The market has opened a little lower this morning, but only due to some 9 points being paid out in dividends, so really we’re flat on the day.  The 5600-50 area has proved too high a hurdle for the FTSE, and just beyond here, if we push higher, stronger resistance is expected around 5690-5715.  It’s surprising to see the market isn’t weaker after US indices made a U-turn last night, and after news from that new Chinese banking lending has declined further.  That has triggered a sell-off in the past, but not so this morning.  So for now we seem to be happy just drifting sideways at this 5600 level, waiting to see how the European situation will unfold and whether financial markets will be further curtailed by the politicians.

As mentioned would probably be the case in yesterday’s comment, the Greek prime minster received a lukewarm response from US president Obama when he visited to try and drum up support for banning short selling of CDSs in the debt markets.  Although Obama has other plans up his sleeve to increase regulation, it’s good to see that finally someone is willing to listen to the financial markets and take them at face value.  A restriction on market practices will do absolutely nothing to help improve Greece’s fiscal situation, and could even make it worse, just as we saw with the ban on short selling financial stocks in 2008.

The Barclays news comes as a bit of a surprise, and it’s bizarre to see a bank show its hand so blatantly.  As the FT’s source mentioned, if it’s going to do anything, it’s going to be big, so giving the market advanced warning may not be such a bad idea.  Needless to say investors in Barclays are using the news to bank some profit from its strong run of recent, with the share back below the 340 mark.  One has to question the timing of such a move, when sterling has suffered hugely against the dollar in the last few weeks, a takeover of a US bank will be much more costly than it would have been last summer.

Economic data, as it has been throughout the week, is a little thin on the ground, and has the UK industrial production numbers due out this morning.  Once again, the weather is expected to have seriously hampered manufacturers which will offset any increase in gas and electricity production.  The expected decline today though should be short lived and we should see a bounce back next month as conditions normalise.

Cable is again suffering, as today’s daily poll shows another small narrowing of the Tory lead.  Currency traders seem to be monitoring the UK election polls closely and selling the pound whenever they narrow or buying it whenever it expands.  When Gordon does eventually dissolve parliament, we could see some serious volatility, particularly when the circus act of three way debates gets underway.  Back firmly below the 1.5 mark this morning, bears will be eying up 1.4800 after the cross has already breached support around 1.4935.

Gold recovered from what looked like a possible rout, but the precious metal also looks to be trending within a small trading range at the moment, drifting from highs and lows.  The bounce off 1110 is encouraging for the bulls, who would like to see gold have another look at the 1140 area to see if there’s momentum to push onto new highs.

Oil is surprisingly weaker this morning despite gold’s strength, but it too had a good bounce off the $80 level and is sitting just above $81.  Traders are waiting, poised, to see the release of oil inventories this afternoon.  The hourly chart looks bullish, but zoom out and the daily looks like it’s forming a massive head and shoulders pattern, so a big correction to the downside can’t be ruled out.