarter/first half numbers. ICI and Carphone are expected to show decent increases in revenue with ICI expecting growth of 7% and Carphone's (which were previewed in Oct) expected up 35% unless the re is some surprise the shares are unlikely to move much this morning. Shire on the other hand is likely to come in with poor numbers which could set the shares moving. The Shares are occilating between 625 and 700 and have been virtually an exact match to the overall FTSE movements of recent months. Early call is for 681-683 on the open.

Currency markets are not terribly exciting this morning with the only real mover being Sterling which in early trade is a little weak. Cable at 1.7735-38 is off 30 from the close last night. With Non Farm Payrolls tommorrow most dealers will be looking to exit positions by the close tonite and we could see most of the action this afternoon as the US comes in.

Oil inventories were better than expected and Oil traders read the figures every which way they could with an initial sell off quickly reversing to trade up at 60.40 and then another sell off to 58.60 being reversed in late trade for the market to eventually close unchanged(ish) at 59.73.

Precious metals had a small bounce from the recent sell off but Bears are scenting some weak longs and pressure for further falls could resurface if the Dollar reverses it's weakness of yesterday.

So the markets had a 'Dell' moment. With our clients heavily short of both the Dow and the S&P at 8.59 last night there was a collective sigh of relief when the figures from those friendly PC people came out. A one hundred point retracement in two minutes is quite unusual these days!

The Dow is called at 10421-25 still 20 down from yesterdays cash close but 30 up from the futures settlement. Understandably the FTSE and DAX are called lower this morning with the FTSE at 5302-04 down 15 and the DAX at 4908-10 down 20. Clients are in buying again this morning reckoning on a follow through from yesterdays rally.

The takeover stories from yesterday although interesting from the immediate effect are all pretty much done deals. P&O (PO/), O2 (OOM) and Pilkington (PILK) bids are likely to go through on the 'nod' as the projected bid levels do not look like being topped.

BAA (a stock that many analysts watch as good indicator of the economy) reported this morning that operating profit grew by 9.5% but this was held back by investment property losses. The net revenue at £257M was just shy of expectations but client are likely to buy due to the one off nature of the charges.

Matalan the cheap and cheerful retailer is dicovering that times are tough. With Primart showing that retailers can be cheap and fashionable (rather than just cheap) the company is going to struggle in the niche that it has filled. The shares have been sold all year to the current levels and on a projected P/E of 12 do not look especially good value. But at least the company is still operating profitably which may be considered a success versus the competition. Clients are short and continue to look unfavorably on the stock. The quote at 162.5-163.2 (december) may find a few buyers this morning.

Imperial Tobbacco are likely to come in higher this morning as profits rose 28% on greater sales in Europe (of all places). The shares closed at 1620.0.

Currencies are completely unchanged this morning as the Fed rate decision looms this evening. A hike of 0.25% is assured but still dealers like the certainty before risking their 'hard earned'. Do not expect much action today in any of the majors.

Oil finally closed below $60 but has been unable to push on down. Clients who have been short from the $62 are taking a few profits but the majority are looking for a further break into the mid 50's now that the psycological 60 has been breached. Silver had 'one of those days', falling 24c as the medium up trend was breached first at 7.78 and then at 7.66. Gold was also a sufferer as the Dollar rallied giving hope for metal bears. Golds upward supports are still in place and clients are looking for a bounce back in the markets today. Gold at 465.8-466.5 Silver at 7.57-7.60.

Punters go short of Dow on rally, and long of dollar

Spread betting traders have been trying to oppose today's strong up-move in the major stock markets, with the Dow a particular focus for the bears.

This stance by punters appears to reflect a view that today's surge of nearly 100 points in the FTSE is mainly due to merger and acquisition activity and therefore may not last.

Bookmakers said that their clients had been long of the FTSE from around the 5150 level last week, but when the strength of today's rally became obvious, traders either decided to take profits on longs, or to open outright short positons.

Finspreads said that its clients were short the Dow and the S&P, in particular, this afternoon. They were long of the Nasdaq however.

On individual shares, Finspreads said that punters had been net long of mobile phone firm O2 for many days ahead of this morning's announcement of a takeover by Telefonica of Spain.

IG Index reported client buying of the dollar against both the euro and the yen, while Finspreads said that short-term players were long of the dollar against sterling.

Another active area has been commodities, with IG Index reporting a strong flow of up-bets on palladium and sugar.

Palladium is benefiting from speculation that makers of catalytic converters might start switching to this metal from platinum, and it has risen from $195 to $235 over recent weeks.

Sugar has risen in value by more than 30% on the number 11 contract since May last year, on speculation that the high oil price might prompt refineries to convert ethanol derived from sugar into motor fuel.

Capital Spreads Market Commentary

With 70% of reported S&P stock coming in at the higher end of expectations, notwithstanding the good day on Friday, the markets would be expected to be hitting new highs. The problem is that along with the good numbers corporate statements are indicating that the next quarter is going to be less good.

