Financial Spread Betting News

Capital Spreads Market Commentary

Fridays close was positive all round but this morning fall out from the Far East has unnerved investors and the FTSE is likely to open 20 to 30 points off. Even this can be considered a good start as the Nikkei managed to drop over 360 points after a Sanyo report gave hint of a surprise profit warning.

Whilst we have been watching western markets go ever higher the Nikkei has actually fallen for the Year to date.

The Call of the FTSE is now 6165-6167 but sellers are building up with clients looking to offload long positions. Traders in the indices have been (generally) negative and will be happy with the fall today, especially our Dax traders who were heavily short over the Weekend.

The selling we are seeing seems to be very broad based and our clients are not hanging around holding onto losing positions. The Dax is now off 30 at 6380-6382 and the Dow is down 40 at 12300-12304.

The big news of the weekend was BSkyB spoiling tactic over ITV. By purchasing 17.9% they will effectively hold a blocking poosition on NTL's potential merger. Not only that but Mr. Murdoch presumably has a large circle of business friends who can back him up by acquiring their own stakes. ITV shares will open down significantly as the potential for any rival takeover battle is now non existent. Whilst a very shrewd move it does raise one or two questions about competition. ITV is looking to come in 2 or 3 % lower at around 111p. The shares were overvalued due to the speculation but now have a long way to fall on purely valuation criteria (of course there are other factors involved) and if Mr Branson is unable to get a government investigation to see things his way the shares could well drop all the way back to 90p. A nice little present for whomever ITV finally manages to get as their new CEO.

Corus is now a bride with two and possibly three suitors waiting at the alter. The problem for the company itself is that any takeover would presumably be based on the customer and order books. The cost of steel production in the UK and Netherlands is considerably higher than in India, Brazil or Russia so the real worries will be for the workforce not for the board or the shareholder.

Currency markets, as is normal in equity volatility, are seemingly moribund, waiting to see what the fall out does to rate expectations. Cable is at 1.8936-1.8939, Euro at 1.2828-1.2830 and Yen at 118.14-118.16. Dealers are very quiet in early action and we are not expecting much movement before the Leading Indicators this afternoon in the states.

Oil struggled all Friday to rally from the 2 buck fall on Thursday and eventually closed 40cents higher. This move up has been wiped out on the open this morning with early seller pushing us down 50 cents on the open at 58.40-58.45 (Jan Brent) we are bang on minor support and may find some buying at this point. But falls below £58 may well trigger another sharp sell off.

We have been negative on Oil for quite some time but were beginning to worry over the past few days that events would prove us wrong. The imminent expiry of the December contract on Brent and Nymex focused dealers' minds on delivery and (as is sometimes the case) traders suddenly discovered that it was the speculators who were long not the end users who had already bought all they needed. Cue dramatic slump.

Oil dropped over two dollars in a frenetic last few hours but this did not have the usual effect on the indices. Such a dramatic fall would normally have the Dow scooting a hundred points up as inflation fears waned but this time the effect was muted. It was up but not much. Are we reaching a short term peak in the markets?

The FTSE is opening down about 20 points at around 6235-37 as you would expect with Oil stocks suffering in the slipstream. Mining stocks are also weak as copper and Gold could not hold onto earlier gains. Copper eventually closed down 500 pips at 3.0450 and Gold is now under 620 at 618.2-618.8. Dealers in Anglo and Rio Tinto etc will be eying the psychological support at 3.0000 for copper and 613 for Gold as a break below here could trigger much lower metal prices.

The Dow as mentioned has hit a new closing high at over the 12300 level but the S&P just failed to close above 1400 at 1399.6 (close but no cigar!). This morning sees both unchanged at these prices at 12307-12311 and 1399.5-1399.9. Resistance is obviously at 1400 in the S&P but the Dow also has a minor resistance area at 12316 to 12326.

In the FX markets we had several knee jerk reactions over economic data yesterday shoving the pound this way and that all, eventually, to very little effect. The general impetuous appears to be negative on sterling at the moment as we continue to give up ground from the highs of 1.9170 last week. Although the market is spiking higher on figures this just attracts more sellers. Our clients are yet agan heavily short Cable. The current price is 1.8850-1.8853. There is solid support at 1.8850 and then 1.8830 but shorts will probably be looking for the 1.8750 target.

The Euro slipped as well yesterday having appeared to be solid all week. The weight of long trading positions finally started to tell as new buyer yet again failed to come and take us higher. This has been the refrain on the EUR/USD for the past six months, an initial move higher...hopes of a break to ground above 1.30 ...wait...wait....wait... give up and down we go. There is now a strong downward trend line defining the peaks of the last few moves and this is currently at around 1.2905.

Sat on the train this morning thinking bearish thoughts as I fully expected the market to match the train timetable and come in 25 points (minutes) or so lower (late). For one brief moment my pre-report thinking was confirmed but almost immediately the buyers stepped up to the plate once more and in very short order we were back at yesterdays close and feeling like masters of the universe once more.

With property and fixed income markets looking fully valued the obvious place for your cash (aside from sitting in the bank) is equities. But which ones and anyway have we already missed the boat? Ths is where the hard work comes in. As every book will tell you just putting your finger in the air and buying just any old market may give you a short term gain but in the long run it is using what information you can glean from whatever source to get in on the stocks likely to run and out of those stuck in the mud.

The FTSE is now unchanged at 6228-6230 as is the Dax at 6430-6432 and the Dow at 12254-12258 and with retail sales this morning from the UK and the CPI numbers from the states this afternoon we can look forward to a little excitement.

Movers in the FTSE are likely, once more, to be the Banks (as interest rate rumour and counter-rumour circulate) Miners (as fears that the recent sell off in Metals may continue) and Oil (for the same reason). Growth prospects are dimming slightly but with enough good news on occasion to keep hopes strong of a soft landing scenario. Dealers are pinning their hopes on this eventuality as equity markets climb ever higher. S&P P/E ratios look sustainable and if the interest rate outlook softens shares could have substantially further to run.

FX markets are showing dollar strength once more this morning as the greenback seller grit their teeth and hang on. The Pound and the Yen appear to be the sufferers at the moment with the Euro moving almost parallel with the dollar. This should give Euro /Dollar bulls heart for a resumption of the move higher as soon as the current phase runs out of steam. At 1.2812-1.2814 we are only 60 pips or so off recent highs whilst sterling has now dropped almost 3 cents from the peaks.

Cable at 1.8857-1.8860 is slightly off last nights rally but sellers are very definitely in the majority this morning with heavy position building from many of our day traders.

Gold tried for the downside in quiet trading yesterday but eventually closed unchanged to slightly up. Today we start almost unchanged with little overnight activity from the Far East. If the rumours of central bank buying prove to be correct the sky will be the limit once more if not... then 550 beckons once more. Oil is oscillating around 60 to 61 bucks after weaker than expected inventories gave a boost to bulls. Our clients are long and sitting cautiously on positions, prices today at 60.80-60.85 in Jan Brent.

One of those odd days when the FTSE appeared to be on a different planet to the other markets. With Gold and Oil suffering taking BP Shell and the Miners into reverse we saw (at one point) the FTSE off 30 points whilst the Dax was up 35 and the Dow up 60.

Late activity saw this reverse correlation narrowed slightly and early action this morning is showing stronger buying in the UK than in Europe. Even so the Dax is now at a four year high at 6408-6410 whilst the FTSE and Dow are both about 30 points off the highs, hit last week, at 6218-20 and 12155-12159. With the Dax over 6400 bulls will be hoping that it can drag the FTSE to challenge the 6250 resistance and the Dow to simultaneously make an attempt at 12200.

Vodafone and Alliance Boots both came with trading statements today with the first beating estimates by £150m and the latter matching previous forecasts. Boots investors will be pleased that the boards bullish outlook has been justified and the shares are likely to go higher again today after experiencing a moment of doubt on the open when they came in off 8p. We are now a couple of pence higher and our clients are looking to get long.

FX markets had one of those reversals of confidence yesterday when the bearish dollar outlook took a hammering. Sterling had three seperate attacks on the 1.90 level and traded in the 1.89's for a few minutes each time before buying put a support under the move. This morning sees some further buying of Sterling but it appears half-hearted at the moment and there seems to be a cap at around 1.9050 which is attracting day trader selling. Buyers are likely to come in at around the 1.9070 level and sellers (not surprisingly) at just below 1.9000. Current price is 1.9030-1.9033 up 20 pips or so.

The Euro also took a bit of an attack falling below 1.28 four times yesterday (and once overnight) but buyers were always in the ascendancy down there and we are now backat 1.2835-1.2837 still 30 off yesterdays morning levels and not looking as threatening to the upside. The resistances at around 1.2900 and support at 1.2800 should hold until the PPI and retail sales numbers out of the states this afternoon.

The stronger Japanese GDP helped the Yen to a good performance overnight and the Dollar is off 45 pips at 117.74-117.76 having hit as low as 117.40 in early European activity. Stronger growth may reignite Yen rate hawks but the BOJ does not seem over keen.

Gold drifted around in the mid 620's all day yesterday and, frankly, look likes doing the same today. Support at 622 then 613 is matched by resistance at 631 and 637. Current prices at 623.2-623.8 are off 2 bucks this morning but there is littel trading activity going on. Brent crude has tried to move higher this morning but sellers are in the wings. The old support at 58.50 held yesterday and our clients took the opportunity for some canny buying at these prices before selling out in the 59.50's to book a tidy little earner.

This morning sees us at 59.00-59.05 with not much early action.

Up and down we go with each day bringing a change in sentiment. Today sees all the western markets looking distinctly happier but it is difficult to see why as the Far East did nothing special, there was no particular news over the weekend and there have been no corporate announcements this morning of note. Still it is very nice to see investors with a spring in their step again.

The FTSE was called unchanged on the off but buyers have been coming in, in early pre-market activity, and we are seeing solid buying all round. FTSE is now at 6220-6222 up 15 points. Last weeks high at 6255 beckons the bulls. The Dax is also screaming away at just under the 6400 level again. At 6368-6370 we are finding buyer willing to go with the move, the four year high hit at the end of last week (and seemed a serious resistance at 6365) has been breached and we could see quite a bit of short covering in early activity.

