Financial Spread Betting News

RBS set to make fortunes for shareholders ... and punters

Financial bookies are braced for a massive pay out if Sir Fred Goodwin beats stock market expectations when he delivers his half-yearly trading update on Friday.

Spread betting firm Cantor Index says it has experienced a late rush from gamblers who have bet heavily that the shares are poised for a rise to well above current levels of around £17.34.

"We always see good interest in the performance of RBS, but we have experienced particularly strong betting in the past few days, with more than 200 clients taking up positions," said spokesman David Buick.

"They believe that the market has been particularly beastly to the bank and that it will have to take more note of its underlying performance after the results."

The gamblers have bet anywhere between £1 to upwards of £1000 on each 1p movement on the share price and a chunk of the cash was staked earlier in the week when the share price was well below £17.

Spread betting is particularly attractive to big investors as they do not have to buy the underlying shares and their winnings are free from capital gains tax.

Top analysts James Eden and Ian Gordon at Dresdner Kleinwort agree with those who believe RBS is poised for a big rise after years of underperformance and have set a target price of £22.50 for the shares.

"In our view its current and absolute ratings border on the absurd," they argued in a recent note.

The brokers believe that Friday's profits could show a jump from £3.68 billion to around £4.48bn - a good £130 million above consensus forecasts - but reckon the company needs further radical action to transform the share price.

In particular, they believe the company should get a full New York listing to boost its American shareholding from the current 22.5% of the total to nearer 30%, which would be a more balanced reflection of its big US earnings.

This would require an issue of American Depository Receipts (ARRs), which enable overseas companies to sell dollar-denominated securities.

RBS already has an ADR programme for its preference shares, so such a move would involve minimal extra expense to meet regulatory approval.

At the same time, the brokers reckon that the board could gain brownie points from major institutional share investors by changing terms of management incentive deals which involve the issue of bonus shares based on the growth in earnings and take no account of the company's share price performance.

Meanwhile, the shares should get a further boost from the group's share buyback programme, which has absorbed only about £200m so far this year. This leaves management free to sanction further purchases of up to £800m in the next few months before taking account of any expansion in the scheme.

Apart from RBS, the other big banks to report in the next few days include HSBC tomorrow, HBOS on Tuesday and Lloyds TSB on Wednesday.

After bumper figures from mortgage bank Northern Rock last week, brokers are looking for a particularly strong showing from HBOS, owner of the Halifax and Bank of Scotland.

Despite expectations of further increases in bad debts, brokers look for news of interim profits of around £2.5bn, up from a reported £2.26bn last time.

Some believe that new chief executive Andy Hornby could make his mark by sanctioning an increase in the bank's share buyback programme from £750m to £1bn or perhaps a little more.

HSBC, which has spent around £11bn on global acquisitions in the past three years, should underline its strong position in emerging markets with news of a profits increase from £5.72bn to around £6.19bn.

Followers look for further assurances on credit controls as the group continues to take a key role in financing cross-frontier merger and acquisition deals.

Lloyds TSB, owner of Scottish Widows, could be the one major bank to report lower interim profits, with analysts expecting a marginal decline to around the £1.7bn mark.

Much of the damage is likely to be caused by a slump in earnings from payment protection insurance following widespread criticism and the group could suffer also from a downturn in non-mortgage lending.

Brokers expect some improvement in the second half, although there will be a lower rate of recoveries of corporate bad debts compared with last year, while there is likely to be a further increase in provisions on the retail and asset finance side.

Capital Spreads Market Commentary

And so we come to close of the week. In the past few months the last day and a half of the week have tended to be rather poor affairs as traders unwilling, in the current world environment, to hold positions over weekends have sold out of long positions. Since the Middle East quarrels sparked up once more we have not had a positive end to the trading week.

Will this trend be ended today? The omens are not good with the FTSE opening 25 points lower on the late sell off in the US last night but we have seen some solid buying on the open rather than continued selling so at least our clients are optimistic. The FTSE is opening at 5905-07.

The Dow failed for the third day in a row to close above the heavy resistance levels at 11130 even though it managed to spend much of the trading session above it. The close at 11100 (bang on) was almost unchanged on the day but corporate results after the bell have taken us higher this morning to 11141-45.

Prudential rather surprised the market with an announcement of falling UK sales. This comes the day after Legal &Gen released much better than expected data (on strongly rising UK sales) which had sent the Pru 10p higher. The shares are now down 20p at 575.2-576.3 and the board must be feeling rather uncomfortable having successfully fought off Aviva's takeover bid of around 750p back in March. The big investors will be looking for answers as to what data the board based its defense upon.

Currency markets, having gone for the big Dollar bear move in early trade gradually ran out of Greenback sellers throughout the afternoon and evening. Cable having been up 140 pips at two o'clock gradually gave this all away and closed just 20 pips to the good. This morning sees sterling at 1.8592-95 just below resistance at 1.8600 and the Euro at 1.2695-97 also just below the heavy resistance level of 1.27. Dealers will probably await the major US GDP number due this afternoon at 13.30. The provisional GDP data figures will give traders a 'heads up' as to what the Fed is looking at in relation to interest rate levels, growth expectation, tax revenue and inflation forecasts. In times past this has been a heavy index and currency mover and traders are not likely to risk open positions ahead of the release.

Gold which was $16 to the good on the initial dollar weakness in early European trading yesterday was pulled back on the subsequent dollar buy back and ended the day just $6 up. This morning sees rolling Gold at 631.7-632.3 up a dollar but trading is very, very light and we are stuck in a tight trading range for the morning session. Clients remain very much two way in metals having been big buyers in the first six months of the year, investors' appear to be much more cautious about long term expectations.

Oil rejected the 73.50 support level and traded higher for most of the session yesterday and is now sitting comfortably in the middle of the current trading range at 74.80-86. Clients are small long looking for some further poor international news to send us higher once more. Inventories appear strong at the moment and there are few bottlenecks just at the moment so the current delivery month (September) is vulnerable to a lack of bad news. A quiet weekend could send prices lower once more.

A curious thing seems to be occurring at the moment, in the last two months we have had 26 up days including six of over 100 points and only 16 down days and yet we are currently just 120 points up over the period. Every time we look like putting on a nice little run the market seems to get cold feet and down we go.

This morning was a perfect case in point. The US markets continued to rally into the evening before closing near the highs of the day but Europe seems unimpressed. Admittedly a plus 100 point move yesterday, which came effectively from nothing (no economic data, no startling corporate news and the Middle East problem as large as ever), will weigh on markets minds but for the FTSE with Gold Copper and Oil up nicely overnight an outside observer would have been forgiven for expecting a continuation this morning!

The FTSE is called unchanged at 5832-34 the Dax also unchanged at 5570-72 and the Dow treading water at 11051-55. (How many euphemism for nothing going on are there?). There are precious few technical levels in the FTSE at this level with some support at 5818 and a weak resistance at 5855 before the heavy resistance level between 5885 and 5905.

The Dow is at an important trading point around 11045 which was the peak of a bull move in January and traders will be targeting a break of 11150 to keep the bull move going.

It is Mr Sarin's day of decisions. The AGM could see a revolt from shareholders and his forcible removal from the board. This is most unlikely even though a substantial minority appears to be pushing, it is almost unheard of for a FTSE 100 company to have a shareholder revolt at an AGM (I cannot remember a successful instance of one). The shares are likely to remain subdued until the voting is over. Capital Spreads quotes Vodafone at 115.25-115.50.

Currency markets are essentially unchanged after the Japanese made an unsuccessful attempt at a dollar move in the small hours of last night. The Euro is now at 1.2658-60 up 20 pips but our clients are steadily getting out of long held bull positions. Yesterday saw another failed attempt to get above 1.2700 and whilst we stay below this level punters are not happy holding on to Euro's. A break and close above 1.2710 would change many dealers outlooks.

Cable spent most of yesterday in a tight range with support at 1.8485 and resistance at 1.8550 holding steady. The far east pushed us through support to trade all the way down to 1.8440 but by the time Europe had come in we were back at the closing levels of last night at 1.8500. Today will probably see more probing to find a weak point both higher and lower but in the absence of any major news we could be in for a fruitless day.

Gold had a quick look at $600 yesterday before the buying returned and the early traders have taken us up sharply this morning to 621.0 621.6. Punters will be hoping for a pull back as for the first time in almost six months our clients are actually short of Gold.

Oil, which was weak all of last week bounced off the support levels mentioned yesterday at 73.50 and climbed dramatically all day. The hopes of a quick solution to the crisis in Israel seem to be fading a little and dealers are worried about any escalation causing further upheaval. September US crude is at 75.72-75.78 up 68 cents this morning. Our clients have got themselves caught the wrong way round in this rally and are hoping to see a quick burst of optimism from Ms Rice's visit to the Middle East.

IG Group beats FY forecasts as spread betting bonanza continues

Spread betting firm IG Group Holdings PLC reported better than expected full-year profits, buoyed by the growing popularity of spread bets on financial markets.

IG said earnings before interest, taxes, depreciation and amortisation (EBIDTA), its preferred measure of profit, came in at 52.6 mln stg in the year to May 31, a 51 pct increase on the previous year, and ahead of the consensus analyst forecast of 48.9 mln stg. Turnover rose 44 pct to 89.4 mln stg.

The improvement was driven by IG's core financial spread betting division, where revenues jumped 47 pct to 54.8 mln stg, as the number of customers placing bets with the group climbed 26 pct to 300,000.

IG said it continues to attract new clients, with the growth rate in new accounts during the final quarter of the year doubling compared with six months earlier.

IG, the UK's biggest spread-betting firm, has over the past five years benefited from growing enthusiasm for financial spread bets, which offer private investors a way of profiting from falling as well as rising asset prices.

By 10.00 am, IG shares were up 6-3/4 pence at 28-3/4.

'I think these results were very good. The interesting thing is the run rate of account opening in the last three months, which in my view bodes very well for 2007,' said Investec analyst Daniel Havercroft, who has a 'buy' recommendation on IG shares.

The company, which also takes spread bets on sporting events, said its sports division enjoyed its 'best ever' month in June thanks to the 2006 football World Cup. IG has avoided the legal difficulties faced by some online gambling firms in America as it does not take bets from US residents.

Responding to speculation that IG could take over one of its smaller rivals, chief executive designate Tim Howkins said the company may be in a position to do a deal a year from now, but that for the moment all possible targets are too expensive.

'There's some possibility of it happening in a year, but it won't happen in the next month,' Howkins told AFX News in a telephone interview.

'We have informal chats with the competition every now and then, but there isn't a meeting of minds at the moment. There isn't a deal available at the right price.'

IG's competitors include CMC Markets, IFX Group and London Capital Group Holdings. Howkins said IG is confident of continuing to grow without acquisitions, supported by an investment programme budgeted at 8-9 mln stg this year. The money will be spent on building up IG's data centres and expanding its London office space by 50 pct.

'There are signs that our lead in (UK) spread betting is becoming more pronounced. Some of our competitors are falling behind in terms of technology and that difference is becoming apparent to clients,' Howkins said.