All equity markets build in the expectation of a never ending supply of company growth in line with recent historical performance (which is why Google is rated so highly). The fear that this may not happen causes more disquiet than the actual results.

Wall street as mentioned closed up 170 points at the 10400 level which is where it is quoted this morning. The european markets are being called significantly higher in response with the FTSE at 5256-58 up 43 and the Dax at 4880-82 up 55(!!). Clients are long both these indices and have been buyers in pre-market trading.

Glaxo (GSK) who accidently revealed portions of it third qtr earnings are said to be up some 17%. The shares gained 36p on Friday and are likely to be higher again this morning. Early calls are at the £15 level up another 27p.

P&O (PO/) has reported a potential bid from the Far East shares rallied on Friday by 2% to 310 but are likely to put on much more this morning (most takovers require a premium of at least 30% to win over investors).

Currencies are quiet today with little new rate information to push us around. The US GDP data on Friday gave a boost to the dollar as 3.8% was definitely a surprise giving greater backing to the Dollar rate hawks. Whilst US GDP goes up so the expectations for the UK slide. With a huge percentage of the GDP now proping up government jobs/expenditure the cost to the private sector is beginning to tell. Cable is at 1.7772-1.7775 up 39 this morning and the Euro is at 1.2061-64 down 5.

Oil is now well and truly stuck in the $60 to $63 level. The speed with which the Nymex rejected the $63 level on Thursday does not bode well for an attack to the upside and clients are now short looking for an attempt at the support of $60. Although the market has traded below this level in recent weeks it has failed on every occasion to actually close below it. Silver has briefly paused for breathe as dealers ponder the $8.00 level. Every dip is being bought by our clients who are sitting on sizable profits and appear happy to wait to see whether there is another surge.

Markets are looking solid this morning after the US staged a late rally and the Far East put on a nice little rally. With the Dow now quoted at 10391-95 this gives a push to both the FTSE and the European markets. FTSE is called at 5197-99 up 15 and is expected to move on from here and the Dax is at 4879-81 up 10 on the 4.30 close but up a hefty 45 from the futures close at 7 last night.

Equities are flat with Prudential, now that EGG is finally returning a profit, announcing that maybe they will hold on to the Unit and 'develop it'. One wonders what they were doing before? The LSE's desperate search for a suitor continues after Euronext were rumoured to be dropping out of the running. The company seems to want to be bought but no one has told the FSA and the chances of such a political disaster being allowed through must be very slim. Can anyone imagine a UK government allowing headlines along the lines of 'Stock Market sold to foreigners'. A bit sad for the LSE which is a quoted company but understandable given the lack of public knowledge about the financial markets. LSE is quuoted this morning at 553.2-557.2 for the december contract. Down 4 overnight.

The dollar has finally woken up after a bit of a pumelling yesterday and Cable is now off some 50pips at 1.7783-86. Having had the briefest of sniffs at the 1.19 level the Euro sprang into action and put on a solid 150 points to push above 1.21 but is now looking a tad tired and is slipping into the mid 1.20's at 1.2067-70.

Oil is up again on rumours of weakness in inventories. The movement was a little too sharp to be producer based and it may be wise for oil traders to go into todays Inventory numbers at 15.30 on the flat side. Weak dollar means strong metals these days and yesterday did not dissapoint with v.strong moves in both Gold and Silver. Gold managed a seven dollar rally which is unusual even these days and clients continue to play from the long side as supply looks to be lagging demand. India and China are expected to take at least 50% of all production next year which does not leave much for the rest of the world! Oil quoted off 40 this morning at 62.00-62.06 Gold up another dollar at 473.3-473.9 and silver closed up 12 at 7.81-84.

For the seventh day in a row the American markets closed on either the highs or the lows of the day. Such unfocussed volatility is normally the pre-curser to a major break out in one direction or the other but it is anyones guess as to which way this will happen. After yesterday dealers will be looking at the top of the trading range for an indication of a desicive move but conversely our clients took the opportunity late last night to get short and are quite happily sitting on some nice profits this morning. Wall Street quoted at 10362-66 down 20 overnight.

The FTSE and Dax are naturally called higher today after the US move and the call is for 15 on the FTSE at 5220-22 and 20 on the DAX at 4920-22.

BP reports this morning and the 16% increase is way short of the expected 36% forecast by analysts. Clients who as we commented previously have been sellers all the way down from 670 are looking to lock in some profits at prices below 610. Oil is suddenly plentiful again and it may be difficult for the Oil major to match this years performance in the future. BP is called down a little this morning at 605p.

The Euro may be having another look at the 1.1900 support level (put another record on I here you say) as it drifts down to 1.1950-53. The charts are now showing a falling wedge pattern with resistance (today) at 1.2050 and support at 1.1900. A close outside this range would give a good indication of the next move.