FX markets are quiet after the heavy activity of last week. An attempted move higher this morning has come to nothing in Cable and we are now just a few pips off Fridays close at 1.9112-1.9115. Our clients are very mixed at the moment with sterling bulls looking for continued dollar weakness counteracted by the bears who see nothing special in the UK economy which would warrant a higher trading range. Resistance is above at 1.9150 and 1.9190 and support at 1.9105 and 1.9075. With no major figures today markets are likely to be range bound waiting for the US retail sales and PPI data due tomorrow.

The Euro still threatens a move to the up side but the failure to hold to the 1.29 level on Friday may weigh on dealers minds. Momentum is still positive and our clients are taking any pullbacks as buying opportunities. At 1.2856-58 we are within striking range of the 1.29 resistance and then the 1.2980 high of the year. That said we are still in the 2006 trading range and untill a decisive break is made many traders are keeping their powder dry.

Gold gave up much of the rally on Friday but managed to close above (just) the minor support at $627. Our Clients are still long but there was quite a bit of profit taking at the end of the week and we now have the smallest outright position for quite some time. We are up 2 dollars this morning at 629.5-630.1.

Oil had an attack on the 61.30 to 61.50 resistance level last Thursday (December brent) but the effort was too great and sellers were quick to get on the back of any momentum lower. The late sell off on Friday took the market down to the 59.60 level but most of this has been reversed this morning as buyers regain some confidence. At 60.00-60.05 there is minor resistance just above at 60.20 and then higher at 60.75 and 61.30 before the major resistance at 62.40. Below we have the (minor) 59.50 support then volume support between 58.70 and 59.10.

The Gate retains £2m City Index media account

LONDON - Financial agency The Gate has retained the £2m media planning and buying account for financial services company City Index in a two-way pitch against Ptarmigan.

Ptarmigan already handled the business for financial trading firm Finspreads, which was bought by City Index earlier this year.

City Index was established in 1983 and is a spread betting and "contracts for difference" share trading firm servicing financial clients.

Finspreads was established in April 1999 and is also involved in spread betting. In March 2001, it became the first company to offer fully interactive online spread betting.

Stuart Rice, head of marketing at City Index, said: "The Gate's knowledge of our sector, and subsequent media strategy is simply fantastic. We're going through a phase of dramatic change, and what really impressed us about The Gate were its views on how we move forward in terms of brand management, not solely buying media space."

Mark Ashley, media director at The Gate, added: "We are delighted to have retained the City Index account and look forward to working closely with both companies in developing exciting and innovative media plans that deliver ROI."

The Gate's portfolio of clients includes Invesco Perpetual, Investec, The Royal British Legion and Scottish Widows.

Spread betting firm Delta good hand in funding round

Irish-owned financial spread betting company Delta Index has claimed to have tripled its valuation to €22m following a new €2m funding round led by existing shareholders and new investors.

According to the company, existing investors contributed €900,000 to the round and new investors contributed €1.1m to the round.

Former AIB Group chief executive Tom Mulcahy, who was an earlier investor, has participated in this round along with Delta Index chairman Dermot O'Donoghue, former head of treasury at AIB Group and Delta's director of international development Chris Curran.

Other investors in the company include Dolmen Securities, the parent company of Dolmen Stockbrokers.

The latest valuation of €22m values the company at three times its valuation 12 months ago.

The funding brings to €4.3m the amount raised since the company was formed in 2002 by actuary Conor O'Neill and technology expert Michael O'Shea.

Financial spread betting — betting on the outcome of an event or performance of a share or commodity as opposed to buying actual stock — has historically been regulated in the UK.

This latest investment, the company says, is timed to take advantage of the upcoming regulation of both financial spread betting and contracts for difference across the EU.

Delta's Dermot O'Donoghue commented: "Delta Index brings a compelling alternative for Irish investors which provides significant advantages over traditional investment vehicles.

"It is this that has attracted both new clients and quality investors. These investors understand why we continue to win new clients and have indicated their interest in participating in future rounds of fundraising," O'Donoghue said.

Capital Spreads Market Commentary

The Dow and S&P hit the support trend line (as mentioned in yesterdays comment) and took the opportunity for a sustained and quite impressive move higher. Chartists always look for an extension rally to end a bull run and the US markets have yet to give this indication. Although the indices have moved solidly higher there have been no 'blow out' days where the Dow (for instance) moves 150 points up but then closes down. Momentum indicators still favour the up side even though we had seven straight losing days (CBOT Dow futures) in a row since the highs on the 26th Oct.

The open close on that day were both at around 12145 and this will be the next test for the index. If we can close above here then more buyers will come into the market looking for a new shift higher.

The FTSE is not unreasonably called five or six points higher as both the US rally and the hike in Oil help to support the index. At 6229-6231 we are seeing little interest from our clients as they ponder the chance for new highs above 6244. The actual index closed at a new four year peak but failed to hit the intra day level reached in October.

Scottish and Newcastle came in with good (but not quite good enough) numbers. The performance in the UK was very sweet but in Europe sales appeared flattish. Investors are likely to be cashing in their chips and looking for more sparkling opportunities this morning. The shares are called some 10p off last nights close of 568p.

The FX markets woke up overnight having slumbered through most of yesterday. Traders took the opportunity to sell off the greenback once more and the chartists are now licking their lips speculating that, finally, the dollar is putting the blocks in place for a sustained move lower. But beware, we have been here before. This year has been one long dirge of 'death of the dollar' serenades but, aside from the shift in April/May the market has just traded and retraced the same old ranges.

Cable is now back above 1.90 at 1.9037-1.9040 up some 70 pips and this is tempting the sellers into the market. Clients have continually shorted any attempt for sterling to break above 1.90 and this has paid off over the past year. At some point one feels that the sellers will be caught out but until that happens we will go through the same old same old selling.

The Euro is rather more centrally positioned at 1.2755-57 and we are bang in the middle of the last six months trading range and although the momentum appears to be looking up we have yet to actually make the break.

Gold remains in the 622 to 631 range as mentioned earlier having had a look at the bottom end of this range twice yesterday. The sentiment is positive here as well but we will need to move higher soon otherwise longs may be tempted to liquidate and take profits. This morning sees us at 624.5-625.1.

Oil continues to trade in it recent ranges as well although it managed a good 80 cent rally on the day having looked weak in early action. We had two attempts to break into the $60 region but both moves were defeated in short order and this morning we are drifting gently down. Bulls seem to be creeping out of the woodwork but the are still gazelle like and likely to scamper off at the slightest scare. December Brent is at 59.60-59.65 down 20 cents.

Yet another good day for clients as the FTSE managed to hold up against perpetual attacks from a weak US. Dealers remain long of the FTSE index and of stocks looking for another shift higher this week.

The FTSE is now trading up 30 points this morning as Oil stocks take heart from the rise in crude on Friday evening. The dow, which had given up on the 20000 level on friday seems happy to be taken higher by Europe (the US may have something to say about this later on) and we are now 40 pips up on the weekend close. It appears that last weeks profit taking may have run its course for a while. The FTSE is called at 6176-78 the Dax at 6280-82 and the Dow at 20004-20008.

The is almost no new news from corporate UK this morning although a rumored bid from the US for Whitbread and a Ladbrokes snatch of 888 keep the M&A rollercoaster on its tracks. Ladbrokes can probably hardly believe their luck. They will now collect a fully functional well known poker platform for almost minimal cost and a company like Ladbrokes can afford to wait for the US 'prohibitionists' to be run out of town and therefore look forward to enhanced earnings some little way down the tracks.

The Non Farm Payroll number was a difficult beast to get a handle on. The headline number was weak but the revision to past months was strong. In reality the important number is the current one as past figures are just that 'past'. The market jerked down then up before drifting down through the session. Volume support at 11940 was not tested in the Dow but the medium term trend line from July held beautifully and traders will be looking at this confirmation of support at 11960 as potentially the pull back that was needed to send us higher. Our clients are long of the Dow for the first time in ages having suffered through most of the move higher in October and September.

FX markets took a different view of the NFP and seemed to be looking at potentially hawkish views of the US interest rate prognosis. Dealers were surprised by the dramatic hammering of all non US currencies as the buck took back quite a bit of the recent falls. Dollar shorts (not for the first time this year) were taken to the cleaners and my comment of last week that 'nobody seems to lose money selling above 1.9000 in Sterling' came good once more.

This morning has some follow through on the dollar move with cable at 1.8970-73 and the Euro bang on the 1.27 level at 1.2703-1.2705. The Yen is a critical reversal point with 118.40 being the resistance of the move higher and 118.00 the support. A close above or below these points tonight could be the indicator of the next short term move.

Gold is settling into the price region of 613 to 640 with little action since the knee jerk reaction of the Non Farm took us briefly lower. In the short term the 622 to 632 range will probably confine the markets but the momentum has definitely moved to the bulls side. Rolling Gold is called at 627.0-627.6 and our clients are still solidly long.

Oil was the big gainer on Friday moving from under 58 dollars to just over 59 dollars during the session. This cannot hide the fact that the market is stuck in the (roughly) 57.75 to 62.00 range but with the bears still having the best of it when it comes to sustained moves. The market is tending to drift higher but dive lower and this will continue to weigh on buyers minds. In the absence of any bad news at the moment dealers will continue to fear over supply. The open price this morning is at 58.57-58.62 (December Brent) down 50 cents.

Sometimes you get the bear and sometimes the bear gets you.

Yesterday saw one of our clients best days with dealers remaining long of Gold, sticking out the drop in oil and buying into the rally, running with the falling Dow and S&P and getting the Cable move right with initial buying followed by heavy selling above 1.9100.

One of those Cheltenham Race Days when the favorites win every race!

Today see precious little activity on the off with the FTSE opening lower on the general fall across the globe but the Spread betting companies had already priced in a worse fall in late US trading last night. So we can almost claim that the UK is doing rather better than expected. Morning prices are at 6130-32 fro the FTSE off 18, 6272-74 for the Dax similarly 18 off and the Dow at 12045-12049 rising slightly from last nights close. The US market has now fell some 140 points from its highs but is still well above trend line support at around 11940. Only a break and close below here would set the bull markets alarm bells ringing.