The CEO-designate added that the company has lined up a candidate to succeed him as finance director, clearing the way for him to formally take over from outgoing chief Nat Le Roux. The group expects to make an announcement 'in a couple of weeks'.

Le Roux, who led IG back to the stock market in February two years after it was bought out in a private equity deal, plans to 'take a year out to travel the world, and then return to university to take a PhD in behavioural psychology,' Howkins said.

Capital Spreads Market Commentary

European markets are likely to open slightly higher this morning as the strong gains of Wednesday last week have been gradually dribbled away in uneasy trading.

The Nikkei manage a 200 point reversal last night which will come as some relief and although the falls in Copper Oil and Gold overnight may harm the mining and oil sector the reasons for the falls (better news from the Middle East) should outweigh this effect on the FTSE.

With dealers unwilling to hold positions over weekends whilst the Israeli, Hezbollah, Hamas spat continues we may end up over the next few months with a gradually falling market.

For a change, it was difficult to find an area that was doing well on Friday and this is odd because normally one market's woes can be construed to another's advantage. Rumours of massive hedge fund losses over the last few months continue to circle the investment fraternity and, if true, this is likely to severely limit activity in coming months. With dollar returns now above 5% it is very tempting for funds to be converted into cash and just put on deposit. Analysts are becoming increasingly worried about the long term moving averages which had been looking positive but are now beginning to turn negative.

The FTSE will open unchanged(ish) at 5725-27 as will the Dax at around 5450-52. This morning sees the biggy (Vodafone) coming with its latest trading announcement. The rate at which the company has been burning through capital over the past three or four years has been impressive and the purely technical writing off of goodwill does not make for wonderful headlines. Mr Sarins survival techniques may be put to the test as even large fund managers appear to be coming out in opposition. Vodafone shares have been just about the only FTSE 100 company that our clients have been consistently short of. Generally selling after every announcement of 'unit disposal' 'special dividend' 'share buy back'...etc which have invariably moved the share price, very temporarily, higher. There is always the underlying feeling that if a company is disposing of units with a loss then they are implicitly saying that someone else's management is better than their own and if they are making special dividends and share buy backs then they cannot think of anything else to do with the cash flow (although after the massive waste of share holder value in the past takeover frenzy they are probably right!!).

In any case the announcement is likely to give some breathing space to the management and the shares should have a small rally from the closing levels of 111p On Friday.

The dollar is remaining weak in general trade but prone to very sharp rallies on economic data or political events. Whatever the problems with US deficits the same can be said for Europe and the UK (generally with spades on!). The bear dollar story is becoming less easy to propound as the reasons for its weakness are pretty much universal anyway.

This morning sees some dollar buying as dealers ponder the failure of the Euro to break above 1.2690 (again) and our clients are busily closing out positions. At 1.2640-42 we are now a way away from the resistance levels and the easier direction appears to be lower this morning. With Cable at 1.8520-23 down some 70 pips all we are seeing is continued drifting lower and continued selling.

Gold is similarly weak (mainly on the dollar strength) and bulls are now looking a tad worried as we approach $600 once more. With no (or very little) income from a gold investment adverse price moves are doubly hard to take as they represent a straight loss of capital. Gold is now at 616.1-616.7 down another $4 this morning. We are seeing buying at these levels (actually we have seen buying virtually all the way down!) but weak bulls are now desperately hanging on.

Amidst all the news Oil has actually been quite quiet over the past four trading sessions (relatively). Support appears to building at around $73.70 (Sept nymex). The current price of 73.92-73.98 is 40 cents off over the weekend but not dramatically so. Again we are mainly seeing buying in this product as the market slips.

IG Index Update

Trading at IG Group Holdings PLC has been strong throughout the year. Revenues, numbers of clients trading and numbers of transactions have all shown substantial progressive increases.

In May, the board forecast full-year revenue of 85 mln stg-plus, up from 62 mln in 2005, and EBITDA in excess of 50 mln stg against 35 mln.

The UK financial spread betting business has seen a substantial increase in the rate of recruitment of clients. The number of clients recruited in the second half of the financial year will exceed that in the first half by more than 50 pct.

Annual revenue growth for this business is anticipated to exceed 30 pct.

The group's Australian business continues to achieve sustained high levels of growth and will report year-on-year revenue growth comfortably in excess of 100 pct.

The London-based CFD business is anticipated to report growth of around 60 pct.

The group's sports division continues to make good progress and will report revenue growth of about 30 pct.

At the pretax level, Bridgewell's Katrina Preston predicts year to May 2006 profits of 45.3 mln stg, up from 20.6 mln, for EPS of 9.2 pence against 6.8. She looks for a 4.6 pence (nil) dividend total.

Capital Spreads Market Commentary

One of the quietest days of the year yesterday with clients deciding that it was probably just to nice outside to bother with the markets. Europeans have reacted to the small sell off in the US overnight to open slightly weaker but the selling appears almost non existent and it would appear to be a reaction mark down in prices buy the market makers.

The FTSE is now 20 points off on last nights close at 5750-52 and trade volumes are slow again. The Dax is matching the FTSE pip for pip and is also off 20 points at 5524-26. Last nights announcements from Google and Microsoft showing better than expected numbers have lifted the Nasdaq Dow and S&P off the closing lows at nine last night. There are no US economic figures out today, no major corporate statements in the UK and the temperature for the weekend is set for 'very high'. The chances are that the markets will shut up shop early and head for the beach. That said with the Middle East problems rumbling on we may find a gentle drift down in prices as investors flatten out positions, unwilling to risk an uncertain weekend.

In the news has been Party Gaming due to the US seeming to have decided that they want to have absolutely no friends at all in the world and arresting UK business people seemingly at random. The results which were due today came in at the higher end of the range and in normal circumstances the shares would been looking very cheap indeed but with Mr Carruthers of Bet on Markets due in court today not many serious investors are willing to take the risk. If you were a fund manager the downside risk to your own job would be far greater if the shares went pear shaped again than the kudos you would get if you made a bit of a profit.

Currency markets are listening closely to Mr Bernanke and the translation does indeed appear to be that rate tightening is either at an end or very near to the end. In this scenario dollar holders are struggling to stem the tide of constant selling. The argument over the twin deficits is difficult to refute BUT if the latest budget numbers from the states can be believed one of those twins may be about to expire. With interest rates the highest (by quite some way) of all the majors the cost of running short dollar postions is becoming quite high. Therefore the sharp corrections that we keep experiencing.

Sterling is (for the second week in a row) the main beneficiary of the buying and the GBP/EUR rate has recouped all of the loses over June to regain its roughly 1.4650 median level where it has been for almost 2 years. Current price of 1.4643-47 is comforting for those of us with Euro mortgages! The cable rate at 1.8540-43 is up another 50 pips this morning the 1.8550 -1.8560 level is a massive volume resistence point being the high of the three previous attempts to go up.

The Euro is a little below the 1.2690-1.2710 level that I seem to have been talking about for one reason or another for the past three months. At 1.2664-66 we are likely to see an attempt to go higher if only to have a look at the level but the euro seems curiously out of favour just at the moment and traders are not quite so positive as in recent times.

Gold Slipped yesterday (in a weak dollar environment) and is doing so again today. This is odd as one of the main crutches for the Gold price has been the falling greenback. If this accepted support is starting to fragment Gold could be in for a tough time. The price is now at 625.9-626.5 down $4 this morning.

Oil is quiet today and in contrast the equity markets traders are likely to be slow buyers as protection against w/e news Sept Brent crude is at 73.80-85 up 15 cents.

Markets look to be opening higher today as Oil and Metals fell heavily in late evening trade in the US.

Fears of an imminent move toward $100 in the price of crude were assuaged to some extent by the general 'lack of more bad news' out of Lebanon. Weak longs in the energy commodities were squeezed all evening and we ended the day some $4 off the highs of Monday.

This morning the FTSE looks to be attracting more buying interest even though oils and miners would be expected to have been damaged by the falls in commodity prices. The call is for the FTSE to come in at around 5700 as the 5650 support held again yesterday and bulls will be hoping for further gains.

The US markets tried to push lower in general selling but late buyers took the indices to close on the highs of the day. Any further buying will give chartists the opportunity to call the recent 10670 (ish) low, hit yesterday and on Monday, as a double bottom. Which if confirmed would send us dramatically higher. Traders are very nervous of a break and close below this level which would open us up to much larger falls. The Dow is called at 10830-34 up 30 points.

In the equity arena wetherspoon came in with some nice numbers showing continued strong growth in both new and like for like sales. The graph for this share would give any investor a very warm fuzzy feeling. The price has risen in an almost uninterrupted trend line for the past year from 270p to the current 424p. Investors looking at this company would be excused for not realizing that recent trading in the markets has been distinctly sticky. The September contract is trading at 424.9-427.1.

In the currency markets sterling was suddenly everybody's friend with the good old pound rising strongly versus every other major. This morning sees that trend continue against the Euro and Yen which are still drifting against the dollar. The Euro is flirting with the very long term support level at 1.2470 which if broken could cause some heavy selling. The market is still very short dollar long euro. Against the yen the lower trend was broken (at 117.10) on Monday but we remain in the range at 117.50-117.53 and a failure of the Euro to go lower could trigger some USD/YEN selling. The feeling amongst our clients is that a dollar rally could very well take the pound with it.

Metals had their second traumatic day in a row with Gold managing to fall $20 for the second time. Our clients have been heavy buyers of the yellow metal but the recent falls have caused many to cut positions (still in a profit but much less than expected!). The price is a little lower this morning once more at 626.1-626.7 but this is in light trade.

Oil has recovered some of its drop overnight up 50 cents at 75.79-75.85 for the September US contract. Our clients are not too sure about this and have been selling in the morning session.

Paul `The Plumber' Davidson May Sue FSA for Costs (Update1)

Paul "the Plumber" Davidson, the British businessman cleared of market abuse in May, said he plans to use an electric device called a ``Noisy Charger'' to shock the Financial Services Authority into paying his legal bills.

If the FSA refuses to pay his costs from a three-year challenge to a record 750,000-pound ($1.4 million) fine, Davidson said in an interview that he will use sales of the Noisy Charger, which alerts people to unplug mobile phone chargers, to finance lawsuits against the agency.

Davidson challenged FSA claims he broke market rules when he used a 5-million pound spread bet as part of a complex plan to secure investments in shares he was selling. In May, the Financial Services & Markets Tribunal in London ruled Davidson had done nothing wrong.

"If they pay me, then I'll go," said Davidson, who uses the nickname "the Plumber" because he used to fit pipes. "But if not, I'm prepared to put forward a substantial sum of money -- millions of pounds I'll stick into it -- and I'll ruin them."

As well a suit claiming the FSA infringed his human rights, he may also sue FSA executives for misusing their power, he said. Davidson, who had represented himself during this year's trial, is looking for a "mega aggressive" law firm to handle the case.

Davidson estimated his legal costs at "a few million pounds." If he starts a lawsuit seeking damages, it will be for much more than that, he said.