Oil spent much of yesterday bouncing around the $60 level before closing towards the highs at 60.35 this morning we are seeing a little weakness but nothing significant with Nymex December at 60.20-26. Gold eventually found some support yesterday after a week of falls which had taken us from 483.1 down to 462.0. We closed at 467.0 which leaves us well inside the current trading range and clients are mixed looking at both the highs and lows for direction. Rolling Gold is called at 465.7 - 466.3.

Another day another reversal. The FTSE tried in early trade yesterday to match the rally in the US but by the close was beginning to suffer once more and with the late fall in the Dow last night it is not expected to sparkle today. The early call is 5138-40 down 25 points which with Oil down again may be an underestimate as BP and Shell are likely to suffer.

Wall Street has come off the lows of last night and is up about 10 at 10294-98 giving at least a small pause for breath at the open.

Yesterday's comment about the markets resembling the famed 'whore's draws' description was borne out again with a sharp reversal from the previous days strong rally in the american markets as the dow closed 130 down after the 100 point rally of Wednesday.

Partygaming may open stronger this morning on reports that third quarter earnings were 32% higher in qtr two. Early calls are for a 5 to 6p rally that will still leave the share languishing well below the IPO price.

Currencies are also pretty undecided about where to go as support levels in the Euro and Sterling continue to hold against the dollar. As speculated yesterday the Euro bounced healthily from the 1.19050 level to close above 1.20 and is currently trading quietly at 1.2042-45. The Euro charts are forming a falling wedge formation which could give us a good indication on direction if we trade out of the constricting range.

Oil as mentioned is looking very weak and is now bang on medium term support at $57.58 in the December Brent. A break and close below this level may indicate a failure of the bullish market move and could presage a fall back to the $50 volume and price support area.

Another day another direction !

The American markets are doing a very good impression of a pair of 'whore's draws' as we lurch down/up/down/up on conflicting data and comment. The Dow followed the 100 point fall of Tuesday and early Wednesday with a massive 200 point reversal yesterday evening.

The FTSE is being called some 40 points up this morning at 5209-11 which is not surprising but possibly a little disappointing given the move stateside. Oil weakness is holding the FTSE back as BP and Shell are quite a high weighting in the index. Conversely the DAX is being called up 70 points at 4914-16 as the composition of the DAX 30 is more reflective of the Dow.

Sentiment is driving the markets at the moment as there is very little meaty corporate information to get out teeth into. Legal and General pleased with a near 31% increase in sales and Morrison although reporting worse losses than expected did announce an increase in sales of 4.7% which may bode well for the future.

The dollar is a little stronger this morning with dealers taking profits after reversing the aborted attempt on the support at 1.74 and 1.19 vs the pound and euro yesterday. Cable at 1.7634-37 is quiet and likewise the Euro at 1.1984-87.

Oil was the news yesterday as inventory (unsurprisingly) came in stronger than expected. OPEC have continually stated that the is ample oil about and latest data would appear to bear this out. Brent is now $11 from the highs of early September and if support at $57.50 is breached we could well see a return to the $50 level over the medium term.

The mid October bear move appears to be on time this year with Fed members preaching a much higher rate than is currently in the market. With a 'neutral' Fed rate being considered to be between 3.5% and 5.0% we are still at the bottom end of that range. And if the decision is to go to a tight policy we could see rates even higher than this.

The immediate reaction .. Sell off the indices ... The FTSE struggled all day yesterday to follow the rest of the world's early rally and closed at the lows and this morning is doing no better currently trading off 40 at 5223-25 and the DAX is suffering even more off 60 at 4885-87.

Yesterday had the bears suffering and this morning is the exact opposite with buyers being stretcher out. It is difficult to see much good news out there this morning.

Mining stocks have taken the brunt of the sell off with Rio Tinto down 2% at 2173.1-2176.9 and BHP down 3% at 793.1-794.9.

All eyes are now on the currency markets. The Euro is hammering at the 1.1875 bottom of the support level and clients are contra trading and buying the Euro betting on a bounce from here. With no big US data this afternoon it will take quite some effort to break the 1.1875-1.1900 support range so the buyers probably have the better odds this morning. Sterling is not doing so badly today and is still nowhere near the 1.74 lows of last week (which also probably gives the Euro some support) and is trading at 1.7474-77.

With the dollar looking strong Gold is giving up some value today and is down at 467.2-467.8 off $4 this morning. Clients have stuck to their shorts from the mid 470's and do not appear to be in any hurry to take profits yet.

It looks like it could be time to put on the tin hats, duck down below the parapet and wait for the smoke to clear.

HG Capital bets on Sporting Index

Private equity house HG Capital has snapped up spread betting group Sporting Index from Duke Street Capital for £75.8m.

Existing management will continue to run the company, set up in 1992, with Richard Glynn staying on as chief executive.

Sporting Index, which is also the only sports spread betting company to offer continuous 24 hour betting and sports spread betting on Sky TV, commands roughly 70% of the UK market.

