Financial Betting Articles

Show me the way

The markets certainly felt a lot calmer last week but maybe that's because we've all become a bit immune to big swings and huge reversals. There's a lot of squawking about "great buying opportunities" but you won't be surprised to hear that most of this comes from (big fat greedy) fund managers. At the moment it's a shiftless delinquent of a market that needs grabbing by the collar and dragging down the street by its Mum.

In this instance Mum is the Old Lady of Threadneedle Street and the ne'er-do-well absentee father is the European Central Bank (stick with it). They both have to take parental responsibility this week and what they do to interest rates is going to be their way of laying down the law to their idle offspring.

The Monetary Policy Committee seem keen as a bean to ratchet up rates sometime before the end of the year. But the current financial turmoil makes it unlikely that it will do that this time round. Inflation is heading in the right direction and the house market is slowing so there really isn’t any need to tighten the screw just at the moment.

A rate rise in the Euro Zone looked nailed on in the face of inflationary pressure at the start of August. However ECB top dog Jean-Claude Trichet's comments last week suggest that it's not a done deal in light of recent developments. French president Nicolas Sarkozy certainly liked the sound of that.

Similarly, there isn't a great appetite for a rate rise in Germany, Europe's largest economy. Disappointing unemployment data last week and the rescue of two German banks mean that a rise would be most unwelcome. So you have a Non and a Nein - but that's all Greek to me.

The outlook is for the financial markets to get a dose of soft love from the central banks. It's a bit like taking young offenders to Alton Towers. Anything not to rock the boat. A big fat dose of tough love in the shape of a rate rise would send spell tears before bedtime and the markets wailing all the way down to the depths. And I wouldn't put it past our European cousins to roll in drunk and thrash the pants off their markets with a rates stick.

Of course, happy go lucky Uncle Fed could stop by with a rate cut at any time and the markets will jump a mile again - and if you get on that spike then you could ride it to the moon. Why not stop by ChoiceOdds.com and turn your view into some dough?

The FTSE fell 117.9 ticks on Tuesday, breaking a run of six days of gains. It then closed up for the rest of the week.

In July, the FTSE closed down on 13 days and up on 9. August saw the opposite, closing up on 13 days and down on 9.

Wall Street was comparatively steady in August, with the Dow up on 11 days and down on 12.

US Labor Day is only celebrated by left-leaning Democrats. So head to the East or West seaboard if you want to party tonight: the midwest will not be rocking.

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