FSA spokeswoman Eleanor Hughes declined to comment on Davidson's plans.

'Horrible' Sound

Davidson owns the patent to the Noisy Charger, which he is about to start producing in Italy, he said. The gadget fits between the plug of devices, such as mobile phone chargers or music players, and a wall socket. It makes a ``horrible'' sound ``like a doorbell'' when an unused charger is left plugged in.

The average mobile phone charger wastes about 25 pounds worth of electricity a year while connected to a power source and not a phone, he said.

Davidson said he expects the unit to generate revenue of 36,000 pounds a day. If it does he'll call a law firm and say ``come and move into my house with all your secretaries and I'll give you 36,000 a day until all this is over,'' he said.

The wager that led to the market abuse allegations was made with spread-betting company City Index on a business called Cyprotex Plc, just before it went public on the Alternative Investment Market in February 2002. Davidson owned 35 percent of Cyprotex, which screens compounds for drug companies.

Hedges

Because it was such a large bet, City Index hedged itself by buying derivatives from Dresdner Kleinwort Wasserstein, the investment-banking unit of Allianz AG, according to the FSA. Dresdner in turn hedged itself by subscribing to the Cyprotex offering. This was part of Davidson's plan to prevent the sale from being undersubscribed, the FSA alleged.

Spread betting allows investors to wager on both up and down share movements without the tax and disclosure rules involved in share ownership. A derivative is a financial obligation whose value is derived from interest rates, the outcome of specific events, or the price of underlying assets such as debt. Companies and investors use them to hedge against unexpected price changes.

Capital Spreads Market Commentary

Not much news overnight but the Nikkei managed to drop over 400 points which is probably going to define the opening levels in Europe. Massive volatility in Gold and Oil yesterday left punters scratching their heads and nursing their wallets.

This morning sees the FTSE called almost 30 off at 5672-74 which seems a little aggressive but our clients are selling all the way down. Confidence can definitely be classed as low. Mining and Oil stocks took the brunt of the selling yesterday countered by buying in virtually everything else. This morning should see some support for miners but the trend is definately not one for the Bulls in the early calls. With little information around a bit of 'contra' trading will bropapbly take place with dealers buying into any fall as the morning develops.

Today sees the start of the US monthly inflation data releases with the PPI out at 13.30 (expected at 0.2%) which may be another bearish indicator. The question is 'have US producers managed to push commodity price hikes through the chain'? The answer, if yes, will probably see another big sell off, and, if no, could cause a bounce. Late on we have consumer confidence at 22.00 (after the close) .

The US markets meandered up and down all day before closing towards the lows and this morning the general feeling of 'doom' sees us down at 10719-23 25 off from last night.

Burren Energy came in with numbers pretty much in line with expectations which will probably mean a sell off in early trade if recent history is repeated! The shares closed at 824p last night but the call this morning is at around 820p.

The Dollar put heavy pressure on the bears yesterday with and extended rally which pushed all three majors through major support levels. The Yen broke through 116.70 but failed at the second 117.30 level. Sterling went straight through 1.8300 and fell a further 120 pips before pulling up and the Euro likewise dropped before running into the 1.2500 support level.

Gold went walk about yesterday trading in a $30 (!) range. Firstly rallying $10 and then dropping $20. The catalyst was the comment from the Isreali military that the action would only go on for another few days. This gave hope to the markets with some welcome relief to the pressure (at the time the FTSE was 50 points off) and Gold Oil Copper Silver etc all came in for some very heavy selling. This morning gives little indication with Gold up $4 from last night at 650.8-651.8.

Oil (like yesterday morning before all the chaos) is quiet at last nights close. Brent is at 75.92-97 unchanged and likely to stay that way for the morning session.

I feel like I am in a time warp. How many times over the past thirty years have the words 'Middle East', 'tension' and 'mind boggling stupidity' formed part of an economic commentary.

Yet again Oil manages to come to the aid of Spread Betting companies (who thrive on volatility). Yesterday will not go down as one of our clients' finest hours. On a quick analysis of positions the only markets where traders did well was in Metals where clients have been heavily long for some time.

Investors seem to be looking for value on the off as the FTSE struggles to recover from an opening 50 point fall. Clients who had bought on the close last night were stopped out only to watch the market recover much of the fall. We are now at 5734-36 down 25 which adds to the near 100 points of yesterday. Technicals would suggest that if we can close above 5730 this evening there is a good chance of a relief rally but with markets the world over on the back foot Bulls will have to be quick to get out if the market continues to fall. 5690 is the near term target for the bears.

With Oil and Commodities soaring investors would be forgiven if they felt that the FTSE (chock full of Oil and Mining stocks) should really be doing better. Compared to the Dax it is. The German market has dropped 250 points in the last three days (4%) whilst the UK markets have 'only' dropped 150 points (2.5%).

My comment on oil yesterday morning that with the markets trading just above the 75.50 resistance at 75.77-83 was a trigger to go for $78 was meant as a medium term target. This morning we find that traders had already made the connection and had bridged the entire space in one day!! At $78 we ran into some serious profit taking as bulls said 'thank you very much' and sold out. The next target is substantially higher at over $81 and many traders will be looking for someone else to take us there.

Currency markets show that the Euro has broken the major support levels at 1.2690 BUT sterling (1.8300) and Yen (116.50) have not. This makes it difficult for sellers of the Euro to make much further headway unless you are negative on Europe vs. the rest of the world. The Euro is at 1.2664-66 Sterling at 1.8390-93 and Yen at 115.78-81.

With the overnight hike in Yen rates of 0.25% markets reacted as though this was unexpected(!?) and the immediate trading range on the USD/YEN of 80 pips seemed a little extreme. Dealers are now pondering where the BOJ is targeting in the future (1%, 1.5%, 2% ??...) .

Gold naturally rallied on the same tension that affected oil and we put on a nice little $10 yesterday, dealers will be taking some profits this morning as $664 is an old resistance level. Comments in the press about $1000 calls being heavily traded are more likely to be position holders leaking reasons to Buy!

The old up and down like a 'whores' draws' syndrome hits the markets again!! Each trading day seems to trigger an opposite reaction the next. A good day is followed by a bad and vise versa.

Yesterday the Dow ended over 100 points lower having traded in a down trend for almost the entire session and traders even managed to briefly push us below the 11000 level before some late buying just dragged it above the line. This morning sees the dow up 16 but this is not enough to help the FTSE which is looking to open 20 lower at around 5838-40. Clients have been short the FTSE but this morning most have taken profits and have taken overall long positions before the official open. For the last few weeks trading sessions the mid 5800's have shown good resilience and the market has tended to bounce from here.

The Dax is opening a bit weaker than the FTSE trading at 5588-90 down 50 as the Oil and commodity price rises affect it more than the UK index (due to the lack of any mining or Oil stocks) .

There are no major corporate releases today so we are on our own as far as indicators are concerned. In the US there are only initial jobless claims which are not really informative and are unlikely to give much direction. Overnight we will have the long awaited Japanese rate hike (probably) which should be announced at around 04.00 in the morning.

Currency markets had another, much bigger, attempt to break out of the current trading range this time to the downside (dollar buying). The massive support for the Euro of 1.2690-1.2710 looked like being broken as the currency pair traded down to 1.2675 but by the close we were back above support once more. This morning at 1.2716-18 we are still a little close for comfort but our clients are buying again hoping for a bounce back into the 1.28's.

Sterling was the heavier loser in yesterdays action but the support at 1.8300 was never seriously attacked and the late dollar selling has meant that we are now sitting comfortably at 1.8359-1.8362. Dealers will be hoping for a break out of the 1.8300 to 1.8560 range to generate some interest over the summer months.

Gold had a quite interesting time first rallying $13 then falling $15 before setting about $7 up. This morning sees some small buying from our clients adding to longs already in place. Gold is at 650.6-651.6. Oil hit new highs again! At 75.77-75.83 we are in new territory and are looking to power on once more. Support is now at the previous high of $75.50 and resistance target will be the continuation move higher at around $78.20.

I wonder if Gordon Brown was watching? George Bush having slashed taxes to levels most commentators (this one included) felt was too far to combat rising Fed expenditure had the last laugh as the deficit appears to be coming in an absolutely whopping $130 Bln under expectations. And this at a time when military expenditure is rising rather than falling.

The US markets which, until this little snippet of information hit the wires, had been gently falling to new lows on the day at around 70 points lower smartly about-turned and proceeded to put on a 'nice little earner' closing up 30 or so pips. This morning a bit of selling in the Far East as the Japanese ponder Fridays potential rate hike has taken some of the shine off the early expectations on the FTSE but we are still called up 40. Our 'up with the birds' clients are taking this as a selling opportunity with most action coming in at the opening levels of 5890-92.

The Dax is also putting on push up 35 from yesterday to open at 5655-57 up around 40. Mixed business here as clients who were short are being 'chased' out. Short term resistance at 5670 is the first target for bulls and bears will be eyeing the 5595 support which they had a small go at towards the end of regular business yesterday.

With the heavy trade volumes going through in April and May the LSE was able to post revenue increases of 25% which were slightly better than expectations. With the Nasdaq effectively holding a blocking stake in the company the likely hood of an unfriendly takeover (apart from them of course) has slipped and shareholders will be looking for a reignition of their interest. Without a takeover the shares look a tad expensive but the Nasdaq (whose shares have fallen 37% since April) have their own problems and may find it less easy to finance the deal at a reasonable price after recent fall in their own share price (Nasdaq shares have fallen 37% since April). LSE is up 4.5p at 1134.2-1137.8.

Burbery also reported strong earnings as Spanish, Chinese and US sales increased strongly. The 'slightly naff' (in the UK) luxury goods retailer is more than holding its own against the general Bloomberg Fashion Index which has fallen this year. The shares are up 5.5p this morning at 464.4-466.1 and clients are long looking for an attempt at the all time highs of May at 484p.

Currency markets meandered backwards and forward yesterday before closing largely unchanged which is where they remain this morning. An early rather weak attempt on the Euro support at 1.2710 was easily defeated and clients went long at this point and remain that way today. Euro is at 1.2759-61 down 14 pips but to be frank there is very little business at the moment.

Gold was the big mover yesterday breaking out of the trading range to the up side and continuing on to end almost $20 higher on the day. This morning sees us at the same level and clients are sitting on thier longs (as they should) given the lack of any sell signals whatsoever. At 642.0-642.6 dealers are quiet (as in most markets this morning).

Having looked weak on the previous few days Oil turned straight back round and gained a dollar to close in the Mid 74's, Bear speculators were caught quickly and the market is neither oversold or overbought. This morning at 74.51-74.57 is tempting to both sides but the bulls appear to have the upper hand for the moment.

The Americans attempted to reverse Fridays sell off in early trade but the selling pressure eventually became too strong and we closed virtually unchanged on the day. This morning sees the FTSE and Dax following suit with initial sell offs taking us heavily lower at 5665-67 on the Dax (40 lower) and 5875-77 on the FTSE 21 lower. The FTSE appears to be quite happy around the mid to high 5800's as each attempt to break away gets bought into or sold down to.