HG said it will work closely with management to leverage the strength of Sporting Index's core business, both organically and by acquisition, to build a broader-based betting and gaming group.

"This will involve not only the roll-out of the proven Sporting Index sports spread betting model into new jurisdictions, but also a further expansion of the product range, both domestically and internationally," it added.

Capital Spreads Market Commentary

The FTSE continues to struggle to rally beyond 5300 and the highs of only a few weeks ago at 5500 now seem a distant memory. With the rally in the US late last night dealers were hoping for a little more this morning but investors are fighting shy of UK stocks as inflation, growth, personal debt and government borrowing levels all act as a drag on the market. The FTSE is currently up some 8 points at 5293-95.

Dow 30 having put on a healthy 60 points yesterday is now up another 20 points this morning at 10363-67. And Bears who have been in the ascendancy over the last month are beginning to feel a little squeezed.

CSFB bucked the trend by posting a steel buy recommendation which pushed Corus out of its worrying slide of recent days. The accepted view that there will soon be (again) a surplus of worldwide steel production due to Chinese production increases may prove to be wishful thinking for steel buyers. This could help to bolster steel prices and give Corus a nice fillip.

Sterling suffered from the loss of one of the Dinosaur rate hawks on the MPC as Sir Andrew Large stepped down early to be replaced by an apparent 'Dove' in the shape of Party Apparatchik Sir(again) John Gieve. Why the UK has had such high interest rates for the last seven years is something of a mystery as an opportunity to trend towards Euro rates has been consistently missed.

Dealers took the opportunity to hammer the pound (and have done so yet again this morning) Cable is now at 1.7463-66 down 80 pips but still not that close to support around the 1.73 level. Of more interest is the Euro which looks to be about to have another shot at the 1.1900 level. The currency has bounced three times from here and it will take some heavy selling or a decent bit of news for the support to fail but having got here it would be surprising if dealers did not at least have a shot at it. Euro is now at 1.1951-54.

Commodities continue to trade in a tight range with Gold stuck between 470 and 478 and Nymex Crude oscillating between $61.00 and 63.50 and is currently at 62.67-62.73.

The Dow spent yesterday hammering at the support levels around 10190 as investors continue to worry over fed fate policy and the effects of rising energy costs on bottom line corporate profitability. Clients are now heavily long in all the major indices quoted by Capital Spreads as they look for a rebound from these levels. The Dow is now trading 20 up from last night with optimism for a pull back entering the market.

The DAX is called down 10 points at 4962-64 after yesterday's late fall which caught the Bulls on the hop. And the FTSE is called at 5330-32 down 10 as well.

Refco in the states is causing serious concerns as financial irregularities concerning the hiding of client losses rear their head. The shares have slumped some 60% over the last few days and worries about greater irregularities swirl around the market. Although not the biggest financial company in the world Refco's roll as broker in many financial transactions means that any default or failure would be disastrous.

The dollar is looking strong again this morning after a small pull back yesterday. Clients who were flat yesterday have started to sell the Euro and Sterling once more as they look for a retest of the major supports at 1.1900 and 1.7300 respectively. The Yen is having a tough time at the moment and the narrowing of the trade surplus is giving cause for concern. Whilst most nations have GDP debt levels in the 40% range Japan is sitting on a mind blowing 140% (and rising). While interest rates are effectively at zero this does not pose too much of a problem but the rating agencies are beginning to focus on this mountain of IOU's and if they down grade the State debt rating again (from the current AA)they could find that no-one will lend them money at acceptable rates. If the trade surpluses start to drain away investors will shy from buying any more state debt thus exacerbating the problem. USD/JPY is currently at 114.74-77 up 40 on the day.

Commodity prices are very peaceful today as Oil continues to stick around the $64 level. Gold rejected the highs once more and tested the medium term upward trend line last night at 474.3 (December Contract) before settling slightly higher at 476.3. Dealers continue to sell above 478 and were pretty releived at the pull back yesterday!

Late Comment today with all markets looking a tad fragile. American markets attempted a rally after the minutes of the Fed meeting were released but after the Dow briefly pushed above 10300 and the S&P had a sniff at the 1193.0 ex-support turned resistance the selling pressure built up and we returned to the lows once more. The prospect of rather more rate hikes from the Fed than was first considered do not sit well with investors. German equity traders seem to be re-assessing the implications of a coalition government and for the moment are taking profits and waiting to see how things look at a later date.

There is light support in the Dax at around 4965 so a close below here may be a bearish signal. Current price is 4974-76 which puts us below the psycological 5000 level. The FTSE is reacting to the movements of either the European or US markets but the highs of 5550 now seem a distant memory. Technically we now have a nice gap in the December Futures between 5422 and 5436 and another much higher at 5487 to 5496. Historically gaps tend to be filled but the trick has been to identify when as it can often take a good long time. If oil turns higher again the preponderance of the indices towards that sector may drag us up but in the current environment the bears have the floor.