That said, the last few trading days have seen some disquieting numbers from the various US agencies with economic performance indicators all surprising on the weak side. With the Non Farm Payroll numbers out this Friday (tomorrow) another bad figure will reawaken slumbering fears of a hard landing scenario for the US economy. Although corporate returns for the last year or more have been truly astounding investors will be worrying about how these can be maintained in a slowing environment. Stock markets are usually fuelled by 'fear and greed'. For the past three years greed has been in the forefront of traders minds but we may find, for the next few months, that 'fear' could make a temporary comeback.

Carphone warehouse have come with a solid 60% rise in profits and have restated their confidence in future earnings. The shares have opened up a few pence but investors appear wary of buying above 300p at the moment and we may see this as a cap in the short term.

FX markets are giving the dollar and Euro a better day on the off. The Euro seems to be rather stuck at around 1.2750 which is not surprising as this point has been something of a support resistance level since May. The currency has been in a range basically 2. cents lower than here and 2.5 cents higher for the last 6 months. Option traders are probably busy selling 1.30/1.24 strangles as I write. The current price is 1.2756-1.2758 and our clients appear to have very little interest in it. Sterling is where the action is and day traders are having fun getting on the back of moves for the day, running with it and then getting out fighting again tomorrow. Our clients remain slightly short after sitting on positions overnight and taking profits on the small move lower to 1.9030 in early action but we have drifted up slightly to 1.9070-1.9073 and we are seeing further selling on the rally.

Gold, as commented ad nauseam, broke the 607 resistance and therefore managed a 10 dollar rally on the day to a 619.5 high. Our clients were long and sat with the move for the whole day only taking some profits at above 616. Traders will be hoping for a return into the 620 to 640 range where we failed back in early September.

Oil had an odd day of it rallying, falling, and rallying once more only to run into solid selling right at the end of the day. This morning sees a continuation of the last 20 minutes last night and we are about 40 cents off at 58.60-58.65 (December Brent) dealers seem unhappy buying above 59.50 at the moment but equally wary below 57.50. Further out sees strong resistance at 60.70 61.40 and 62.40 and solid support at 58.50 and 57.50.

The Chicago PMI lived up to it's billing and reversed Septembers bullish figure with truly awful 8 point drop to 54.1. The markets initially reacted as expected with a drop in the Dow as dealers worried about recessionary indications and a drop in the dollar for the same reason. This began a day of conflicting trends with falls a rallies continuing until the closing bell by which time we were virtually back where we started from. The Dow eventually closing at just 5 points off which is effectively where we start again today.

The FTSE seems to be struggling at these levels with traders not too sure whether this is quite the moment that the market will resume its trend higher. The index is over 100 points from the highs of last week which is easily the worst performer of the Europe/US region. At 6136-6138 we are some 8 points higher and our clients are very positive at the moment being net long of virtually all UK based markets whilst at the same time being short of everywhere else!

Deutsche Bank beat expectations but the market still sold off as investors continue to lighten their holdings. At 98.33-98.52 the share is very close to the psychological €100 level where we failed back in May.

As mentioned earlier the numbers yesterday did no favours to dollar bulls as weaker than expected figures increase the likelihood of the Fed looking to make the next rate move an easing rather than a tightening.

The dollar dropped heavily versus all the majors although, yet again, the Euro appears to be the laggard. Cable put on a strong 1 cent move as did the Yen but the Euro was confined to just a 70 pip shift which has been gradually chipped away at since then. Traders are getting on the back of this reluctance and have been building short Euro positions with us looking for a return to 1.2700 and below. The current price of 1.2748-1.2750 is off 15 pips this morning.

Cable at 1.9072-1.9074 is showing surprising strength probably reflecting the good chance of a rate hike from the BOE this month versus the opposite from the other majors. Whilst returns are an import factor in FX markets dealers are wary of getting too enthusiastic about the pound as it has a habit of dropping like a stone at a moments notice! Our clients are sitting on their hands a little with sterling having been caught short at the 1.90 level on the figure yesterday.

Gold is on the move again trading above 607 this morning and looking strong for a new move into the 607 to 640 trading range. The recent move higher has broken the various downward trend lines in place since the highs of May. Clients are very much on the long side and are sitting happily watching their P/L go up!

Oil was a real killer yesterday following on from the 250 cent move of Monday with another 100 cent drop yesterday morning/afternoon only to be dramatically reversed in late activity in the States which ended the day some 50 cents up. This morning sees longs taking a few profits after the surprising shift up but we are still well down and below support at 59.10 which was also yesterdays high (in Brent December) our clients are marginally long but there appears to be little appetite to either sell or buy at these prices.

A curiously bloodless day yesterday with the Nikkei dropping 300 plus and the FTSE off 40 dealers might have been expecting more from around the globe but, eventually, the S&P, Dax and Dow all closed pretty much unchanged.

The evening rally does not appear to be favouring the UK index this morning and this is not really a surprise as all we have had in the press over the last couple of days has been the rather ridiculous sight of the British government dressing up it's need for more tax revenue under a green banner. This follows the usual path to glory of not actually making your preferred policy cheaper (oh, no!) but making the less favoured route more expensive. We have the same thing over transport policy. The way to get more people to use public transport is to make it better NOT to just make driving a car more expensive. So we are now all being prepared for new 'Green Taxes'. In reality we can just knock off the first word Green and we are left with the real policy.

So what happens to the FTSE index. If your main source of income suddenly has significantly less money to spend then errrrr ... your gross revenue will probably suffer and your share price will probably fall. Into all of this comes the falling oil price and BP and Shell (comprising 22% of the index) are unlikely to go up. And just to ensure that the pips are really squeezing we also have the proposed 'revaluation' of property values coming up. Another translation :- councils will just charge you a lot more for the same house.

Whilst all this sounds a little doom laden it is not actually that bad, equity markets are still in a solid bull run and in the long run will probably just mean that UK plc will perform slightly worse than it's global competitors.

The FTSE is called some 10 points lower at 6117-6119 and our clients are giving solid two way business as the Bulls and Bears slug it out.

In the equity markets RHM have reiterated their yearly forecasts with growth of 2% in sales. This is better than analysts were expecting and will probably cause a small rally on the open. Early calls are for 270p up from the close at 262 last night. Long term the company looks less favoured as growth potential appears limited for a company selling a product so out of favour with the powers that be (although the same could be said for tobacco over the past 15 years).

In the FX markets clients are getting very negative on sterling our books now show them short of the pound versus every major cross. This is an unusual state of affaires as we normally have at least a few positive positions even if it is just the GBP/CHF (swiss).

Cable this morning is back at 1.8984-1.8987 down below the 1.90 level again. Our clients started to sell as soon as we breached the 1.90 level and this is not really surprising as over the past three years (for those with deep pockets) nobody ever lost money selling above here. The promise of $2 to the pound has always been tantalising but never attained.

The Euro is curiously subdued at the moment as dealers ponder whether we can hold on to last weeks move higher. The 1.2750 resistance held yesterday and sellers were quick to take profits. At 1.2687-1.2689 we are now looking a tad weak but this is a major support area from months past. A close below 1.2675 could indicate a retest of the bear move once again.

The 607 level in Gold held firm yesterday with the market trading as high as 610 before closing back down at 603. Our clients have played a good hand here and were solidly long for the move higher and took profits from 606 to 608. Some buyers are coming in again this morning but the failure to close above the 607 resistance yet again may weigh on the market.

Oil decided that US and Chinese growth prospects were looking less rosy and that demand may not be quite so vertical after all. A sell off of 240 cents was quite impressive even by todays standards and buyers will be very wary of getting involved. This kind of momentum can lead to either a serious price destruction as longs get squeezed out of positions in a continuous move lower. Or investors may decide that this was the 'blow out' move they have been waiting for and start to bottom pick in such numbers as to forma solid base. At the moment the first option appears the most likely.

Have we finally come out of the slow grind higher in the indices. All indices are called significantly lower this morning with early calls in the FTSE for us to come in 30 points off at 6130-6132. Even this is a good performance versus the other major markets as the US closed at the lows on Friday and has opened another 3.5 points off in the S&P and 25 off in the Dow. The Nikkei has also run into a heavy brick wall with the market down over 300 points in Far Eastern trade.

Fears of a heavier slowdown in the US markets has triggered the sell off as a hard landing in the States translates into a very hard landing for their major trading partners in Asia and to some extent Europe as well. Economists do not appear as down hearted as traders with the smaller than expected GDP numbers on Friday not raising too many fears but with most investors sitting on very good profits for the year so far there may be a feeling of "mmmmm, I don't think it's a big problem but, just in case, lets lock in some of these profits and then we can sit back and await events".

Protection markets have had a good weekend as well with Gold and Swiss Franc amongst the biggest risers of the past three days.

Pearson may be one of the more volatile stocks this morning with numbers released this morning showing a good hike in sales and net profit. The owners of the Financial Times have had an odd year in terms of share price movement with the year to April being dominated by takeover rumours then a swift retracement over the May bear market period followed by a strong move to now. The shares are likely to open slightly off as the numbers are not quite good enough to tempt new buying but earnings growth remains strong and the statement indicates good prospects for the forth qtr.

FX markets are leaving the floor to the equity and commodities today after their dollar raid on Friday seems to have left dealers tired this morning. Finally the dollar bears had something to crow about as the Greenback dropped over 1 ½ percent in the last three days of the week.

The USD/JPY has broken the medium term uptrend line at 118.00(ish) and dealers are starting to load up on shorts once more. This morning's level at 117.41-117.43 is bang on another major cusp. This level has generally meant (over the past few months) either a turning point from bullish to bearish, or vice versa or a support/resistance level from which the market regains composure.

As mentioned before Gold is in the ascendancy with buyers pushing us over the $600 level again. As mentioned many times in this comment the resistance is at 607 and short term traders will be looking to take profits at this level. If the equity and dollar markets regain some strength we will get renewed selling at these prices but if we continue to look weak we can expect further rises in the Gold markets. This morning has us at 604.5-605.1 up $6.

Oil is still oscillating around the $59 to $62 range but our clients appear curiously subdued about involvement. If the UK government's pretty strange 'Green Tax' ideas (translation: we need more of your money but we are already under pressure so we will dress it up under the 'environmental' banner) take hold across the globe (so unlikely that I will admit to the existence of the Loch Ness Monster if it actually happens) then Oil may get significantly cheaper as demand reduces.

No outright rejection of the highs yet in the states means that the Europeans are going for the upside again this morning.