Crude oil has managed to dump off another dollar overnight and we are now looking for some new buyers to try to gain the height again. The sell off has brought some minor profit taking in Oil stocks with BP down this morning at 643.1-644.4 and Shell off at 1853.1-1856.9.

Marks have come in with good numbers but as is the case nowadays buying the rumour and selling the fact seems to be the favoured option with dealers. The Shares are off 7p this morning at 574.8-575.9.

Currency markets are the point of main interest this morning with dealers once more looking at the Euro support levels. The huge support / then resistance /now support again level at 1.2690 to 1.2710 is being eyed by the markets. Our clients seem to be of the opinion that the levels will hold and are heavy buyers at below 1.2725. With the current price at 1.2720-22 it will take a good effort to go lower but if successful could be a big fall out.

Sterling is not seeing so much interest today but it seems to have a few more friends with 1.8375 being seen as support and 1.8445 resistance. Over recent weeks the 1.8300 to 1.8550 range seems to have been the place to be and with heavy volume support and resistance we may find it difficult to break out. Although in the light trading volumes of this week a move could occur on small liquidity.

Gold Is still stuck in the 620 to 637 range mentioned ad-nauseum last week. At 627.4-628.0 it is difficult to get enthusiastic about either direction and a break is needed to confirm the next move.

Oil as mentioned is weak with little power shown in the attempt to move to new highs. In the absence of news, as has been commented on before, the price is more likely to drift lower as stocks are reasonably replete.

It was difficult to get too much of a handle on yesterdays price action as the markets drifted gently (but decisively) down all day. Aside from a short squeeze in mid evening on the US markets which reached the exact resistance level (11188) in the Dow investors were not to be tempted and our clients remained firmly in the Bear camp for the whole session.

This morning sees a bit of a relief rally on the fact that the Dow did not actually hold onto the lows of yesterday but with the Nikkei dropping 200 points there are just as many arguments for a continuation of the trend lower. The FTSE was called 20 points higher in early pre-market trading but has run into continued selling from traders and we are now only calling for 10 up on the 4.30 close at 5835-37. The Dax is trying harder at up 20 at 5639-41 but it did fall further yesterday as well.

Construction Group John Laing and developers Redrow and Bovis are all due to give trading statements this morning. Laing's statement that they are disappointed with the performance of Chiltern Railways after the reopening since closure by tunnel collapse (possibly due to a Tesco development) but that there may well be some significant compensation to claim. The shares have slipped from the year end highs at around 340p and are called 5p lower this morning at 281p. Bovis's trading statement is more usual saying that trading was pretty much in line and that the rest of the year was expected to follow suit. These days a report of expectations being reached seems to have become a signal to sell. Bovis is opening unchanged this morning at 821p still 10% off the levels of the pre May sell off.

Currency markets are trying to claw back a little of the dollar gains of yesterday. The perception of the dollar being in the middle of a very long term fall is hard to shake and with reports over the weekend that many central banks have been diversifying out of dollar into sterling and euro keeps this going. As is usual over reports like this they often move the markets in the opposite direction as dealers worry about who else is left to buy. Our clients remain long of the Euro but in two minds over the pound. The support of 1.2700 in Euro/dollar held very comfortably yesterday and with the ECB due to raise rates this morning by quarter of a point the cost of those longs should fall slightly. There is a possibility of a half point rise from European bankers and this is keeping dealers on their toes. 12.45 this morning is the time to be in front of your trading screens.

The MPC is also sitting today but we do not expect any hike this morning at 12.00 especially as the major hawk on the committee, David Walton, died last month.

Metals prices rallied again yesterday with copper now back up at $3.4000 up 500 pips Silver $11.43 up 9 cents, platinum at $1247.0 up $12 and Gold at 626.7 up $6. Depending on your viewpoint this is either the beginning of another huge commodities rally or just a re-correction bounce after the dramatic drops of May/June. Talking to some analysts last night they were of the opinion that the bull trend had not been breached and that worls wide demand would push us higher again. But the contrary argument is just as valid that at these higher prices construction and manufacturing will look for cheaper (man made) alternatives thus reducing demand. Data released from Germany shows that plastic piping sales have increased massively due to the high price of copper.

Oil made new highs yesterday and is holding on to the gains this morning dealers are looking for some inventory news this afternoon that could confirm the price hike. Current price is at 75.13-75.19.

North Korea sets off a few missiles and down we go. The FTSE is called 25 points off at 5854-56 after the Far East came in for some profit taking with the Nikkei closing at15523 down 130 but still 1500 points off the lows of mid June. Yesterday's price action in Europe showed how little volume was being transacted with the FTSE grinding down 35 points in the morning and grinding back up the same amount in the afternoon. We have seen some buying from clients in early business looking to pick.

Today sees the Americans back at their desks after the Independence day holiday. Early calls are for some 30 points off in the Dow at 11192-11196 and 4 points off in the S&P at 1274.6-1275.0. Today sees only one US economic release of consequence the Factory Orders numbers at 15.00.

With little to go on today other than vague worries over N.Korea we expect to see clients flattening their books over the next couple of trading sessions in preparation for the Non Farm Payroll Numbers on Friday.

Today sees upbeat trading statements from Tullow oil as profits and production hit record levels. The numbers were expected by analysts and we have seen a little profit taking this morning taking the shares down 3p to 390.3-393.0 for the September contract. Wimpey aslo announced record revenue numbers but again dealers are not very impressed. The shares are now 23% off the highs of March as investors worry about the strength of the housing market in the UK. Shares are quoted in early business at 456.7-459.9 off 3p as well.

Currency markets had a bit of fun overnight with dealers selling the dollar in early trade only to reverse direction just as dramatically. The dollar is putting on a bit of strength this morning as the Euro and Pound drift slightly. Euro at 1.2782-84 is not finding many friends at the moment and our clients are merrily selling into the fall. There is some minor support at 1.2760 1.2730 and then 1.2690 to 1.2700 (the big level). On the upside the obvious 1.2800 is proving difficult to hold onto and then 1.2825 which has been the cap of this current run up.

Sterling is weak versus the dollar this morning but holding its own against other majors. With support at 1.8410 to 1.8420 and lower at 1.8380 we may see some activity to attack this levels but with little news they should hold at least in early trading. The current price at 1.8440-43 is off 20 pips overnight but 50 off the highs in early trading. Resistance is at 1.8480 to 1.8500 and then at 1.8550.

Gold surged on the missile launches as investors hunted for 'safe havens' rallying $8 in Far East business. But our clients were quick to sell into the move this morning and we have now come back to 624.2-625.2 up $3. We may run into some heavier profit taking in Gold today as the impact of trading fears over Korea slowly reduces.

Oil surprisingly has moved in the opposite direction running into supply side profit taking. With US inventories coming out tomorrow we could have a more extended fall. Brent put in 8 straight up days before yesterdays falls and the price at 1.72.66-72.71 is poised for action in either direction.

With the Americans away the chances of anything startling happening today are remote. The FTSE put on a good performance yesterday as more merger and takeover rumours swirled around the markets.

We now have BT, Northern Rock, Bradford and Bingley, Morrison's, Lloyds, various power companies etc.. all amongst the rumour mills (and this is just the start of the summer break!).

But for today most dealers will sit back and enjoy the sunshine whilst it last. This will mean a bit of profit taking on the FTSE as we slip back below 5880 as we probably need something more to shove us higher. Early trading has the price at 5874-76 down 10 pips. The Dax is holding on to yesterdays closing levels with the index up 5 at 5708-10 and the American markets (open on the Globex futures exchange) are consolidating just below last nights finishing levels. The S&P 500 is slightly lower at 1277.1-1277.5.

As this is a US holiday there are only a few corporate numbers today (as it is not seen as good policy to be giving trading updates when a large number of your investors are on holiday!) so the initial moves in the markets will probably continue through out the day. Rank have come in with a less than glowing trading statement with worries over gaming revenue and the smoking ban in Scotland having an impact on Bingo revenues. Most of this was in the market already (as the shares performance since the beginning of the year shows) and investors were just happy that the numbers were not worse. With the stock off over 50% since the stat of the year a small rally today is some small compensation. Rank up 5p at 200.7-202.3.

Currency markets are quiet and will probably remain that way for the duration. All major crosses are unchanged this morning and our clients are not really too interested in opening new positions. Cable at 1.8436-39 Euro at 1.2809-11 and Yen at 114.58-61. Frankly it is difficult to make any kind of comment that will mean very much today. Gold at 62.2-62.8.

Gold is at the same levels as yesterday morning having traded in a tight range yesterday. This morning has seen almost no activity since 6 o'clock. With Nymex closed today focus moves to Brent Crude oil and after 8 straight up days yesterday closed (wait for it) unchanged on the day. Forming a nice little 'hammer' on the candlestick charts. Today we are up 21 cents but the aforementioned formation may worry chartists as it is often the sign that a market is about to turn Brent is at 73.47-52.

The summer weather and everybody is bullish. England's world cup knock out does not seem to have fed through into the markets with the FTSE called up 20 points this morning but this has more to do with a correction from Fridays close which saw 40 points drop out of the index in the last 20 minutes as dealers looked to close off longs before the half-year end. This caused a strange FTSE fixing which was immediately reversed in the futures after the Index had closed. This morning we have immediately run into sellers on the off as our clients take profits and look to set up shorts at around the 5950 level. Opening call on the FTSE is 5852-54.

The US markets struggled all day to make headway after Thursdays 200 point rally and with an early close this afternoon due to the 4th July bank holiday tomorrow. The Dow is called virtually unchanged this morning at 11189-93 up 10(ish).

With very light volumes almost certain over the next few days we may come in for some dramatic moves as illiquidity often drives markets much further than would normally be the case. One of the reasons for this is that it becomes easier to hunt for 'stops' set up in busier times and once these get triggered, in light volumes they have the habit of setting off more and more.

BP trading statement was a slight disappointment to our clients who were hoping for something slightly more upbeat. The shares are looking to open unchanged this morning but our clients are setting up sell orders. With oil now at such high levels many countries the UK included appear to be trying to grab ever more of the slice. This must translate into higher forecourt prices in the short term and therefore reduced demand for the product. BP is opening at 629.1-630.4. Cairn Energy also came with slightly disappointing numbers and the shares have suffered, falling some 2% to 2138.0-2147.0 (rolling bet).

Currency markets are now waiting to see whether they can turn the recent Dollar fall into a full blown retreat. With the Euro now securely above 1.2700 dealers will be hoping for further moves towards 1.30 and beyond. the major problem is that nearly everyone is long and we are now hunting around for further buyers to push us higher. At 1.2782-84 the market is quiet and does not look to be going anywhere this morning.

Sterling is pretty much the same but we have had a bit of selling this morning with Cable down 40 pips at 4.8450-53. There is small support at 1.8440 1.8430 and then lower at 1.8360.