Currencies continue to favour the dollar with dealers eying mjor supports in both the Euro and Sterling. A break and close below 1.19 for the Euro and 1.73 for the Pound would be very bearish signals. Clients have been short of both these currencies but are now starting to flatten positions looking for someone else to risk the attempt at the supports. In conversation traders intimate that they will look at shorting again if these levels are broken but are happy to be flat in the meantime.

M&S continues to flatter but clients are selling at these levels (to be exact they are selling whenever it pips above 400p)the Rolling Daily is now at 397.8-399.0 having hit 401.5 earlier today. Has the bubble burst for Burberry? Sales are expected to fall in the current quarter due to weakness in the UK and Spain and the shares have fallen some 27p today. Current December contract is at 390.3-392.1.

Gold continues to move higher with the technical resistance in the rolling daily being breached this morning. Clients have been shorting the contract but are now closing out and licking their wounds. Oil has actually had quite a peaceful time of it over the last week with the price gently drifting back up to $64 in the Nymex contract. $64 is becoming a pivot (support/resistance) point for oil as we occillate between $68 and $61.

Traders short of the pound, long of FTSE

Spread betting punters are boldly approaching the late October "crash season" looking for a rebound the Dow and the FTSE, and they seem even more confident that the pound has further to fall.

Bookmakers say that trading volumes have picked up sharply in recent weeks, on the back of the setback in the stock market that saw the FTSE retreat from a high of 5500 back to the 5375 area.

Capital Spreads said it has seen a take-off in trading the Dax, since it trimmed its rolling Dax spread to two point. After taking a bearish view over recent weeks, punters were sitting on longs today, looking for a rebound in all the main indices.

IG Index said a small majority of its clients are now bullish of the indices, but there are also many expecting a pause before the next move down. .

On foreign exchange, both firms reported that punters were sticking to bearish views on the pound. IG said the market buzz seemed to be about a further fall in the sterling-dollar rate, towards the 1.70 area.

Gold, which hit a new high today just below $480, is also attracting heavy business. Capital Spreads said its clients were short of the yellow metal, looking for a setback, after a "triple top".

IG Index however said its punters were long of gold and also long of other precious metals such as silver and palladium. The latter hit its best levels for the year in recent days.

Cocoa is one of the few commodities that has been struggling lately.

Capital Spreads Market Commentary

Markets closed on Friday on a very boring note with the US markets trading in a tight range for most of the day. Markets are looking to open slightly higher this morning on the fact that nothing bad happened over the weekend(!). The Germans appear to have cobbled together a government but like all coalitions the chances are that no tough decisions will be taken as there will be no desire for the partners to be associated with unpopular policies. The early call is for the Dax to open higher at around 5016-18 but clients are setting sell orders above here.

The FTSE is called up 5 at 5362-64 on the slight strength in the US markets over the w/e.

BHP Billiton is likely to open substatially higher on buy recommendations from several analysts. The call is for the open at around 860 up some 30p.

Elsewhere there is little or no corporate news today and markets are likely to remain quiet as the US has a kind of half holiday due to Columbus day and the Japanese had a holiday today as well, Health Sports Day!! (something one feels this country could do with).

Currencies are likewise unchanged on Friday with the Euro holding onto the rally from the 119.00 support versus the dollar and now trading at 1.2129-32 and sterling still looking fragile at 1.7605-08.

Hg Capital in talks to buy Sporting Index

Private equity group Hg Capital is in exclusive talks to buy sports spread betting company Sporting Index, the Financial Times reported on Wednesday.

The deal, worth up to 100 million pounds, is expected to be completed within a month, the newspaper said without citing sources.

Hg Capital beat competition from several trade and financial bidders, the paper said.

In July, Sporting Index's owners appointed advisors to consider a sale and other options, sources close to the company told Reuters.

Sporting Index was founded in 1992 and says it has about 70 percent of the UK sports spread betting market. No one at Hg Capital or Sporting Index could be reached for comment.

IG Index punter wins £29,300 as Dow Jones takes a dip

A punter at IG Index took the spread betting firm for £29,300 after a huge long-shot bet on the US Dow Jones index paid off within seven minutes of the close of trading on Tuesday, it emerged yesterday.

The punter, one of the firm's regulars, bet that the index would fall to 10440 at some point during yesterday's trading session.

At the time he struck the wager, called a binary spread bet, the mood on Wall Street was optimistic and the index was trading at around 10560. IG therefore offered to pay 98 times £200 and then 97 times £100 that the index would not go as low as 10440 during the trading session.

Had the index not fallen 94 points to reach 10440, the punter would have had to pay £700. However, Richard Fisher, president of the Dallas Fed warned yesterday evening that US inflation was "near the upper end of the Fed's tolerance zone", a view backed up by other Fed officials later that day.

His statement and profit warnings at US printer Lexmark and household products group Clorox battered investors confidence and sparked a sharp fall in US stocks.