We are seeing a continuation of the slow grind higher but investors were momentarily worried by the rather grim housing news from the US yesterday. A 10% YOY drop in prices is not what was expected. In the UK that would translate into a nasty 30K plus stamp duty off a £300K house purchase and if we catch the US cold it would certainly put a major spanner in the prospects for retail sales growth.

A drop in the prospects for house price growth is not necessarily bad for equity markets (although in truth it usually is) in the UK as investors would have to look further than just another property purchase for their investment cash. Private equity buying is still very low in the UK as the British tend to leave stock market investment to the professionals. With the almost total destruction of end salary pension expectations there will eventually come a time when UK citizens are forced into the US view of a personal 'life time' saving strategy. Much of this expectation has been focused on housing over the past 20 years as a massive proportion of the average persons wealth is tied up in his/her property.

Anyway, the FTSE is called up about 10 points this morning at 6195-6197 having given up on the 6200 level attained yesterday morning. The DAX is likewise struggling at 6300 and the Dow also at 12150.

Yesterday we had a mixed bag of results and statements with Cadbury and Astra Zeneca giving nasty little reminders that analysts expectations are getting particularly tough these days. Astra has dropped almost 10% in two days down from the close on Wednesday at 3520 to the current 3198 on the news that one of it's 'great white hopes' the inspirational named NXY-059 stroke drug has been pulled due to the fact that it appeared to make no difference whatsoever. This has been a recurring theme for Astra over the past few years. The lack of replacements for its current stable of earners. The shares have had a roaring 2005/06 due to solid EPS growth but investors will now be looking in the cupboard to find the next revenue enhancer.

FX markets took a hammer to the dollar yesterday after the housing stats made rate hikes even less likely and traders looked into their crystal balls for some indication of Fed dovishness in coming months. A 10% drop in house prices would seem to indicate that rate pain is quite well advanced. At what point does the FOMC decide that enough is enough. The problem with the US inflation number is that much of it is caused by imported factors and this makes rate tightening an inexact tool for use.

Dealers know this and are therefore trying to see at what point an easing policy for purely domestic reasons becomes more important than inflation fighting credentials. Of course, if the dollar then starts to slip heavily this will then do no good for the price war either. (who would be a central banker?).

Cable is at 1.8879-1.8882 with little interest from our clients, resistance at 1.8920 held overnight but sellers are coming in early on looking to take advantage of some perceived Sterling weakness. The Euro hit a new high against the Yen overnight as dealers reacted to the good/bad Japanese inflation data. The Euro went up to 150.71 in the small hours when the BOJ announced that inflation was falling again and fears of further deflation reared their head once more. Economics is a strange beast. The US and UK are tightening because of inflation fears and Japan is in almost the exact opposite position. Dealers took out a whole swathe of short positions in a typically nasty bear squeeze before coming back down to virtually unchanged again by the time London woke up and the price is now 150.31-150.34 up about 10 pips.

Brokers punt on growth of demand for spread betting

Stockbrokers are muscling in on the financial spread betting market, in a move that could entice mainstream investors into this risky arena.

TD Waterhouse, one of the UK's largest discount brokers, has launched a spread betting service in response to some of its customers placing spread bets with specialist providers.

Michael Foulkes, chief executive of the broker's European arm, said: "We're focused on the needs of active traders, who have needs beyond straight equity trading and custody.

"We're trying to service their needs across different types of transactions. You can't have a void in your product line or customers will go elsewhere."

Mr Foulkes said rival discount brokers - which buy and sell shares for clients without providing research and investment advice - were also moving into spread betting. "It has been coming to the mainstream of the industry over July and August," he said.

David Buik, head of public relations at Cantor Index, one of the biggest spread betting specialists, said the arrival of discount brokers could lead to tighter spreads. This would mean a better deal for customers, as a tighter spread is the equivalent of a bookmaker offering better odds.

Other brokers providing spread bets include E*Trade, the online broker, and Man Financial, the brokerage arm of Man Group. Until now financial spread betting has been a niche activity. Mr Buik said the market has about 800,000 participants and is growing at about 20 per cent a year. With spreads tightening and the minimum bet size falling, the market is becoming more accessible.

Most spread bets are placed online, which could give an advantage to brokers with a strong internet presence such as E*Trade and TD Waterhouse. IG Index, the biggest financial spread betting specialist, says 90 per cent of its bets are now placed online, compared with 50 per cent four years ago.

Spread betting is a high-risk activity that sits in a grey area bordering financial speculation and outright gambling. Punters can bet that an equity index will rise or fall over a given period, which varies from days to months. For example, they may bet £10 pounds per point that the FTSE 100 will rise above a certain level over the next 30 days. If the index falls, they must pay £10 per point. Because punters only put a small amount upfront, they can lose much more than their original stake.

However, investors can use spread bets to hedge their portfolios: someone with large exposure to UK equities could place a spread bet that the FTSE 100 index will fall, thus providing protection from a downturn.

A bet's losses can be limited by placing a stop loss, which closes out the bet when the loss reaches a given size. Mr Foulkes at TD Waterhouse said: "The first line of defence is making sure customers are well informed. But we also offer a stop loss, and the customer can set the level."

Tax advantages are another attraction of spread betting. Spread bets and contracts for difference (CFDs) are both ways of gaining exposure to share prices without buying actual shares, and both are exempt from the stamp duty applied to share purchases. Spread bets, unlike CFDs, are exempt from capital gains tax.

Mr Foulkes said: "This is clearly an anomaly in the [tax] legislation. Spread betting's heritage is in the gaming industry, which is not subject to the same kind of taxation, and has been very successful in keeping it that way because it can threaten to move offshore."

Capital Spreads Market Commentary

A bad day at black rock. The FTSE had its worst day since May as dealers worried about whether the recent rally had been overdone (in the short term almost certainly, in the long term we probably have a lot further to go) and traders rushed to book profits. But by 16.30, the close of the European indices the market had already started to find some buying interest over in the states and investors were keen to get in on even this small fall. The FTSE has unfortunately broken down through the old May high at 6140 and this could prove difficult to overcome on the up side in the short term but our clients are buying strongly.

The catalyst for the return to the highs for the Dow was a series of quite nice numbers out of corporate USA, IBM's numbers were particularly good and dealers are betting on a good start this afternoon from over the pond. Before then we have the little problem of the US CPI, Housing Starts, Mortgage Applications and Building Permits numbers. All due at 13.30 this afternoon. The markets are still very nervous about inflationary pressure building in the economy and not just Oil related so a poor figure could set us back quite badly. If the Fed see any worrying inflation linked data they may very well get back on the tightening Expressway which would deal a nasty little blow to the current bullish tendency. The Dow is at 11976-11980 up 14 overnight.

JJB sports recorded a small increase in half year numbers on revenue up 12%. This reflects the increasing squeeze on margins as the company is now being attacked in its core market by the supermarkets. The chances of JJB managing to increase margins even if the retail environment turns more favorable are slim given that the likes of Tesco and Asda will happily sell you replica kits etc as well. The shares have moved slightly higher reversing yesterday's small drop as investor reflect relief that the trading statement is cautiously optimistic. The current quote at 198.5-199.3 is just below the 200p level where we have been sitting for about a week.

Currency markets are showing little activity but there is a continued reversing of Yen positions as weak shorts are chased out of positions. The Dollar Yen has now fallen 130 pips from the highs of Monday as dealers continue to digest the ramifications of possible central bank support for the currency. Russia's announcement that they will be looking to increase Yen reserves is unlikely to be a unilateral decision. The cross is now at 118.32-118.34, there is support at 118.30 to 118.25 which will probably hold until the numbers this afternoon give us new impetous one way or the other.

The pound is re-trading the same range as yesterday and dealers seem happy to hold on to small longs as we approach the resistance at 1.8735 in the hope of a short covering rally if we break through. Current prices are at 1.8722-1.8725 up 20 pips on the day.

Gold had a disappointing day as bulls appeared to run out of steam and a large sell order on the futures exchange on the open in the US sent the market sharply lower eventually hitting the volume support level at $585 before rebounding. We are now back up at 592.5-593.3 only a few bucks off over the two days. There appears to be steady buying pressure across the market but buyers will be wary of a repeat of yesterday's price action.

For those of a nervous disposition Oil is probably not the place to be at the moment. The market seems to turn dramatically on virtually nothing at all and the recent hourly charts look like one of those Tour de France cross sectional height diagrams. Punters are long but with the rejection of the 62.75 level in the Brent and 62.35 in US Nymex yesterday we will need some enforceable OPEC production reductions to get us moving up again. Early calls are for little change on last night with Brent (December) at 60.90-60.95.

And so we grind higher again. Since July the US markets charts are beginning to look like a staircase with a series of short steps moving prices ever higher always interspersed with a period of stability as the climbers pause for breath before the next step.

The FTSE 1000 is likely to open up once more not just in line with the US Asia and Europe but also in reaction to the hike in oil prices this morning. Early calls are for the index to open at 6166-6168, 10 points up. Our clients have gone heavily short over the rally on Friday and will be hoping for some weakness in early trade to help them out of some losing positions. The FTSE is now at 5 year highs and we are into uncharted territory as far as most traders are concerned. Support is at the old high of May at 6138 resistance is just above current prices at 6170.

EMI have come out with the expected 5% drop in earnings with the usual board comment on expectations for the year being in line with analysts forecasts. The statement went on to mention hoped for sales from the new album from superstar (??!) Janet Jackson and a list of more local artists. Not being a great listener of popular music these days I was forced to ask my younger colleagues about this list as I had never heard of any of them. I was slightly disconcerted to discover that they hadn't either! Not exactly a ringing endorsement of their current stable of performers. Digital revenues have now risen to 9% again this appears a poor level in this day and age of internet growth. Shares did well last week but our clients are looking to offload this morning.

Friday saw the Currency markets consolidating and increasing the recent dollar rally and this morning sees little activity as we await further US data releases. Overnight the Euro flirted with sub 1.25 prices but dealers were unable to break the low (1.2480) set on Friday afternoon.

Sterling has been weakening against the Euro for about five months now and is apparently falling out of favour with position holders. There is good support at 0.6720 and 0.6700 but the trend is definitely to the downside at the moment. Current prices of 0.6743-0.6745 are finding sellers who prefer the slightly less volatile currency crosses as compared to the outright dollar pairs.