Gold shot through 600 on Friday and is continuing its rally this morning. Clients are sitting long and seem to be happy to remain that way for the ride. Current prices at 619.7-620.3 are up $6 this morning. There is a volume resistance level just above here between 620 and 633 which would be an attractive level for technical traders. With both Oil strength and Dollar weakness Gold is finding investors once more. Oil is back above $74 for the first time in a while as the market extends it 8 day winning streak into a ninth. The ally has been slow and steady without any sharp 2 or 3 dollar surges and punters are out Bear hunting, looking for weak shorts to shoot and kill off. With the states away tomorrow Brent will either have a very quiet or a very busy trading session. Nymex is at 74.33-74.39 (Brent is at 73.77-73.82).

Markets were at their nasty worst yesterday tempting buyers in on the open only to drift lower throughout the day. There was almost no buyers 'moment' in the entire session in either the FTSE, DAX or Dow and we are now left in a kind of no-mans-land at 5650 in the FTSE, 5440 in the Dax and 10950 in the Dow.

In the FTSE all the popular technicals are telling us that 'its summer and what are you doing in a trading room'. Stochastics, RSI's, Bollinger Bands and popular Moving Average levels are all pretty much flat when it comes to indications as to possible future moves.

Opening levels were down on last night close but early buyers looking for some value have made up the drop and we are now in small positive territory with the FTSE at 5659-61. We would be doing much better if the mining sector was not heavily off this morning due to the heavy falls in Copper and Gold in late US activity last night.

Not much corporate news but what there is is on the flat side. Hanson reported a 10% rise in profits but the markets appear worried by the UK trading situation. The US seems to be taking the strain of the difficult UK trading conditions with growth in the North American division at over 25% counteracting the rather flat results over here. The shares are now almost unchanged on the year at 641.8-643.3 for the September contract having hit highs of almost 800 in March. Hays have also announced a trading statement and have gone with the normal 'in line with expectations' line. Like Hanson investors seem to have been looking for more and the shares are off 4p at 148.5-149.3 (September) a 2.5% drop.

Currency markets remain very very range bound as we grind our way towards the FOMC rate announcement tomorrow. The Fed is expected to raise by 0.25% to 5.25% but the market is waiting for the all important 'comment' that goes with it. If the indications are for further rate tightening the markets will probably react with some minor dollar strength but if there is even the slightest hint of an end the dollar could easily lose a couple of cents in a second or two.

Cable is at 1.8181-84 down 38 pips and the Euro is at 1.2566-68 down 15 or so. Both currencies have been at or around these prices for almost three weeks now.

Gold put on one of its stranger days rallying $11 to the resistance mentioned yesterday at 595 before running out of steam and closing down $3 where it remains this morning at 581.5-582.1. Copper reversed almost exactly the previous days rally to close at 3.0860 down 1500 pips (not a market for the faint hearted).

Oil is building a nice little volume area at 71.50 to 72.50 with our clients pushing first in one direction and then the other. Not much impetuous for either direction at the moment but a pucsh to the up side must be the more likely as sell offs are being quickly reversed. Current price is at 72.20-26 up 30 over night.

New additions at spread-betting group

Spread-betting group Sporting Index has announced the arrival of two new individuals to its board, it has emerged.

The firm, which also provides punters with casino and poker games, has made these appointments as it prepares to expand to an overseas market, the Sunday Times reports.

As a result of the reshuffle, former non-executive director of gambling company Betfair, Nick Irens, will become Sporting Index's chairman and entrepreneur Chris Akins is to take the role of non-executive.

Mr Akers is known for selling Sports Internet Group to BSkyB for £300 million in 2000 and Mr Irens is a non-executive at stockbroker Evolution.

They will help the company in its planned marketing partnerships and financial acquisitions, the newspaper indicates.

Currently, Sporting Index is receiving record levels of money in conjunction with this month's football World Cup.

It was reported last week that the company's turnover has been positive, yet the results have been unfavourable due to the lack of upsets in the tournament.

Sporting Index's Wally Pyrah told thisismoney.com: "Turnover has been really good so far but the results have been horrendous for bookies. The favourites won 16 of the first 20 games."

Capital Spreads Market Commentary

After such a promising opening yesterday it was our clients who called it right. With the FTSE showinng a 70 point rally we just ran into continued selling and as the day progressed punters were shown to be right as the entire move had been given up by the close.

The near 500 point move on the Nikkei was ignored as not relevant and traders decided to worry about inflation/growth/the OFT (in the case of BA) and general pessimism all round.

This morning sees the FTSE called some 5 points lower at 5680-82 in light trade and the Dax likewise unchangedish at 5533-35. Clients have decided to take most of their profits on the open and are now sitting back waiting for the next indicator.

US markets which opened so brightly yesterday spent the whole day on the back foot before closing down 60 in the Dow. Today is not likely to see much in the way of fireworks but with the markets in a contrary frame of mind where nearly every previous days move is reversed in subsequent activity do not be surprised to see a rally on the back of absolutely nothing today. The Dow is at 11028-32 up 10.

Goldmans appear to have found some more value in AB Ports and are now bidding around 910p a share (perhaps there is an oil well under their land!!). The value in the company (aside from the established port business from which it is difficult to see anyone extrcting more than the current management) is in its land portfolio but the ability to extract this value may take a very long time. Planning permissions etc grind exceedingly slow. Current price is 928.6-931.9 up 38p.

Currency markets put the boot in on the Dollar crosses yesterday. Our comments yesterday morning about the inability of the various crosses to make headway was borne out with a vengeance as traders gave up on trying to force the Euro through 1.2680 and Sterling through 1.8470 and reversed direction dramatically. Today sees two way business with clients buying and selling looking for an edge. Sterling is currently supported at around 1.8265 which may well form the base to today's activity. A break below here would open the way to 1.7940. If the markets can hold on then a bounce cannot be discounted but the weight of Dollar shorts currently in place around the world is making rallies ever more difficult. The current price is at 1.8291-94. The Euro is likewise well supported just below the market at around 1.2555 and then the absolutely massive level at 1.2510(ish) which defines the entire upward trend line. The current price is 1.2582-84.

The only US data out today is the Durable Goods orders number which may well be the catalyst for the next shift in currency markets. A weak number would put pressure on the dollar and may re-instate the bull trend. But a strong figure will give Euro and Sterling Bulls a few worries. The figure is at 13.30 and is expected to be +0.4% from last months -4.8%.

Metals suffered from the dollar strength and had a bit of a tough time of it yesterday. Gold had been pushing for $600 but the reversal in the greenbacks fortunes set the slides in place and we shifted smartly lower over the day. From a high in the morning at 595 the price dropped to close at 581. Today we have small buying interest once more and the price has drifted higher to 584.0-584.6 but interest appears muted.

Silver seems to have decided that the $10 level is fine for the time being as volatility continues to fade. After the wild swings of March April May and early June the price has stayed remarkably static for 7 or 8 days now trading between 9.65 and 10.45. Today is slow as well with opening prices expected to be around 10.19-10.22.

Oil gave hope to both bulls and bears yesterday before closing almost unchanged. The market is very much undecided and at 70.68-70.74 is poised to go either way. Our clients continue to shun the black gold market with only minor positions being taken.

The Nikkei has managed a 3.3% (over 450 points) rally overnight which has put a bit of a rocket up the Europeans on the open. The FTSE which last night was estimated to be going to open around 10th 15 higher due to strength in the US is now being called 50 higher a number which has pulled some sellers into the game. As mentioned yesterday there is a minor resistance at the 5710 level with heavier strength at 5750 (ish). The call on the open is for 5713-15 which will either prompt some profit taking or kick us off into a move to the next level.

The Dax is trading at 5562-64 up 55 on the close with short being squeezed out of positions.

The catalyst for the general move appears to be a more benign outlook concerning interest rate intentions in the Far East where investors are worrying about the end of the Japanese zero rate policy. We all know that effective zero interest rates cannot go on for ever, although after so many years it seems like it, but traders still fear the effect on sentiment. What seemed last week like an imminent Japanese shift after South Korea and China tightened has now been discounted (at least in the short term).

The S&P and Dow put on a goodish show in yesterdays trading but closed well off the highs of late afternoon. The close in the Dow of 11079 was up 105 but was briefly quoted at 11129. The S&P similarly gave up some points at the close drifting from 20.0 points up to close just 13.0 higher. This morning both indices are taking heart from the overnight move and are quoted at 11108-12 and 1255.2-1255.6.This afternoon at 15.00 we see the US leading indicator numbers not one of the biggest or most followed in the past but in today's volatile conditions any scrap of information is greedily fed upon. We expect -(minus) 0.5% down from -0.1% as the slight slowdown in US growth takes hold.

Currency markets are not favoring the Dollar this morning which should continue to help Gold rise higher. The Euro continues to grind slowly back up but the effort involved appears quite high. The recent lackluster trading ranges for all the currency crosses indicate that there could be a dramatic move in either direction soon. In the Euro the catalyst would be a break and close above 1.2680 or a failure of the current slow rise (probably a close below 1.2540) the current price at 1.2673-75 would seem to favour the former but we are seeing heavy selling at this level. Sterling is also benefiting from the recent dollar weakness but is struggling to break higher than 1.8470. The current price of 1.8454-57 does not appear to be attracting either buyers or sellers in any numbers.

Gold screamed through the resistance at 580 to close at $589 and is $5 higher again this morning as bullion dealers regain their composure. At 593.8-594.8 we will probably see at least an attempt at $600 over the next few trading sessions.

Following the example of other Commodities and taking the inventory numbers into account Oil managed a good day. The inventories were actually slightly higher than forecast but obviously sellers were already in place before the release and the sharp move lower on the numbers ran into a wave of profit taking which eventually pushed us a dollar higher on the close. This morning sees a further 50cents up at 70.91-70.97.

Cantor, Finspreads Say Stock Volatility Helps `Spread Betting'

The month long slump in global stock markets has been a boon to U.K. speculators who prefer betting to trading, and to the companies that help them bet.

The surge in market volatility since prices peaked has meant more opportunities for short-term traders who use ``spread betting,'' or gambles on moves in financial markets. The winnings from such wagers aren't taxed in the U.K., unlike the profit from the gain on a security purchase.

"It has been a dream market if you know how to benefit from it,'' said Nick Macdonald, 26, an independent trader in London who said he has made money betting on fluctuations in currencies and U.K. and U.S. equities since stocks peaked. ``When the market turned, it was absolutely golden.''

Companies that are profiting include London spread-betting firms Finspreads, owned by the U.K.'s IFX Group Plc, IG Index, a unit of IG Group Holdings Plc, and Cantor Fitzgerald LP's Cantor Index Ltd. Business soared amid the volatility, the firms said.

Stocks globally plummeted as much as 12 percent from a six- year peak set May 9, based on a Morgan Stanley Capital International Index as of June 16. The U.K.'s FTSE 100 Index lost as much as 10 percent from its recent high and the MSCI Emerging Markets Index sank 25 percent. Spread bettors can also wager on commodities too. The Reuters/Jefferies CRB Index of 19 commodities dropped as much as 9.6 percent from its record set on May 11.