Even then, it was a close run thing and the punter's bet only paid off within seven minutes of the end of US trading session with the Dow finally closing at 10441.1. Such bets only need the index to hit a certain point during the trading day for them to pay off.

Will Armitage, from IG, said: "There was a great deal of cussing on the trading floor as the realisation that the anticipated fall was going to hit the punter's target with just seven minutes left to go."

He added: "I just hope he has booked himself and his partner a nice holiday somewhere! This is certainly one up for the punter against the bookmaker!"

While the punter struck the wager at a spread bet, it was equivalent to a 33-1 bet with a regular bookmaker.

Capital Spreads Market Commentary

Wall Streets late sell off on fears of further rate hikes and the normal jitters before the start of the reporting season. The dow closed down almost 100 points which made it one of the worst days for quite some time. Long term support at 10360 may be tested this week if the non farm numbers do not excite of course the chances are that, as has been the case for the last six months, the trading range of 10350-10730 will hold and this time next week we will be stuck back at 10550!!

Wall street is called at 10428-32 down a little from last night and the European Equity markets are not surprisingly down a little on the open as the US drags them down. FTSE at 5449-5451 down 40ish and the DAX (pulling back from the extension rally yesterday) is now back below 5100 at 5091-93.

Equity markets are still being pushed around with talk of takeovers for once taking a back seat as BA, BP and Glaxo give mildly negative outlooks. BP is down 12 at 641.7-642.8 and clients who took the opportunity to get short at 670 (and higher) are now looking at healthy profits.

Currencies, which have been our most popular product for almost 9 months, have started to slow up as traders look for some indication as to the next trend in the dollar. The Euro has fallen back to the major (and we mean MAJOR) support at the 119 level and this is being watched keenly for indications of a break or a bounce! Euro is currently at 119.62-65 and cable is at 1.7649-52 both up marginally on the day.

Oil, Gold, Silver and Softs all had bad days yesterday as investors moved out of commodities. Most metal and energy commodities are stretching the envolope at the moment and supply in all areas appears to be being addressed. The potential for dramatic price falls must now be considered and clients are taking out larger short positions in hopeful anticipation of a correction. Gold looks to be struggling to clear 477 so punters are shorting below this number withs stops around 478/479.

Not much charisma but nearing the winning post

It is the sort of thing that will have environmentalists emitting steam. Spread betting company IG has opened markets on the price of carbon dioxide, the greenhouse gas that will cause the polar ice-caps to melt by the end of century if scientists are to be believed.

The EU Emissions Trading Scheme directive gave birth to the world's largest market in carbon dioxide emission allowances on the first day of this year.

Each member state is required to prepare a plan for how much carbon dioxide installations such as power stations are allowed to produce. If one breaches the cap they are set, it will have to buy spare allowances from others or face a hefty fine. If a company emits less carbon dioxide than its cap at the end of a compliance year, it can sell its excess allowances to those that exceed their cap so they can escape fines.

Naturally, where there is a commodity to trade there will be a futures contract set up to enable companies to easily trade with each other throughout the year. IG offers a spread bet on the price of the futures contract.

The hard core environmentalists find the concept of trading carbon emissions like this anathema, arguing that companies that breach limits should simply face heavy fines to force them to clean up. Others see it as a great way to encourage better behaviour - if companies can make money from keeping emissions down they have a big incentive to stay clean or even improve.

IG is currently offering a spread of €22.55 to €22.75 on the December contract, and the market is certainly volatile enough to make it worth playing. The contract price yesterday stood at around €22 per tonne of CO2, about where it was eight weeks ago. But it surged to a high of €29.50 in early July, then dipped to €20 in August and rose again to €25 in early September.

The past week has seen little change, but the smart money is that this will not last, and most punters are selling the spread.

Bets are settled on December 16 and are based on the official carbon market closing price. As usual, profits can be taken or losses realised at any time.

Police inquiry into suspicious bets at City Index

Capital Spreads Market Commentary

Equity Markets continue to strengthen as investors become more sanguine about future returns. The only (major) markets not benefiting from the current bull run is the US which continues to be stuck in the (roughly) 10400-10700 trading range for the Dow and 1200-1245 for the S&P and is indeed currently bang in the middle of it at 10540-44 and 1227.2-1227.6 respectively this morning. Clients are now heavily long of US indices (hoping for a catch up) and mixed in the European and Far East markets.

The FTSE is called unchanged at 5499-5501 and the DAX likewise at 5078-80. With little corporate news this morning there is likely to be a bout of profit taking which could take the FTSE back below 5500 after yesterdays extension rally.

Currencies are very very quiet this morning with Cable nursing its recent losses and clients looking for some form of base to be formed at these levels (1.7500 to 1.7550). 1.7300 is the major support created back in july and the momentum indicators are still negative giving the bears the upper hand at the moment. The Dollar is in the ascendancy at the moment and unless there is a dramatic turn around clients are finding it 'prudent' to stay long of the greenback in the absance of any other indicators.