Versus the dollar the 1.90 level now appears a distant memory for the pound and analysts are now worrying that with the rejection of the upper end of the trading range there may be a move back down to the lower end. Unfortunately, for the long term trend, this level is around 1.7750 some 8 cents under current prices. Of course there are several major support levels before this (1.8510, 1.8390, 1.8310 and 1.8180) so even if we do drift down it won't happen overnight. Today, as mentioned, is very quiet with prices pretty much unchanged from Friday's close at 1.8566-1.8569.

Gold finished its consolidation at the 573 level and the bulls made the most of the underlying buying pressure that forced markets higher. Clients sat on their long positions over the weekend and have been rewarded with higher prices this morning at 592.5-593.1. We are seeing some profit taking here but most are willing to hang on in hopes of another attack on the resistance of $607 where we came to grief last month. There is some resistance at the 593 to594 region but in the past this has been more of a temporary support/resistance level holding markets before a move continues rather than a turning point.

Oil is reacting to the OPEC meeting of later this week. Expectations of a cut in production are shifting prices higher. But who will cut. Algeria is producing more than it's quota Iran and Iraq less. Should the cuts be distributed evenly or weighted towards those already nearing full quota levels? Expect some 'frank discussions'. This could well be one of those classic 'buy the rumour sell the fact' occasions. Oil is up 50c this morning with December US Crude at 60.77-60.83. Comfortably above $60 but not exactly storming away from the recent 57.50 lows.

Global Trader sees potential in Thailand

Mention derivatives and most people are all at sea about what they mean and how to go about investing in them. Those who do know about derivatives believe they're best left to very sophisticated investors.

Global Trader is a company that offers retail investors access to financial market products that normally are the province of institutional investors, says Fleur Gremmen, the company's chief executive officer.

The company has set up a branch in Thailand with the approval of the Securities and Exchange Commission (SEC), but its expectations are modest for the moment.

The SEC only allows derivatives to be distributed to professional investors. As well, Global Trader has to consult with the Bank of Thailand to see whether it will be possible for local investors to gain access and trade in overseas assets.

But market rules change and in the future the average investor might gain access to these high-risk products.

"A derivative means nothing other than a product that is derived from a standard product," explains Ms Gremmen. "Often you have two types of derivatives. One is a product that is traded on the exchange, for example a future or an option.

"So a future is a forward contract that is derived from a share or a basket of shares if it's an index, and an option is a contract that gives people the right but not the obligation to purchase an underlying share at a certain value. Those are the exchange-traded derivatives"

What Global Trader offers is a non-exchange traded derivative called a contract for difference (CFD) which gives the purchaser the economic exposure to any asset - possibly a stock, an index, a currency or a commodity - but it does not actually transfer that asset to the individual.

Ms Gremmen gives the example of buying a house. If there is a house on the market for a million baht, if you pay that one million baht you get the house. Or you can get a mortgage from the bank to buy that million-baht house by putting up 100,000 baht in equity. The difference is that if the house's price rises from one million to 1.5 million baht, even with a mortgage you profit 500,000 baht.

"It's the same thing with a contract for difference, so you are essentially saying to Global Trader, 'Can you finance the purchase of a million baht worth of stocks?' But when the stock price goes up you are the full owner of that 500,000 baht if that's the profit the stocks realise."

With a future, the difference between the price now and in the future is the cost of funding, and the interest that would normally apply gets added.

However, CFDs are based on today's price. "The only difference is that you're only paying a small sum, a 10% down payment, and you have full upside to the entire exposure if the market goes up."

Also with a future, one is obliged to buy the stock at the forward price but with a CFD there is no real obligation. "It's just saying that rather than purchasing the stock now you are making a down payment on the stock, so whatever the economic performance of the stock, you have the right to that performance. The stock never comes into your ownership."

Derivatives have only been allowed in Thailand since January 2005 and Global Trader is the first international firm to receive a derivatives licence from the SEC.

"We are going to be distributing not all derivative products but essentially futures and CFDs to Thai investors and also using Bangkok as an operating and trading hub for the rest of the Asian region," Ms Gremmen says.

"The Thai SEC has become quite progressive by officially recognising derivatives and regulating them, which protects us from other sort of cowboy outfits from coming into the market and starting to sell a product when they don't really what they are doing. Our company is globally regulated in London by the FSA (Financial Services Authority), which is essentially the strictest regulator in the world."

Ms Gremmen acknowledges - and the Global Trader website is very clear on the point - that derivatives are for adventurous investors.

The mistakes that less experienced investors make with CFDs include moving the stop-loss further. Global Trader advises people that as they are only paying a small margin - 10% - for the purchase a stock, if that 10% gets eaten up because the stock's price drops 10%, one should stop there, but what people generally do is move the stop position further.

"If the price was 10 baht, and the client has a CFD, then the price goes from 10 to 9, rather than taking a loss at 9 and losing 10% of the value they say, 'Oh no, let's move it to 8, 7, 6 - by the time it goes to 5 they've lost half their total wealth.

"There is a saying, 'plan your trade and trade your plan', so if you plan your trade to only lose 10% then you must stop when you have lost 10%, don't allow it to go to 20, 30, 40 or 50%."

In any case, misusing the leverage one has is a serious mistake. Ms Gremmen returns to her house example:

"Tell people you can get a mortgage, they say, 'Fantastic, I don't want to buy one house, I want to buy 10 houses.' The problem is, when the property market collapses you've not only lost one house but 10 houses, or the equivalent value thereof. You must never, even with leverage, invest more than you could lose."

Capital Spreads Market Commentary

The dow hit an all time high (again) and even the S&P joined in the fun. This morning the FTSE is called up just 5 points at 6125-6127 but we are seeing buying fatigue coming in as traders reach the end of what has been a very positive week.

Clients with good equity profits are actually looking to take some of these and we are getting more queries than normal in early trading for dealers wanting to sell.

That said it is far too early to call any kind of top to the current rally as all the indicators are still very much to the upside. Taking profits is a completely different action to actually setting up shorts.

Yesterday's comment about the US market's possible imminent move out proved unusually prescient for me! The previous five days contracting activity meant that the pressure had been building nicely and the 'rose tinted' view that the markets appear to be taking over all US data releases gave bulls the chance they had been looking for. Overnight activity in the US futures has been unusually quiet with no movement to the up or downside and we are calling the Dow unchanged at 11945-11949. (the December futures are bang on 12000).

ABN's unusual (for a broker) dishing of one of their own clients sent Cairn Energy into a bit of a spin. The broker reassessed the price target from a bullish view to (effectively) a negative one. The continued 'Buy' recommendation looking for a target of 1800 seemed a bit odd when you consider that the shares were actually at 1900 already!

FX markets are looking a bit skittish this morning with quite volatile micro moves. Sterling is well up at 1.8624-1.8627 but is having solid blips in both directions. The Dollar is under pressure with profit taking from dollar bulls likely to be the focus of attention going into the weekend.

Dealers are buying the Yen after the BOJ failed to move rates over night. Bears had hoped that inactivity from the BOJ may send the currency lower still but it appears that too many people have had the same idea and we are probably in a Yen bear raid move this morning as day traders hunt for weak position holders. USD/JPY is at 119.16-119.18 down 55 pips. Support is at 118.90 which if broken could see a sharp move back to 118.50.

Like the US equity markets last week Gold is stuck in a tight trading range between 568 and 583 but unlike the indices this is a tight range in a falling market. Clients are long and, with the price at 579.1-579.7, are optimistic of a break out to the up side. But if we stay here for too long the probability will revert to more negative potential than positive. Another failed attempt at 583 could give the bears their chance once more. That said a break and hold above this level will give the longs encouragement of a retracement back to the 607 resistance.

Oil held the $57 support with little real power behind the attempts to go lower. The price has drifted back up to over $58 (for the November contract but the action at the moment is very 'bitty'. The price is now at 58.22-58.28 up 40 cents and the potential for a relief rally to end the week is getting higher.

FSA to pay costs in Cyprotex case

The Financial Services Authority (FSA) will have to pay the full legal costs for two people it tried to fine for betting on a stock market flotation.

In May, Paul Davidson and Ashley Tatham won an appeal at the Financial Services and Markets Tribunal.

It overturned an earlier finding of the FSA that the men had manipulated demand for shares in a biotechnology firm called Cyprotex.

The tribunal has also confirmed that the FSA's decision was unreasonable.

As a result it ordered that both men should have their legal costs paid in full.

Mr Davidson has previously claimed that his legal costs have been between £2m-£3m.

In its decision earlier this year, the tribunal ruled that even if the two men had been engaged in abusing the market they should only have been given a public censure, not a fine, as no one suffered from the alleged manipulation.

A spokesman for the FSA said he did not know how much the legal costs of the two men would amount to.

The precise amount has still be decided by a court official.

The Plumber

In 2003, the FSA tried to fine Mr Davidson - an entrepreneur known as the Plumber - £750,000, and Tatham £100,000, for their roles in placing and accepting a spread bet on the shares of Cyprotex when it was floated on the Alternative Investment Market in 2002.

Mr Davidson owned 35% of the shares in the company at the time.

Mr Tatham was a director at the spread betting firm City Index where the bet was placed.

The alleged purpose of the spread bet was to create extra demand for the shares and thus ensure that the flotation was a success.

However, the tribunal found that the FSA had failed to prove its case that the two men were engaged in trying to manipulate demand for the company's shares.

Mr Davidson was declared bankrupt during the course of the FSA proceedings and Mr Tatham lost his job.

Both have previously threatened to pursue the FSA in the civil courts for loss of earnings.

Global Trader could be up for sale following approaches

Global Trader, the UK-listed online spread betting company, may be put up for sale after receiving several approaches from potential buyers.

The company has hired independent investment bank Fenchurch Advisory Partners, who are expected to distribute an information memorandum within the next few days.

Global Trader offers spread trading and contracts for difference services to professional institutions and private investors. It operates in both domestic and international markets and conducts over 600,000 trades per year for clients in 26 countries.

Chief executive and co-founder of the business Fleur Gremen stands to make up to €9.6m from a sale. The company is valued at €80m, of which Ms Gremen owns a 12 per cent stake.

Recent deals in the spread betting and CFD market include the acquisition of IFX by City Index for £57.9m in August this year, and the purchase of a stake in Danish bank Saxo by General Atlantic Partners for €97.8m last year.

Interest in Global Trader is expected to come from both financial institutions and trade buyers.