Price Moves

Spread bettors, who gamble on stock moves over the course of hours or a few days, have had more opportunities to trade on abrupt swings. For example, shares of Lonmin Plc, a London-based platinum producer that Macdonald bet on last week, rose or fell 4 percent or more 19 times in the past month. In the previous month, it moved by that amount only eight times.

Measures of expected price swings in the U.S. Standard & Poor's 500 Index and Germany's DAX Index, standard gauges of market volatility, jumped to the highest since August 2004.

"Bet numbers have increased by 50 percent; it's been pretty unbelievable,'' said Angus Campbell, head of sales and marketing at Finspreads. ``We have seen unprecedented levels of business going through.''

IG and Cantor declined to quantify how much betting has increased. The Financial Services Authority, the U.K. market regulator, doesn't track such statistics, said spokesman David Cliffe in London.

IFX, the parent of Finspreads, said in a statement last week that its daily bet numbers, average stake values and customer funds increased in the year ended March 31. The company had 8,279 customers, up 13 percent. The new financial year has begun ``very strongly,'' with profits ``very substantially ahead of management's expectations,'' the company said last week.

Beating the Market

IG Group said last month that revenue in the year ended May 31 probably rose 37 percent after the company won new customers and more bets were placed.

IFX shares are up 31 percent this year and IG has gained 13 percent, while the FTSE All-Share Index has risen 0.6 percent. New York-based Cantor Fitzgerald is closely held.

Unlike a stock trader, a spread bettor who wagers that a stock price will rise or fall never takes ownership of a security. All that's required is a deposit of a small percentage of the bet's value, making the wagers riskier than a stock purchase. If the bet loses money, the firm through which it was placed will demand more money to cover the losses.

The risk of trading with what is effectively borrowed money means spread betting isn't for the faint of heart.

"It is just another form of gambling,'' said Charles Geisst, author of "Wheels of Fortune: The History of Speculation From Scandal to Respectability'' (Wiley, 368 pages, $16.95). "Most people who use this are just in it for fun and games. I think it has more elements of gambling than a legitimate form of hedging because of the leverage involved.''

Bucket Shops

Bettors pay no commission, as they would with a trade through a brokerage. As with futures and options contracts, some investors use spread bets as a hedge to offset some of the risk in their stock portfolios.

Spread betting isn't new. Stuart Wheeler founded IG Index in 1974 in the U.K. to speculate on the price of gold.

In the U.S. in the late 19th century, similar betting operations, known as ``bucket shops,'' cropped up in New York and Chicago, enabling the working class to place bets on live prices from stock exchanges, said Geisst, a professor of economics at Manhattan College in New York. By the 1930s, bucket shops were forced out of business after new securities regulations were introduced following the 1929 market crash, he said.

The current market pullback falls far short of the crash that sent the U.S. plunging into the Great Depression. The biggest risk to spread betting firms now may be that market volatility subsides again.

"We have done loads of business,'' said David Buik, a manager at Cantor. "People who have been betting on the market over the last 4 1/2 weeks have been very successful.''

Capital Spreads Market Commentary

The FTSE this morning is now down 20 points reversing yesterday's gains. Dealers are very much on the back foot looking to see where to get in on a possible recovery only to find the market rejects the level on the next move. At 5636-38 we are nicely above support levels (at 5500 and 5450) but unfortunately quite some way of challenging to go higher. Resistance is very solid at 5680 to 5700 and then the major top at 5750.

The Dax, which yesterday tried to put on a nice 100 point rally has now given up half the move and is now back at 5453-55 and finding more sellers than buyers in early trade. Support remains well below the market at 5380 and then 5315 and 5250 (the low of the recent falls). Resistance is strong at 5510 (where we failed yesterday and this morning) 5560 and higher at 5590.

US markets will continue to suffer whilst indecision over the future for inflation and, by association, interest rates. Yesterday saw the Americans attempt to push higher before dealers decided to take profits and we closed pretty much unchanged in the Dow and S&P. This morning sees little change as the summer seems to have finally arrived in the markets and trading volumes reduce. Oddly enough the quiet summer months can be very volatile as low liquidity finds market moving rather easier. The S&P is now at 1240.2-1240.6 and the Dow at 10986-90 unchanged this morning.

Currency markets are following the trend with little interest from clients and little movement in the markets. With no serious data this morning we are unlikely to see any dramatic moves today. Cable at 1.8437-39 is where it was for yesterdays comment but the Euro has drifted slightly higher this morning at 1.2617-19 as bulls attempt to push us back into the volume trading range of over 1.2680.

Metals and Oil finish off the overall impression of quietness with clients long of Gold and looking for a break above $580 where we failed last week. This morning sees us up $2 at 577.3-578.3. And oil is 50cents off yesterday's commentary at 69.07-69.13 with little trading range activity seen over night.

The American markets appeared to be worrying about inflation again yesterday giving up some of the recent rally but still bouncing around as rumour and counter rumour hit the the markets. The Dow ended down about 70 points and is pretty much unchanged in early trade this morning at 10944-48. The late fall in the Dow and S&P has meant that the FTSE has opened some 20 points down but clients are continuing to buy at these levels having briefly gone short at the highs of yesterday. Currently trading at 5607-09 dealers minds are more likely to be focusing on the Sweden game this evening and we may well find that the markets grind to halt in mid afternoon.

United Business Media announced trading in line with expectations and the shares are unchanged on the day. The price has suffered in recent months as spending appears less robust than hoped over the spring summer. Business media spend is very much aligned to market conditions and the recent bear move in equity markets will not have helped. The shares are now at 636.7-640.3 for the June contract down 1.3p today and some 14% off the highs in April

Currency markets are very flat today pretty much stuck in the trading range of yesterday. With no US data (of consequence) due today it is unlikely that there will be a significant FX move on the day. Cable is trading at 1.8444-47 up 30 pips but the Euro is completely unchanged at 1.2582-84, yesterdays comments remain in place with dealers waiting for a break out either way against the dollar before getting too involved.

Commodity markets are rushing around here there and everywhere but on the close we always seem to be pretty much where we started from. Gold a 570.0-571.0 is up a dollar and Silver at 9.94-97 is much quieter that in previous weeks having paused for breath after the big drop of last Tuesday the last few days have seen a range of just 40 cents.

Oil is slowly slipping with bull moves achieving lower highs each time. $68.80 seems to be a good support which if broken could presage a move to the Mid to Low $60. Current price for August Nymex is 69.61-67.

With very little in the way of economic data this week markets will be looking elsewhere for their inspiration. This morning we have the FTSE called up 25 points at 5621-23 as buying after the close on Friday pushed us higher. The Dax also rallied after the 4.30 close and will open 30 up at 5403-05. US markets are being a little less encouraging after giving up the ghost in late trade on Friday turning a reasonable move up into a flat day overall. This morning the Dow and S&P are slightly lower again both down about 15 pips at 10997-11001 and 1248.3-1248.7. We are seeing solid buying this morning in pre-market activity as dealers take heart from the post Friday close activity.

Lloyds (LLOY) have come in with their usual steady as she goes statement and this is likely to satisfy investors. The company remains very much UK focused, even though there is a move to more international business, and most of its profit growth comes from UK corporate lending. The bank remains a takeover target which makes it difficult to value in real terms but the dividend yield will continue to attract longer term investors but ex div dates continue to be closely watched by the markets. 9th August is the next one. Over 6% yield and a rising share price are difficult to turn down! Lloyds closed at 527.7-528.8.

ISoft(IOT) are in the news again with a rumored offer for the company of around £200M. The shares have been absolute murder for our clients who have not foreseen the current troubles as the management first states business as usual (back in April) and then gives profit warnings a month or so later and subsequently admits that even the profits of past times would not have existed if current accounting rules were in play. The Market Cap on the close was around £145M and hard pressed investors would probably welcome some relief from their pain. Shares closed at 62p on Friday.

The Dollar gained some strength overnight with sellers in the Far East after further comments about Japanese, South Korean and Chinese interest rates. Cable is hemmed in at the moment between 1.8535 and 1.8410 and traders will be looking for a break of either direction before getting heavily involved. The Current price is 1.8456-59 down 40 pips on the day. The Euro is likewise moribund between 1.2525 and 1.2670. Bullish Dealers continue to hope for a return to the 1.2700 to 1.2980 range that held for most of May and the bears are conversely looking for confirmation of the failure of the bull move which would be confirmed by a close below 1.2475.

Gold is opening $10 lower this morning as the Far East worried about a strengthening dollar. At 569.4-570.4 we can expect to see buyers in Europe who will be hoping for a move back above 575 as the first target.

Oil is not showing much volatility at the moment as traders try to get a handle of the current state of World stocks and production. The longer term play is looking increasingly bearish as reasons for buying higher continue to ease. Current price of the August Nymex is $69.72-78.

Markets on the slide again yesterday which was not actually that surprising given that we are now in the inflation data portion of the month. At the moment all the talk is of fears of an upsurge in inflationary pressure from a variety of quarters. In the UK, rather uniquely, the pressure is coming not only from commodity price hikes but also from the increasing squeeze from HM tax inquisitors. Salaries and Jobs in the public sector have increased out of all proportion to the countries ability to pay for them and we now have the strange situation where pay in the Government sector is higher than in the private one and this is before you take into account guaranteed pensions and job security not available outside pubic office.

The tax take is now at such a level that many companies are rather more vocally stating that unless something changes they may move to a more business friendly environment. This does not bode well for the long term prospects of the FTSE 100 and 250.

The FTSE this morning is opening pretty much unchanged at 5521-23 although the US has managed a bit of a rally overnight. With Gold, Copper and Oil continuing to fall Mining and Oil stocks will be opening on the weak side. To counteract this Banking and Telecoms are on clients buy lists this morning. Having said this the market is still incredibly volatile with up days and down days being very violent indeed. The Dax is called up 10 at 5302-04 and the Dow up 30 at 10734-38.

The dollar had a good day yesterday but is running into some selling this morning with Cable up 70 at 1.8400-1.8403 and the Euro up 40 at 1.2579-1.2581. Short term Momentum indicators tell us that the Euro must regain the 1.2700 level by the end of the week otherwise the current bull move will have run out of steam and traders will start looking for targets to the down side rather than the up. The dollar has put on some 5.5% from the lows versus the Yen over the past few weeks and with the cost of carry of short Dollar positions being 5% a day (over 1.5 pips charge each night) dealers are finding it difficult to hold onto dollar shorts. Dollar/Yen is at 115.02-05 with heavy resistance at 115.45 and then 116.20 and minor support at 114.75 and then not much until 113.50. The charts would seem to indicate that the easier direction for movement in a quiet market is down.

Gold managed its biggest one day move since the 80's yesterday as long were well and truly ripped apart, we are now back in the $533 to $575 range where we spent much of Jan, Feb and March. Trading volumes in the spot and futures pits would seem to indicate that an enormous sum of money has been won and lost over the past two months both in the massive rally and then in the subsequent fall. Reading the analysts comments this morning they are all still calling for a return to the bull phase (for a variety of reasons) which as I have commented before would seem to indicate that there are a large number of long term holders sitting on poor positions. Yesterday probably cleared quite a few of these out which may give us some relief in the short term but $533 is calling strongly now. Overnight we actually traded below $550 but the price is now 559.8-560.8.