This afternoon is very light on figures with only the Factory orders at 3 o'clock. The market expects a jump of 2% after last months negative 1.9% and until then we do not expect much activity.

Oil is actually quietening down a little with $1.50 trading ranges the norm over the last few days. The short term indicators are flattening out as the markets are finding it difficult to maintain levels over $67. As momentum starts to possibly turn negative punters are beginning to set up longer term shorts on any rallies. November nymex is trading at 65.32-65.40 down 11 cents this morning.

Spread better IG says confident for full year

The country's biggest spread-betting company IG Group (IGG.L: Quote, Profile, Research), which relisted in April, said on Thursday it was confident of its trading prospects for the current year.

"In July ... we said that the current financial year had begun well and that volumes had been strong. These strong volumes have continued through August and September and we continue to trade well across all areas of the business," the firm said.

IG allows investors to speculate on currencies, interest rates, shares and indexes.

"The board remains confident of the group's prospects for the current year," it said in a statement ahead of its annual general meeting.

The company said its Australian office which opened in 2002 was still growing strongly but it was unlikely to contribute materially to profits during the current year.

Looking ahead, the group said it had plans to open another overseas office based in Singapore in a bid to boost its presence in Asia although the majority of its client base is still in Britain.

"We now have the technology in place to enable us to offer versions of our Web sites in multiple languages and we will continue to roll these out," it said.

In July the company reported a 40 percent rise in underlying profits to 35.1 million pounds for the year to end-May.

IG was refloated in April at 120p a share in a listing that valued the company at 393 million pounds, having been taken private by its management in 2003 in a 143 million-pound deal backed by private equity firm CVC.

The company, founded in 1974 by businessman Stuart Wheeler, closed at 167p on Wednesday, valuing the business at around 546 million pounds.

It first floated in London in 2000.

Capital Spreads Market Commentary

Markets continue higher as investors ponder (depending on the country involved) either better growth or lower interest rates. In this environment all news is being taken as bullish as the negative factors are ignored. In general this type of reaction can hold sway for some considerable time as longer term traders will remember.

The FTSE is now at four (or thereabouts) year highs as the perception that a slowing economic environment will force the BOE into further rate cuts thus of course increasing the value of dividends etc... Investors may be confused by this reaction as some would say that surely a slowing economy means lower corporate profits BUT the vast majority of the FTSE 100's wieghting is in stock that makes most of its money outside of the UK where the markets are looking much more to their liking. The FTSE is now at 5488-90 down a touch overnight on little business. The 5500 level will probably cause a bit of psycological resistance but clients are long looking for further rallies.

The DAX has now fully recovered from the election fiasco and is also trading at highs around 5050. There is a technical bullish trend line resistance at around this level and punters are taking profits with a few shorts setting up.

As commented here over the last few weeks Sterling has few friends at the moment and buyers are very short term indeed. We are now sitting on a support level range at 1.7600 to 1.7650 in Cable. This support was weak but with trading now concentrating here for three days a volume support is also being created. Clients have taken the opportunity of pocketing profits and are now waiting to see whether this support is broken or holds leading to a market bounce. GBP/USD is quoted at 1.7665-1.7668 down a little overnight.

Oil and Metals rallied again yesterday (helping mining and oil stocks once more). Dealers are now flat in Oil, still short of Gold and Platinum (ouch) but heavily long of Silver. Nymex is trading this morning at 66.32-66.40 unchanged on the day but looking bullish once more. We are now flirting with the top of the current trading range once more with $68 proving a tough nut to crack.

New highs on the FTSE as oil stock push higher again rolling FTSE is now back to unchanged(ish) at 5455-57. The FTSE is now outperforming the US markets to some extent as the continued rate hikes in the states start to take their toll. With the Fed likely to keep the pressure on for a few more meetings investors are struggling to find value in US stocks which has led to the rather lacklustre performance over the last 4 to 5 months. Wall Street traded the inverse of Oil yesterday and tried a move to the upside in early trading as oil fell followed by a testing of the support levels later in the day on the oil rally only to finally close up a small 20 points. This morning is very quiet with some pressure to push lower Wall Street is quoted at 10437-41 down 10 and clients are flat looking for some further impulse to get involved.

BP, Shell and other oil stock were, unsurprisingly, higher this morning on the oil rally back to $65.80. BP is now at its all time highs again and clients are taking the opportunity to set up shorts above 670. There is not much information to support going short at this time and it looks like this is just a bit of top hunting. Game Group has announced a widening of losses for the first half of 2005 and clients remain very negative on the stock the shares are down another 3p today and December contract is trading at 83.1-84.4.