Capital Spreads Market Commentary

Wow what a day. The US markets decided that Wednesday the 4th October will be the day that dealers remember as the one where American stocks finally cleared the barriers of 2000/2001.

The Dow put on some 120 points the S&P around 160 points and the Nasdaq around 40 representing a rally of over 1% in the first two and 2% in the last. Overnight the US markets have managed to hold the highs of the close and the Dow opens today at 11846-11850. The first time ever that I have used the 118 price level in a commentary.

The FTSE is likely to pick up on this move especially as Oil managed to hit a barrier at around $57.70 and has bounced sharply back to the $60 level. Early calls are for prices around the 6000 psychological resistance and bulls will be hoping that this time everybody's nerve holds and we are able to maintain the break. Capital Spreads opens with 5997-5999 but we are mainly seeing new buyers and short position closings.

Today sees two major events, the ECB rate decision (likely to be a 0.25% hike to 3.25%) and, likewise, the BOE's verdict on rates, although here the consensus is for no move. Dealers must be aware though that there is a significant chance that the BOE (who, oddly enough, are expected to move next month) we pre-empt the expectations and decide on a tightening today.

Currency markets were in two minds yesterday as dealers worried about today's events and about tomorrows Non Farm Payroll data. Although the dollar rallied in early trade by the close all the majors were virtually unchanged, which is where we open this morning. Traders are unlikely to open new positions until after the various central bank announcements which will probably make for a rather boring morning. At 1.8858-1.8861, sterling is consolidating in the (quite wide) 1.8650 to 1.9050 trading range. Our clients are taking any sharp rallies as a selling opportunity and any sharp falls as a buying (!) which (if replicated across the world) is probably why the cross rate appears stuck.

The Euro is even more mired with significant movement a distant memory. At 1.2713-1.2715 the currency remains stuck in a constricting 'Flag' formation with 1.2790 the resistance to the up side and 1.2640 the support underneath. A rate hike today may give the Euro the boost it needs to break out but we have been expecting the tightening for some time now so traders can hardly claim that this will be 'new' news.

As intimated in yesterday's comment the USD/YEN found the air above 118 a bit thin and we drifted back into the mid 117's. It wasn't for lack of trying that the market failed as we traded for much of the morning above 118 and even had a look at the heavy 118.30 resistance at mid-day but in the end the market just ran out of new buying and sellers took the upper hand in late afternoon and retain it this morning. The rate is now at 117.60-117.62 quite close to the minor support at 117.50 but sellers are now proving thin on the ground and we may drift back up for the remainder of the morning.

In the commodity markets our clients obviously never read my commentary as they have, in the main, remained long and wrong of Gold and Oil throughout the falls of recent times. Gold had the expected second phase of price decay and clients were fighting the move every step of the way. The low yesterday at $558.7 finally attracted enough 'bottom fishers' to give us some support and today is likely to see some relief buying and weak short covering which could take us up to the 573 resistance level. Big sell-offs do not (generally) fizzle out after just two days so dealers will continue to be nervous of a renewed rout in the metal markets.

Oil. Well what can we say. The inventories number showed high levels of stock in virtually every petroleum product which caused a swift sell off in mid afternoon BUT we finally found some serious buying in the mid $57's and bulls will be hoping for some support consolidation building in the $58 to $60 region to prevent any further falls. Caution must be listened to though as the market is still in a very definite downward trend and the fact that November US crude failed to actually close yesterday evening above the previous low tick at 59.50 may give some cause for concern. That said we are now up 50 cents this morning in some solid buying at 59.90-59.96.

IG Group says it continues to perform strongly

LONDON (AFX) - IG Group Holdings PLC, owner of financial spread betting website IG Index said that both its financial and sports businesses have continued to perform strongly in the first four months of the financial year.

'Both our financial and sports businesses have enjoyed revenues and levels of account opening substantially higher than for the equivalent period in the previous financial year' said chairman Jonathan Davie, in a speech prepared for today's annual general meeting.

It also reiterated its stance of not accepting bets of any kind from US residents.

Capital Spreads Market Commentary

Bouncy, Bouncy once more. As mentioned yesterday the FTSE was not looking a happy bunny as interest rate fears take hold. Whilst the other major indices managed to trade higher the FTSE spent most of the day on the back foot before a late rally took us to just 25 down on the day.

This morning will see another move to the up side with Capital Spreads quoting the early opening level at 5819-5821. The cause of this is the dual impetuous of strength in the Dax (which is now over 100 points above the UK index) and US markets and a late move higher in Oil and Gold which will bolster the Mining and Oil production sectors.

The Dow and S&P had looked weak in early action but the Housing numbers, whilst showing a fall in prices were actually better than expected and this helped to bolster confidence especially after Fed official Richard Fisher gave his opinion that the economy was still 'healthy and robust'. Fears had been growing that recent figures released by the various US agencies had been pointing towards a slowdown which, although good from a rate expectation point of view, makes it difficult to justify entering the markets at these levels.

The Dow has slipped a little over night down 15 points at 11558-11562 but we are still nearer to looking at the top of the trading range (11670) than attempting a move to the downside.

Equity markets have little to go on this morning with only minor players releasing data. Game Groups total first half sales were up a very good 23% to £273m with like for like sales up 15.6%. The loss for the first half (Game Group make most of their money over Christmas) was halved to just £7m. The shares rallied yesterday by 3p so are unlikely to move much on the numbers but clients are looking to buy so the early call is for up another 1 or 2p on the open.

Currency markets continue to defy the analysts with the dollar refusing to lie down and die. Our various crosses are in something of Mare's Nest at the moment with strength following weakness across the board. The Euro having looked to be carrying all before it has started to look a tad soft as the combined levels of 150 versus the Yen and 130 versus the dollar concentrate the mind. In conversation dealers seem to be positive on the Euro/Dollar but are not willing to be the ones to push it higher. Most will be happy to buy if we break above 130 but do not want to be left holding the currency if yet another failed attempt is made. This morning we have the Euro at 1.2735-37 down 15 pips and the Euro/Yen at 148.23-26 down 35.

Sterling is propped up by the hopes for higher rates outweighing the increasingly poor economic data. The pound has, in recent times, become a reserve currency favorite of Central Banks as they look to diversify away from the dollar to some extent. At above 1.90 our clients are persistent sellers and had a very good day yesterday on the rally up to 1.9070 and the subsequent fall to below 1.9000 in late afternoon. We open today at around the 1.8990 level with some clients holding onto shorts.

Metals had an attempt to the downside yesterday with a solid attack at $582 in Gold and 11.13 in Silver. Both moves were defeated and dealers bought us up to finish just on the side of the Angels by the end of trading. Gold has now traded between 570 and 595 for some two to three weeks and bulls are becoming more confident that a new base is being built.

Oil finally found some buyers willing to risk a flutter as bulls (with a very small 'b') took the slide below $60 as a good value area. Shorts were also in evidence covering positions as the medium term target level (59.50) was hit in morning activity. We are virtually unchanged overnight at 61.47-61.53 in US Crude and 60.82-60.87 in Brent as traders try to work out whether this is just a rally in a bear market or the beginning of something more. Our clients have (for the first time in a while) almost no outright positions as yesterday saw bulls being finally chased out and bears taking profits.

Not surprisingly the markets are looking more powerful this morning as investors digest the stronger US performance and the fact that the latest trading updates continue to show increases in individual equity profitability. The FTSE is called up 25 points this morning at around the 5850 level. Our clients continue to play the 5830 to 5930 range and went heavily long on the lows of Friday and Thursday but they do not appear to be happy with the opening levels and are selling out in early (pre market) trading. Spread Betting companies quote many markets 'out of hours'.

With interest rates likely to go higher in the UK at the next MPC meeting in October and with a good chance of a second hike before Christmas, traders are beginning to worry about returns in the bigger FTSE stocks. With such a preponderance of weighting towards just 4 or 5 stocks the UK's prestigious index is now at the mercy of commodity price activity which is proving to be rather a double edged sword. Governments around the world, struggling to keep their budget deficits under control, are seeing the petroleum and mining companies as an easy source of populist revenue and windfall taxes proliferate. This is making progress in about 30 per cent of the FTSE's overall constituents very difficult.

US markets have a different problem, one of declining growth expectations. The Michigan confidence numbers last week put a definite spoke in the wheels of the continued equity rally of the past few months. Dealers, though, are putting a solidly positive gleam on expectations by anticipating a swift move from tightening to easing in the Feds rate deliberations. With housing hitting a brick wall and now industrial production braking sharply inflation worries could soon be fizzling out to be replaced by the dreaded 'recessionary' fears. Oddly enough a slow down is not necessarily bad for equity markets as investors hunt for returns on capital and dividend flow becomes more valuable. The dow is opening at 11537-41 up 20 points and the S&P at 1317.7-1318.1 up 2.5.

In the equity markets Wolseley have yet again shown that even the most prosaic of markets (plumbing and heating equipment) can be a lucrative one but the latest numbers good though they are when combined with the expected slow down in construction in the US are likely to be taken poorly by traders on the off. The call is for a drop of some 4 to 5% (40-50p) to around 1110-1115p.

Aberdeen Asset management, whom newspapers reported, back in May, that funds under management were increasing by £20M per day actually released a drop over the past 5 months. The shares will come in lower on this but with valuations in the mid teens on a p/e analysis it is difficult to see another serious fall. Shares closed at 167p and will open at around this level (maybe a couple of pence lower).

The dollar continues to struggle as investors start to price in contracting interest rate scenarios. With the UK looking to raise rates and the US to lower them the pound has been the main gainer with dealers reversing sterling shorts under the combined pressure of short covering and value hunting. At 1.9050-53 we are seeing continued selling from our clients as the belief seems to be that the 1.91 level will prove too tough a nut to crack again. The Euro continues to struggle to make headway and dealers are beginning to feel that the promised 130 level may be never achieved! At 127.95-97 this morning we are also feeling the weight of euro sellers.

Commodity markets are looking to the hope that we have reached a solid support in the metals with Gold and Silver holding and bouncing from the 573 and 10.50 levels. Gold is now at 586.5-587.1 but needs some good news to make further progress. Clients have been long for most of the past month or so but are now reducing positions as the market looks to have run out of steam.