Oil fell again yesterday and we are now out of the consolidation trading range of $69.00 to $73.50. Oddly enough there is a minor support level right where we are now at 68.10 but the bears seem to have the reins at the moment and unless there is some more poor political news the price action would appear to be negative. Nymex is currently at 68.20-26.

And down we go again. Worries this time from the Far East as dealers sell out the Nikkei even more with the 225 now over 3000 points from the highs of April and reaction to the late, post Europe close, sell off in the US markets means a rather dramatic 75 points off in the FTSE this morning at 5543-45. The Dax has broken the long term up trend and could well fall significantly further if traders decide to enter a bear phase. At the moment all we can say is that the Bull run is broken and we are in neutral territory.

The FTSE is perilously close (once more) to the long term bullish trend line at 5540. So far we have hit this level twice in the last three weeks and both times the market has reacted violently to the up side with buyers reckoning on this being a major support. This time we are spending rather more time down here and day traders may be tempted to go on a bear hunt looking for stops below 5530.

The US markets closed near their lows and are lower again this morning with the Dow down another 30 points. The Dow has good support below here all the way to around 10720.

Royal Bank of Scotland have disappointed traders with their trading statement as fears over a possible of shrinking margin on loans wieghs on stock holders shares are off 56p at 1715.0-1718.0.

Currency traders are sitting back and watching the rest of the markets with the Euro Sterling Dollar and Yen all pretty much unchanged although slightly favouring the Dollar. Cable at 1.8420-23 is finding little interest from our clients but there is steady buying of the Euro in defiance of the current trend as punters look for a bounce back to the 1.2700 area. The Euro has definitely broken the range of 1.2700-1.2980 and unless it can return to this level very soon the prospects must be for a swift retracement into the low 20's. Current quote at 1.2565-67.

GOLD! having done almost nothing yesterday the yellow metal is down some $12 this morning finally breaking the $600 level which has been the target for the last week. As mentioned yesterday there are now a significant number of medium to longer term traders who are sitting on the wrong side of this move and the overnight shift lower will not make happy reading this morning. It would appear that there were some significant seller just below $600 which could indicate that many weak longs have been chased out of positions. Expect 'bottom pickers' to appear in the metals over the next few days which could give us some support. Current price is 593.2-594.2 and we are seeing buyers at this price.

Oil disappointed investors buy giving up on the $70 level this morning and dealers will be worrying that in this generally bearish market in virtually everything that oil may also catch the virus and start to slip. That said we are still in the current trading range and it would take a close below $69 to break out. July Nymex at 69.77-69.83.

The FTSE looked to open some 20 points lower reflecting the sell off in late evening trading on Friday but buyers were immediately in evidence taking us swiftly into positive territory. The market is now just up on the day at 5656-58 with our clients on both sides but as expected in World Cup month volumes are slower than April and May. The Dow has recovered from Fridays late sell off and is now back in the middle of the days price action. Again, with the market at 10922-26 dealers appear to be undecided as to which way they want the markets to go.

With very little on the corporate news front interest will be concentrating in the takeover and float speculation still swirling around the markets. Goldmans syndicate is rumoured to be increasing its bid on AB ports to 810p but the shares are still around 775p and Standard life which has spent an age in coming to the market has managed to pick the one poor moment in three years therefore causing a drop in the float target price from around 220-240p to 200-220p.

Currency markets are moving against the Euro this morning with dealers worrying about the markets lack of success in retaining the 1.2700 to 1.2980 range lost on thursday. The move lower came as some surprise to traders who were mainly concentrating on an attack on the top of the range rather than the bottom. Chartists, having spent most of the last few months talking of a huge dollar bear market, are now wondering whether the price action is showing a huge head and shoulders formation going back to 2003 which would (if confirmed) indicate a move back to 1.0800 (!). Of course the probability still favours a return to a Dollar bear scenario but everything is not quite so certain. Current euro price is 1.2615-17 down 30 and support is at 1.2590 and 1.2540 and resistance at 1.2670 and the huge resistance turned support now turned back into resistance level at 1.2690 to 1.2700.

Cable is quiet as dealers concentrate on the Euro and the current rate at 1.8415-18 is almost unchanged over the w/e. We are bang on minor support at this point which if broken could indicate a move lower to 1.8320 to 35 but we really need to see a close below 1.8400. There is a bit of a gap to the upside with not much volume trading ranges until around 1.8510.

Gold is slightly weaker again and dealers are not too confident at the moment. We got to 602.0 low this morning with short sellers eyeing the $600 level as the first target. As mentioned before, although we are $125 from the highs we are still actually in a bull trend. The upward bullish trend line is now at $590 and is critical if precious metals are to continue on their upward run. There are now alot of people who are 'long and wrong' above the market including, if rumour is to be believed, quite a few hedge funds. Current price is 606.1-607.1.

Another day another turn around. The FTSE is now opening at some 70 points up on the day and the market is looking to have found some supporters in the low 6500's. Yesterdays price action saw the market hit the long term upward trend line for the second time since this sell off started and for the second time it has reacted violently and bounced straight back up.

The FTSE is now trading at 5630-32 and our clients are continuous buyers at the moment. The Dax is also seeing good buying interest as investors, likewise, look for value amongst heavily sold stocks. The Dax over performed the FTSE in the early months this year but it is making up for it by over performing on the way down as well! It is 700 points off the highs at 5455-57 whilst the FTSE is 'just' 500 away from the peak. Oil and Banking have remained reasonably strong which has helped to offset the mining stocks 20-25% drop.

Last night saw the US markets stage a late rally as Oil drifted below $70 but in the last 20 minutes the Dow actually fell 70 points and dealers are still wary of holding too much on the overnight position slate.

No corporate trading statements this morning but that would only get in the way of the euphoria anyway. This afternoon at 13.30 we see the US trade balance which is expected to come n at $65B dollars for May. Just 4 digits to express such a huge number. It is now some 17 years since the US actually record a positive trade balance (it might be longer but my data only goes back that far!) and with the huge budget deficit as well we can see the current worries over the dollar. But don't be too alarmed by this kind of talk, economists/analysts discover (!!??) this fact about once every few years or so and talk about it ad-nauseam for a while until the next big thing arrives.

Currency markets are actually completely unchanged from last night Our cable price is 1.8427-30 exactly where it closed at 21.00. This is seen in all the other crosses as well. The FX markets are likely to remain quiet now until the figure this afternoon.

Gold makes yet another attempt to reach the magic $600 level. Get ready for some dramatic buying from punters stunned to see it back down here but don't get too carried away, with price action like this we are likely to encounter a Bull trap every now and then as dealers try to call the low. Gold is now at 604.5-605.5 down another $6 this morning.

Oil managed to bounce back above $70 in late trade last night but sellers are coming out again. July Nymex is at 70.16-22.

Ouch, South Korea raises rates and the world goes mad. The Nikkei, reacting to the probability of a BOJ reaction, lost over 450 points last night. The FTSE DAX and Dow are all called some 100 points off on the open today. Whilst the world worries about US economic fundamentals there is still time for some economists to point out that if America has a problem the UK has them in spades. The UK's similar budget deficit is in a high taxation environment (the US in a low one) the UK has a high trade deficit with very little industrial production (the US has ditto but with a sizable industrial base) if the UK service sector slows the consequences of carrying such a massive public sector will become all too obvious.

Dealers are getting ready for an exciting time on the opens with early calls on the FTSE at 5600-04 and Dax currently at 5434-38. The major support in the FTSE is now at 5534.

This morning will all be about damage limitation. Clients who are long will be praying for a bounce and clients who are short will be thanking their lucky stars and probably taking a few profits.

For Europe not much has actually changed as most countries were already in a tightening stance. But the perception for investors is being continuously damaged as markets jerk downwards violently after every rally. This remains a market where traders can make good money but they must be quick to get out when things turn against them.

Currency markets are likely to sit out today as investors watch the equity/bond markets. In times of trouble dealers used to head for dollar based assets (and there is still a smidgen of this in the wind) but this time the dollar is perceived as part of the problem. The US consumer seems to be finally grinding to a halt after years of being prematurely declared dead we may finally be seeing the beginning of the wake. And the US debt levels appear to have no prospect of reduction whilst President Bush is busily cutting any tax he can get his hands on.

Cable is down some 40 pips this morning at 1.8510-13 . The Euro is still in its trading range of 1.2700-1.2980 and shows no sign of wanting to break out. At 1.2761-63 we are off some 35 pips today but traders are very much two way at this time.

Gold continues to bounce around yesterday attempted to push towards $600 but ran into some late buying to close almost unchanged. This morning we are once more probing the downside at 621.2-622.2.

With political problems in Iran falling slowly Oils risk premium was beginning to look a bit excessive and dealers reacted by selling it off. We are still above $70 this morning but sellers are definitely holding the cards at the moment. Current price is 70.11-70.17 down 70 cents.

Hopes that the commodity markets may be about to slow down a bit were dashed over the weekend as some bullion dealers commented that Russia (amongst other nations) was building up levels of Gold reserves well beyond expectations. Mind you the fact that this announcement came after the market had fallen some $120 may give pause to the cynics amongst us!

The early call on the FTSE is for some 20 pips higher but our clients appear to be less than impressed and sellers of all indices are coming out of the woodwork. We now seem to be in an odd situation where any serious rally gets sold into and any big fall get bought. This is causing big daily changes in expectation and is making serious investing very difficult indeed. Talking to one of our more active clients he was basically saying that he was getting out of ant losing positions very quickly indeed but on the other hand he is sitting on winners for much longer than normal even if he cannot see any reason for further improvement!

FTSE is called at 5773-75, Dax at 5685-87 and the Dow at 11215-19. As mentioned we are generally seeing sellers in early trading.

Currency markets having smacked the dollar over the Non Farm Payroll are pretty much range bound this morning. Sterling has resistance at around 1.8860, 1.8880 and further away at 1.9000 and support at 1.8810, 1.8800 and 1.8775. Current level at 1.8850-53 is seeing 2 way action with buyers and sellers fighting it out. The Euro continues to make progress as the fears of a pause in the dollars falls seem to have been answered over the last two days. We still have the heavy 1.2970 to1.2990 resistance to break through and with the current price at 1.2960-62 we may be in for an interesting day. A break will see the market scoot on up but a repeated failure may well see longs take profits and push us sharply lower. Best guess is to sell at near to 1.2970 with a tight stop reversal just above 1.2990.

Gold is well up on Friday's close which itself saw a good reversal of the fall to $620. Current price is 642.9-643.9. We are back above the technical support/resistance at 636. The long term bull run is still well intact with the rising support at around $585 not even vaguely coming under pressure in the correction.

Oil appears to have done its consolidation period and is now pushing for new highs. Traders are now getting longer (cautiously) eyeing the recent $75 highs and beyond. Current price of 1.7335-41 is 120 cents up on Friday.