Sterling has opened well down this morning and clients remain short (albeit with a bit of profit taking this morning) sensing a push back to support at 1.7300. Dealers have been getting the sterling weakness right for some time now and with a weakening economy there is unlikely to be a major retracement in the near future. Cable is quoted at 1.7662-1.7665 down 120. The Euro is weaker against the dollar but stronger against other currencies in what has been esentially a dollar move overnight. EUR/JPY is up 23 at 135.66-135.69 but down 60 at 1.2010-13 vs the dollar.

Oil is quiet this morning at the higher end of the trading range. Traders spent most of yesterday rallying from the lows of 63.00. Bears were squeezed all day and any short sellers had little chance of any relief.

Well, hurricane not as bad as feared, oil down a bit, markets up a bit, currencies so-so, let the good times roll! Wall Street responded as expected this morning with a 50 point rally, mirrored by the DAX (up 50) and matched by the FTSE (in value) up 30.

The FTSE 100 is now hammering at the highs for four years (or whatever) with resistance at 5475 in the Dec Future giving perhaps an initial restraint. The Futures have also opened a gap below the market down to 5448 which may make an attractive target for Day traders. But for the time being the Bulls have the chair and are pushing to force out weak shorts. Dec FTSE is at 5471-75.

The DAX continues to be the most volatile of the major indices with 50 to 100 point trading ranges becoming the norm. Today is a case in point with the Rolling Dax up 60 at 4963-65 and like the FTSE is just under resistance levelsand has also opened a trading gap down to 4905.

Today sees little corporate or economic data and shares are likely to react to the underlying sentiment. (bullish).

Currencies are the poor relation today with little impact over the w/e. Clients continue to hold short positions in Sterling and are being rewarded once more with a weak opening today. The UK economic news is getting no better and Gordon Brown seems more intent in blaming 'other' factors for the current poor performance rather that actually (finally) making a difficult decision. Cable is trading at 1.7738-41 down 40 which is now back in the lower of the trading ranges of 1.7350 to 1.7815. Resistance above ranges from 1.7785-1.7815 whilst there is little support before 1.7600.

Oil is mentioned already is off some 100 cents having fallen 250 on Friday. We are now trading below support at 63.40 and the potential is for further falls towards $58.

Gold gave up on the highs in spectacular fashion giving up $10 in two days. The rolling Gold is now at 460.3-460.8 and clients are short looking for more.

Hurricanes and disappointment pushed the Dow and S&P lower yesterday and with clients trying to pick the bottom for almost the whole day it will not go down as one of their better days. Our clients were heavily short going into the Feds rate decision but after Tuesdays fall most had taken profits and are now starting to look for a confirmation of the trading range of 10700 to 10350 in the Dow. The current quote in the Wall Street contract is 10373-77 still within the aforementioned range. A break and close below 10350 could indicate a move back towards 10200 and then 10000. The close at the lows in the US markets will mean that Europe is likely to open lower this morning with the DAX called at 4858-60 down some 15 points and the FTSE likewise down at 5360-62, 10 lower.

Smiths Group has declared net income for the year at plus 3.7% at 220M, this is substantially less than the expected 232M forecast by analysts. The shares are expected to suffer this morning with initial calls down 10p at 944.

Interest is also being focused on Aegis as the vultures circle above waiting for a formal bid from France's Publicis. The shares rallied some 20% yesterday and clients are getting on board hoping for a bidding war. As mentioned the shares rallied 25p to 145 but with the takeover panel getting involved we may see a pull back this morning.

Currencies after the initial move yesterday in tokyo spent the day in tight trading ranges. This morning has seen an attempted dollar sell off followed by a push to the upside, both have failed and cross rates are almost unchanged on last night with little trading taking place. Sterling is slipping a little this morning versus the Euro continuing yesterdays falls and clients continue to hold Euro positions.

Oil is again trading off the weather forecasts and with Hurricane Rita not due to hit until Saturday we could be in for a rollercoaster ride. Oil is now at 67.75-83 for the November contract up 70 cents overnight as the storm is upgraded to a level 5.

Gold as mentioned yesterday continues to rally higher as we push into the new trading range. It is now trading at 18 year highs with bears being well and truly trashed. Clients continue to sell looking for a top but this has proved costly and more cautious traders are looking for a better indication of a pause before attempting to oppose it. Rolling Gold is quoted at 474.0-474.5 up another $2 this morning.

The Feds interest rate decision came as as surprise to some but not to others which makes a change as the previous ten were all expected and well forecast. The feeling that there may be a pause as a kind of memorial to the Hurricane damage obviously never made it off the drawing board as the more hard headed central bankers took a more robust view of the economy. The subsequent fall in the US markets was in line with virtually every rate hike over the last year as traders looked at equity returns and decided that they were a bit rich at this time.

The European markets are being called off some 20 points in sympathy this morning with the FTSE called at 5390-92 down 25.

Woolworths reported weaker than expected numbers yesterday in direct comparison to Tesco the company is now trading heavily in the red. In this environment some clients are wondering whether the failed MBO of the recent past may rear it's head again.

Tesco announced (yawn) another massive increase in profitability and yet again