Oil is also falling once more as producers, who in the first half of the year were holding back on selling forward production in anticipation of the fabled $100 price are now selling into the market as hopes fade for bounce. We are now well below $60 in the Brent at 59.80-59.85 and longs are being squeezed out as I write.

London Capital H1 profit up sharply

LONDON (AFX) - Spread-betting firm London Capital Group which operates Capital Spreads said its first-half profit rose almost five fold, buoyed by strong growth in customer numbers.

The company, which offers online financial spread betting and foreign exchange trading services, said pretax profit for the six months to June 30 came in at 1.65 mln stg, up sharply from 340,000 stg in the same period last year.

The improvement came on the back of sharply higher revenues, with turnover up 52 pct at 3.53 mln stg as customer numbers soared. The company said it had 6,740 live spread betting accounts by the end of the first half, up 135 pct on the year, while the average number of daily trades rose 191 pct to 4,307.

'We have continued to experience strong trading with encouraging growth in both the number of live customer accounts and the daily trading volumes in the spread betting division,' chief executive Frank Chapman said in a statement.

'All of our business areas have started the second half of the year well and we continue to perform in line with market expectations.'

LCG shares closed at 116-1/2 pence yesterday, valuing the group at about 45 mln stg.

Capital Spreads Market Commentary

Clients had the calling of the FTSE correct yesterday as they bought into any weakness but unfortunately, elsewhere, it was a different story repeatedly selling into the American market move, selling pounds and trying to pick a bottom in Oil.

The old adage of 'don't oppose the market' came to haunt the index bears once more.

The Dow is now flirting with the highs of May at around 11675 and this morning is quoted at 11610-14 and the FTSE unchanged at 5866-68. With the fall out in metals and oil the FTSE has struggled to match the performances of other indices as a good percentage of the index is taken by mining and oil producers (some 22%).

Our clients continue to buy into equities whilst at the same time being negative on the indices, demonstrating a strange divergence of opinion.

William Morrison announced that it was back in the black for the year. The numbers are slightly better than expectations and sales were stronger than the last update implied. The shares should open nicely in positive territory on the plus £134M numbers a swift return from last years disasters. The company was always a 'work in progress' situation as the absorption of Safeway proved tougher than expected. Investors will now hope for this strong performance continuing over the coming months. Early calls are at 240p up 6p.

The forex market was a tale of sterling strength yesterday as inflation numbers pointed to further rate hikes from the BOE. This strength has continued into this morning with cable now at 1.8931-34. It is at this point or slightly higher that we have run into more determined resistance in the past and our clients are pinning their colours on a repeat performance with expectations of a retreat back into the 1.88's. The Euro continues to just mark time with the 1.27 level exerting a fascination for traders. We have now oscillated between 1.2750 and 1.2630 for an almost unbelievable 10 trading days. I don't know which way the market will break but when it does the move could be very violent.

Analysts have their knives out for the dollar once more. In a browse through the various commentary pages there is an almost unanimous dollar bearish view. The problem is that, in the markets, if everyone agrees on a direction it generally means that we will go in the opposite direction!! My dilemma is that I tend to agree with the dollar negative prognosis but I hate it when too many people agree for the aforementioned reason.

Commodities had another grim day yesterday, although Gold made an attempt to rally before drifting lower in late trade. Today sees a bit of stability in very light trade and Gold remains above the support mentioned yesterday at $573 (from where we made a nice little bounce) the early call is at 577.9-578.8.

Oil is opening solidly after the drop of a further $1.5 yesterday. In the last 30 odd trading days oil has only managed to go up on five of them and hard pressed bulls (if there are any left) will be hoping that today will be the sixth opening call is up 20 cents at 60.63-69 in the Brent November.

Delta Index in €2m cash call for Europe expansion

DELTA INDEX, the financial spread-betting company backed by former AIB chief executive Tom Mulcahy, is seeking to tap investors for up to €2m in a fundraising that values the four-year-old company at more than €10m.

Mulcahy spent €500,000 earlier this year on a 7% stake in the company when it was valued at €6m.

Delta Index has raised €2.3m since it was set up in 2002, and counts Dolmen Securities among its early investors.

Delta's founders, finance director Conor O'Neill and operations manager Michael O'Shea, each hold a 22% stake.

The executive chairman, Dermot O'Donoghue, a former head of treasury at AIB, holds 11%.

Risk director Paul Kenny, previously a senior manager at Anglo Irish Bank, and market director, Chris Curran, formerly of Bank of Ireland Private Banking, hold 11% and 7%, respectively.

The company plans to use the proceeds from the cash call to fund expansion into Europe.

It is also gearing up for an increase in interest in spread-betting among the financial community when the Markets in Financial Instruments Directive (MiFID) is transposed into Irish law early next year.

This will bring the industry under the ambit of the Financial Regulator.

Currently, Delta Index falls under the auspices of the customs and excise department of the Revenue Commissioners as it has a bookmakers' licence. Other operators, such as WorldSpreads and IG Index, apply standards set by the Financial Services Authority in Britain.

Financial spread-betting allows people to speculate on the movement, both upwards and downwards, in shares, stock-market indices, commodities, currencies and interest rates.

The initial outlay on a trade can be as low as 5% or 10% of the value of the transaction.

Delta Index is also looking to extend into contracts for difference (CFDs), another instrument that gives buyers leveraged exposure to the movements of financial assets.

The company's most recent set of figures show that it made a loss of €475,580 in 2004 on sales of €478,580.

Accumulated losses stood at €946,046.

At the end of 2004, Delta Index had €1m cash in the bank, but current liabilities in the region of €1.5m.

TD Waterhouse launches financial spread betting

Execution-only broker TD Waterhouse has unveiled its new online Financial Spread Betting service.

"Financial spread betting is a highly adaptable trading tool enabling investors to gain access to a wide range of markets in an easy and cost-effective manner," said TD Waterhouse UK chief executive Michael Foulkes.

"Our customers will be able to gain exposure to indices, equities, currencies and commodities on both UK and international markets."

Spread bets mean investors just need to deposit a small percentage of the full value of their trade. On most shares the minimum deposit is between five and ten per cent of the underlying value of the shares.

Financial spread betting is also exempt from the current capital gains tax regime and stamp duty.

Spreadbetter IFX backs 58 mln stg takeover plan

Currency trader and spread-betting company IFX Group Plc said it would back a 58 million pound takeover plan by rival City Index, which made an initial approach in March.

City Index has offered 180 pence in cash per share, or around 57.9 million pounds.

"The IFX directors have considered the implications for all stakeholders in IFX of the options available and have concluded that the offer represents the best course available," IFX Chairman Adam Mills said in a statement on Wednesday.

Shares in IFX, which was listed in 1965 and provides financial, commodity and spread-betting services to institutional and retail clients, closed at 181p on Tuesday.

Capital Spreads Market Commentary

Well, the Fed have finally decided to pause for a while in their rate hiking cycle and for most analysts it is not before time.

The US economy has been showing increasing signs of strain over the past four to five months and there is a serious worry that, at 5.25%, rates may be too high anyway. Central Banks have been concerned with the inflation genie over the past few years and have responded by their normal rate tightening strategy. Unfortunately the inflation has been caused, in the main, by raw materiel and fixed asset price rises not by the high street or wages. This may mean that all the effect that rate hikes will have is to actually increase inflation rates as retailers (not consumers) get squeezed from both ends. Raising interest rates in the US is not going to make much difference to the price of Oil or Copper.

The FTSE which was being called some 20 points lower last night is now due to come in at about 5 points up! Our clients who were long overnight and looking a bit sick are happily getting out of their positions this morning. The UK market may have a bounce this morning but yesterday's price action where we opened some 30 points higher and closed 10 points down (when all other major markets were going in the opposite direction) does not fill our clients with too much bullish vigour. The FTSE is called at 5824-26.

The US is now 25 points up on last nights close at 11206-10 and the Dax is following the FTSE and is up 5 at 5656-58.

ITV came in with poor figures this morning with revenue at £173m at the lower end of expectations. The shares suffered yesterday as Charles Allen announced his resignation (as expected) and fell on his sword. This morning may see one of those classic bounces where the market falls on the rumour but then rallies on fact. Early call is at around 97p from 98p yesterday.

Currency markets were whipped around yesterday on the Fed announcement but then settled almost unchanged on the day. Dealers attempted to first sell the dollar on the release then buy it but both moves ultimately failed. This morning saw another attempt to shift from the current levels with an early sell off for sterling but this was defeated again and we are now at unchanged on the day at 1.9072-75. Resistance is building up at the 1.9125 level which is likely to cap any move higher this morning whilst to the down side support at 1.9030 and 1.8970 is also likely to hold steady.

The Euro, which has been marking time for over a week at these levels, is looking firmer than the pound this morning and we are seeing a few EUR/GBP buyers at the 0.6730-0.6732 level.

Gold is worryingly weak in early trade with prices at 638.7-639.3 down $7. Having rejected the 650 level again yesterday bulls appear to have temporarily lost their appetite and if support at these levels gives way we could be in for a serious down day.

Oil gave up on breaking into new highs in rather quiet activity yesterday. Given that we are hammering on a break out watchers may have been excused for expecting more drama. Our clients are now short but have tight stops in place on any further buying pressure. US sept is at 76.40-76.46 and Brent is still 130 cents higher at 77.74-77.79.

Yesterday saw the FTSE open 50 points lower and today see almost the exact opposite.

Those of you with a technical bent may be interested in the possibility of a positive reversal formation created by the two shifts which could demonstrate a solid rejection of lower prices. That being said we are getting nothing but sellers in early markets with the call at 5866-68.

All markets were pretty quiet yesterday with tight trading ranges the dominant feature. The US session managed to trade virtually the entire range in the last half hour before closing on the highs. The dow is still caught just below the 11300 resistance where we have had a series of failed attempts but the sell offs are becoming weaker and bulls will be taking comfort from the fact that a 150 cent rally in oil to new highs had little negative impact. Early calls on the Dow are at 11248-52 up 30 points.

Scottish and Newcastle recorded good figures but in time honoured fashion, not quite good enough for the markets. The results were towards the top end of expectations at £187m and the trading statement was also positive. So of course the shares are down 10p at 520.5-521.3! Our clients are not so disappointed and we have seen early interest on the buy side.