Markets continue to act like the old quip about 'whore's draws'. Up one moment down the next. Dealers are being pulled into Bear traps one day and a Bull Squeeze the next.

This morning has the FTSE called up 45 points which even by recent standards is a pretty impressive opening call. At 5781-83 we are now only some 350 points off the highs which definitely comes under the heading of a bull correction rather than a bear move. But the problems that triggered the initial falls havn't gone away if anything, on the energy front, they have got worse as the producing nations continue to flex their muscles.

Yesterdays US numbers were the trigger for the rally as before this the markets were settling in to be down on the trading session. Oddly enough the numbers from an economic viewpoint with every single number being on the lower side of expectations but investors decided to concentrate on the fact that this will probably mute Mr Bernanke's hawkish colleagues in the Fed. With 5% now looking increasingly like the top (give or take a quarter percent or so) longer term traders are trying to look through the current tight rate environment. The Dow is now at 11254-11258 only 3.5% off the recent highs.

Today of course sees the NON FARM PAYROLL numbers out at 13.30 which are still just about considered to be the most important of the US economic releases. This will probably mean that after the initial surge this morning the markets will settle down until then. Expectations are for 170K which continues the slow fall in forecasts on this figure. Like all numbers it can be taken in several ways a weak number may be bullish as rate expectations turn more dovish or it could be negative if dealers decide that it may indicate a slowing economy which could impact corporate profit margins. And if the number is strong the exact opposite applies. With markets very much in flux it is more difficult than usual to pick which way a number will be perceived.

Currency markets having rushed around on yesterdays data are very quiet this morning with little activity in either direction. With the numbers out this afternoon it is pointless to talk of direction as this will be dictated at 13.30. Cable is at 1.8637-40 unchanged overnight. Euro at 1.2805-07 back above 1.28 but again finding little interest.

Gold has now fallen all the way into the $620's from the highs just a few days ago at $730. As mentioned yesterday a break of $636 could indicate an end to the current bull phase but the long term bull run would not be harmed unless we went below $585 still $40 away. The current price of 625.9-626.9 is unchanged from last night. Copper also fell heavily yesterday, down 1400 cents to 34750 but still looking strong a close below 33300 could indicate a top formation and dealers will be watching this level closely.

Oil remains just above $70 and dealers are very much two way with sellers convinced that Oil will continue to reject the $70 level whilst bulls believe that we are building a platform for the next move higher. Nymex is at 70.66-70.72.

Spreadbetters catching World Cup fever

Spread betting on the World Cup, a high-risk form of gambling with potentially no limit to the gains and losses to be made, is rising steadily ahead of next month's kick-off, gaming sources say.

They report a 15 percent increase in spread bets so far compared to the last World Cup in 2001, and expect the amount staked to rise sharply once the competition starts on June 9.

The fundamental difference between fixed-odds betting and spread betting is that, with the former, if you bet 5 pounds all you can lose is your 5 pound stake.

With spread betting, the bookmaker offers an upper and a lower option for any given bet -- the difference between them being the spread -- but there are no fixed odds so the potential upside and downside are not defined until a result is known.

Chris Shillington head of media for sports betting at Cantor Index, says most of the pre-tournament betting has been coming from experienced gamblers.

"By that I mean that the betting isn't just centring on England," he said. "We expect the more emotional 'England bets' to start flooding in when the games start."

Most money at the moment was going on the World Cup 100.

Under this system, points are given for how far a team progresses in a tournament -- so 100 points for winning; 80 points for reaching the final, 60 points for third, 40 points for fourth and 30 points for reaching the quarter finals, with this sliding scale continuing to the group stages.

The spread being offered on England currently stands at 37-38 points, which assumes they will reach the quarter finals but not go as high as fourth.

So in theory, if a bet were laid at 10 pounds a point and England won the World Cup then the return would be 10 pounds for every point up to the 100, minus the top end spread (in this case 100-38 = 62) so 62 times the 10 pounds stake: 620 pounds.

What the gambler is saying here is that he or she thinks, unlike the spread forecast, that England will not go out at the quarter finals but will go all the way and lift the trophy.

The spread suggests 38 points is realistic for England so the person laying the bet receives 10 pounds for every point above that. Since the cup-winner registers 100 points, the gambler is 62 points up on 38 point forecast, hence the 620 pound payout.

The flipside for this is that if England shoot themselves in the foot again, the spread better loses 10 pounds for every point below the bottom end of the spread.

So if England went out at the quarter finals registering a modest 30 points, the registered loss would be 70 pounds.

For comparison, the spread currently being offered on favourites Brazil stands at 55-56 points.

LIGHTER BALL COUNTS.

Shillington said canny spread betters were looking at changes to equipment and refereeing at this World Cup to influence how they were betting. The different ball this time for example has attracted much attention.

"Using a lighter ball that apparently allows more spin and is harder for goalkeepers to deal with, has persuaded many to bet on an higher number of goals than four years ago," he said. The spread now stands at 160-161."

Another popular bet is the number of yellow and red cards issued by referees.

"I think the shrewd betters are looking for last minute FIFA statements that call for a clampdown on diving, unprofessional conduct, tackles from behind and so on," he said.

"These last minute statements from FIFA are frequent occurrences and often put pressure on referees to issue more cards."

The current spread for yellow cards stands at 274-278 with the total red card spread standing at a much more modest 18-19.

Predicting the timing of events -- most notably the fastest goal or fastest booking -- are always a lucrative bet but not for the faint-hearted, according to Andrew Jacques, an active spread better from London.

"To a certain degree I think predicting the number of goals in a tournament can be backed up by looking at previous statistics and then analysing forthcoming tournament fixtures," he said.

"But the fastest goal is very hard to call. It could be 40 seconds or it could be 4 minutes and if you have bet 10 pounds for every second above or below a spread of 101-103 seconds, which is currently being offered by the indices, you could really take a big hit."

Jacques said it was important for spread betters to understand this potential downside, but insisted there was plenty to recommend spreadbetting too.

"With traditional bookmakers it is often very hard to find any value in the fixed odds but with spreadbetting there are far more prices that can be taken advantage of."

Some of the more speculative and outlandish spread bets being lodged include calculating what all the shirt numbers used by a team on the pitch add up to at the end of the game.

Capital Spreads Market Commentary

Anyway the markets have kicked off on the soft side once more seemingly continuing the rather random but extreme price activity. Our clients decided that the rally yesterday was overdone and were heavy sellers of the late evening US moves. This morning has seen them proved right with an immediate drop in both Europe and American indices. The Far East did not give much help either as the expected rally in Japan failed to materialize and the Nikkei is currently 200 off yesterdays US close.

The FTSE is now down 35 points at 5690-92 with the main fallers being (surprise surprise) the Miners. With Gold now back at $633 some $30 off the highs of Tuesday, Copper and silver also drifting investors are wondering as to how much demand there actually is at these higher prices. Rio Tinto is off 75p at 2883.1-2886.9, Anglo down 50 at 2097.1-2100.9 and Antofagasta down 48 at 2036.1-2038.9.

With all the fun in the equity and commodity markets the Currencies although showing small dollar strength are also showing volatile activity this morning. With the NON FARM PAYROLL number out this afternoon at 13.30 from the US, dealers are flattening positions rather than building them up. Cable is still trading and retracing the 1.8550-1.8850 range over and over as first dealers worry about lack of growth in the US putting a cap on rates and then, next moment, worrying about inflation forcing Mr Bernanke to continue hiking. Cable this morning is at 1.8652-55 down 50 pips but has been another 50 pips lower and higher already this morning.

The Euro is trading in line with sterling as the main play is obviously the Dollar at the moment. The Euro is at 1.2788-90 with support at 1.2750 and 1.2700 and resistance at around 1.2810 and 1.2850. A break above here would indicate a move to the highs again but a break lower is more dangerous with little volume support below 1.2700.

As mentioned metals have had a tough time of it with Gold heavily lower at 634.0-635.0 which is below the $636 level which the market bounced off on the 22nd and 24th May. If we close below this level this evening gold could well fall back to $600.

Oil had a scitsophrenic day yesterday first falling 2 dollars before deciding that actually things wern't that bad after all. At 70.88-70.94 for the July contract we appear to be consolidating here with world fears over many Oil producing nations we may well find that we are building a springboard for higher prices.

With the US markets drifting to close on their lows and remaining lower overnight traders may be excused for thinking that the FTSE would be called quite a bit lower this morning but, surprisingly, early buying potential is being shown from clients and our early trading is for us to open only 5 off from yesterday afternoon at 5645-47 (remember this is still 150 points from the lows of last week!).

Conversely the Dax which closed at 5622 (at the same time as the FTSE) is being called at 5674-76 down almost 50 points. (!?) there is obviously some sense there somewhere. US markets as mentioned sold off all evening to close at their lows with the Dow off 200 and the S&P off over 20 points. This morning sees further selling in the Dow at 11076-80 down 30.

Markets are becoming increasingly nervous about virtually everything. Yesterdays trigger was the consumer confidence number which was expected to be a bad number at around 100 down from 109. The figure actually came in at 103, better than forecast, but obviously still a surprise to those who had not looked at the expectations. With the dollar falling heavily again the US is now worrying about problems on four fronts. Inflation, Budget deficits, trade Deficits and now the last balwark of the US economy the consumer.

Today sees Corus give their interim trading statement and it is here where we can see the real effects of rising energy costs. Profits are down by almost 75% and although they have had to pay more for energy the average price for their final product (steel) has actually fallen! With all the takeover mania in the steel sector the shares are unlikely to get hit much this morning as Corus is rumored to be on the radar of both Arcelor and Mittal. Shares closed at 381.2-382.0 yesterday.

Currency markets seemed to be the trigger for the equity markets yesterday. In morning trade (after the early Far Eastern sell off) there was little movement as small dollar sellers probed for weakness but with no follow through they appeared to have given up. Then the Confidence numbers hit the wires and we were off to the races again as everyone and his dog decided to get out of the Greenback at the same time. Cable ended the day over 2 cents higher at 1.8834 and this morning remains at this level with clients still looking to sell all thing American. The Euro is also solid at 1.2885-87 up 20 pips overnight. With continued weakness in US consumer confidence and housing the Fed will find it difficult to be too aggressive over more rate hikes even if the inflation fear hovers and dealers sense this. Europe on the other hand has room for tightening with rates currently in the mid 2% region. Greenspan's continuous rate hikes over the past 18 months or so in an environment when it possibly wasn't all that necessary have left his replacement (Mr Bernanke) with very little room for maneuver.

Gold missed out on its usual reverse dollar move which is worrying some of our clients. Initially on the dollar fall Gold put in a good solid $10 rally but by the close was back to only up $4 and this morning is seeing little in the way of buying interest. At 653.9-654.9 we may be in for one of our quieter days.

OPEC announced that they will be holding production at these higher levels but this has not caused a fall out in the price of crude. The odds must be on another spike higher at this time and our clients are slowly building long positions. Up to now Nymex has struggled to hold onto gains above $70. Current price 71.92-72.98 unchanged overnight.

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