Standard Chartered (the last of the FTSE100 banks to report) have opened higher on anticipation of good numbers due at 9.15 this morning. Oddly enough we are seeing selling here on the open with the shares at1325.1-1327.1 up 16p.

Sterling continued its strong performance of recent days, looking solid versus the dollar and putting on solid gains against the Euro and Yen. Against the yen the pound is now at new highs (as is the Euro) as the Yen suffers from cost of carry problems. GBPJPY is at 219.26-219.34. Sterling bulls will be hoping for test of the old highs against the dollar recorded in late 2004/early 2005 at 1.9225/1.9325 and 1.9550. Against the Euro the pound is at highs for the year at 1.4841-1.4845 as fears over trade and government deficits are outweighed by interest rate considerations.

Cable is stuck just below 1.9100 where much of the early activity on Monday took place. Our clients are selling at any attempt to break this level and are sitting on nice positions with the price now at 1.9052-1.9055.

Gold flattered to deceive tempting buyers above $650 as the potential for a break out appeared to be on the cards. After a surge in early afternoon the rest of the day was defined by a steady drip, drip, drip down. Bulls are in a difficult position at the moment as over the past 5 trading sessions we have had repeated attempts to get over the 650 level only for buyers to run out of steam. On the other hand in the low 640's we seem to also be running out of sellers so it would appear that a break and close below $641 or above $654 could be what we need for the next move. Gold is now at 645.7-646.3 down $2 this morning.

Oil was the only interesting game in town yesterday as Brent surged ahead putting on more than $2 before grinding to a halt at the same all time high (to the exact cent) at $78.61 as in the last move higher in July. There has been an initial push lower this morning but buyers are definitely in a buying frame of mind and any approach to the aforementioned level could well see a sharp shift up once more. Brent is at 78.28-78.33 in the morning session.

With US unemployment shifting unexpectedly higher the initial reaction was for buyers to come into the market as investors concentrated on the potential for lower rates. It was only after a few hours that the older hands (who can actually remember what a recession means) popped their heads above the parapet and muttered things like 'revenue squeeze' and 'stagflation' which gave the bears their chance and down we came again.

This marks the third failed attempt since the May sell off to break back above 11300 and dealers will be very nervous going into late summer on such a poor note.

This morning sees the Dow down another 25 points at 11224-28 but the FTSE will be the big loser on the open with calls for fully 50 points off on the open at 5840-42. This kind of out of hours shifts fills dealers with anxiety and can cause bear moves to be far greater than would, at first, be indicated by fundamentals.

Easyjet have maintained their profit forecast for the year which is not that surprising as passenger volumes are still well up and oil is only marginally higher over the past 12 months. With net revenue forecast to be 40-50% up on the previous performance the shares look cheap but there are various things bubbling up to possibly cause investors some worries. Cheap flights are becoming the latest bete noire of the eco warriors and some politicians in their ever widening attempt to grasp votes from wherever they can coupled with an easy tax target will probably add another 'Green Tax' (don't make me laugh) to swell the treasury's coffers even more. Easy Jet were called to open at around 430p this morning.

Currency markets are still digesting the rather poor US data from Friday. Weak employment growth coupled with inflationary pressure do not make for a happy mixture and the dollar was quite rightly sold off. The problem now is that if these are the US numbers can the rest of the world be far behind? The old saying that "if America sneezes, Europe catches a cold" may not have quite the power it did but it still a factor nonetheless. The US is still Europe single biggest trading partner by far.

Cable is drifting this morning as dealers take some profits in early trade but so long as we remain above 1.90 bulls will be in the driving seat. Unfortunately Traders will be well aware that although Cable has finally broken through the long term dollar resistance levels the Euro and Yen have not. Until the Euro gets over 1.2975 and the Yen below 113.75 we remain in the overall trading range of the past 4 months. Sterling is at 1.9062-1.9065 down 20 pips and is likely to be the weakest of the none US currencies in the short term.

Gold should be the big gainer of all of this. As investors worry about recessionary potential there will be a drift towards safe haven products. This morning has gold back up $6 and above $650 once more. Clients are cautious buyers at these levels but are quick to get out on any signs of weakness. Gold is at 650.0-650.6.

Oil continues to whipsaw around tempting first the Bulls and then the Bears. Buyer had hoped that the move last Wednesday had pushed us over resistance above $76 only foe sellers to push us below the level at the close and then Bears were tempted in by the seeming failure at this point. Unfortunately both were caught out and this mornings leap in Crude will not help our clients who went to bed short on Friday and are now 'caught' by a full 130 cent rally on further Middle East problems. September Brent is now at 77.21-77.26, unusually trading at a premium to US Nymex at 76.00-76.06.

City Index snaps up IFX

Spread betting company City Index has agreed to snap up financial trading platform operator IFX Group.

City Index and IFX announced today that they have agreed a recommended cash offer priced at 180p per share, valuing IFX at £57.9m.

The offer comes at a 15% premium to IFX's share price on 25 April, when it was announced City Index was considering a bid for the company havinga lreayd been rebuffed a month earlier.

The bid looks likely to proceed smoothly with City Index having already secured support from nearly 60% of shareholders in the group.

City Index chief executive Clive Cooke said, "We believe the offer represents the next logical step for City Index and IFX, as it will provide opportunities to utilise economies of scale in what is now a retail electronic trading business."

Capital Spreads Market Commentary

With the Non Farm Payroll due out tomorrow we are expecting a quiet day today. The last three releases of this number have triggered heavy sell offs in the market (May June and July) and we are likely to find that traders are very cautious heading into Friday. On top of this we have the ECB rate announcement this morning which although well forecast is likely to be a bit of a dampener.

With that in mind it would be expected that a small sell off over the next day or so would be likely as longs moderate their positions into the releases.

This morning sees most markets opening unchanged but our clients have already come in on the sell side looking to offload the FTSE above 5930. Early calls are at 5934-36. There is a similar story in the Dow and the Dax with clients definitely not happy with the levels reached over the past week.

Today is a huge day for corporate news with Barclays, ICI, GKN, Rio Tinto , Trinity Mirror, Unilever and Taylor Woodrow all giving interim statements. On the whole the general numbers were good but the trading sentiment was cautious. The big investors will be looking for future consideration rather than historical data and with any corporate statement that is not absolutely, wonderfully positive sellers tend to have the upper hand.

The FX markets are (as you would expect) very quiet this morning. Dealers will be expecting a rate hike from the ECB which may give the Euro a boost at midday but this has been anticipated for some time and it may be a case of buy the rumour sells the fact. At 1.2780-82 we have two way business with buyers and seller matching off almost exactly. In cable we have almost the same situation. Our clients have (in total) some 250 open positions but the net exposure is just £4 a point! Dealers rejected an attempt to rise above 1.8800 yesterday but the general feeling is that Sterling remains the best performing non US currency at the present time. At 1.8760-62 we are seeing little interest.

Gold tried to push above 655 yesterday but our clients felt that the market was just a little cold up there and sold out of most of their long positions. At 649.3-649.9 this morning there is likely to be a small amount of protection buying versus any major hiccups in the NFP tomorrow but on the other hand with ECB rates probably going higher there is yet another reason for getting out of Gold into cash.

Oil like Gold had a look at the resistance levels above the market yesterday but decided there was not enough in it to go higher just at the moment. The Inventory numbers were slightly weaker than expected which gave us the initial boost but with no new problems in the supply chain forward worries are not (at least) getting worse. We need a close above $76 to trigger further buying or a close below $73 to get the sellers involved. In the meantime we are range bound between these two levels which is giving our clients some nice opportunities for trading levels.

IG Group's year earnings jump

IG Group - Britain's biggest spread-betting company, posted a 51 percent rise in core profit to 52.6 million pounds on Monday and said a return of cash to shareholders was becoming more likely.

The company, which allows investors to speculate on currencies, interest rates, shares and indices, had said in an earlier trading update it expected earnings before interest, tax, depreciation and amortisation (EBITDA) in the year to end-May to come in above 50 million pounds.

IG, which has grown revenues at a compound rate of around 40 percent over the past eight years, said turnover rose 44 percent to 89.4 million pounds and that current trading was strong.

Shares in IG were up 3.7 percent to 209-1/2 pence in early trade, the second-best performer in the UK mid-cap index <.FTMC>.

Numis Securities described the results as "stunning", particularly with average revenue per client rising to a new high of 2,715 pounds.

"Client acquisition appears to have accelerated as the year progressed and seems to have maintained momentum. This bodes well for the coming year," said Numis in a research note.

IG said its financial spread-betting business had its most successful year. Revenue at the unit, which accounts for 61 percent of revenue, jumped 47 percent to 54.8 million pounds.

The company said equity market volatility was subdued for most of the year but jumped dramatically in the last two weeks of May. However, IG said it had no loss-making days and that volatility in its own daily revenue remained low.

"The company's shares have pulled back with the rest of the betting stocks recently, despite not taking bets from the U.S., and we think this is unjustified given the growth prospects of the company," said Bridgewell Securities analyst Geoff Miller.

Miller, who had forecast EBITDA of 50.9 million pounds, said IG's price-to-earnings multiple of 15 times current year earnings "may not look cheap, but these results demonstrate the growth prospects and suggest that it is a price worth paying".

IG's Chief Executive designate Tim Howkins told Reuters any cash return would depend on the pace of industry consolidation, but said such a move was on the cards because otherwise the company would amass an "embarrassing pile" of cash.

"Clearly the business throws off a lot of profit and a lot of cash. At the year end we had 45 million pounds of our own funds and a 30 million pound regulatory capital excess, which is actually the more relevant number. Clearly both numbers will continue to rise quite dramatically," Howkins said.

The company has proposed a maiden final dividend of 4 pence per share, bringing the full-year payout to 5.5 pence. The dividend is now twice covered - as set out in the prospectus.

Howkins said any move to return cash would depend partly on the level of takeover activity in the industry.

"There is still the faint possibility of some sort of industry consolidation. Some of the competitors are beginning to look a bit tired and stale," he said. "Maybe at some point one of those will come to a realisation of what their business is actually worth and decide to get out. We would be interested in a purchase of a client base at the right price," Howkins added.

Howkins, IG's former finance director, is preparing to formally take over as IG's CEO after Nat le Roux announced two months ago he wanted to step down from the post he had held for more than four years. Le Roux has stayed on as non-executive deputy chairman and works as an IG consultant one day per week.

Past Spread Betting News