Today still sees the markets stuck in the trading ranges of the last few weeks with the FTSE (aside from a brief attempt to the upside last Friday), having traded a 100 point range for eleven trading sessions in a row. To be honest, with the market opening this morning quite unperturbed at around 5650, today does not look like a day for fireworks either.

This said, the resistance at 5650-5660 mentioned yesterday is still in place and was only occasionally threatened late in the session. The market managed to trade (almost exactly) the entire range mentioned in our comment 5580-5660 so readers (and believers) should have done well. This range remains in place today but we are starting towards the top of it so (unsurprisingly) our clients have been building solid short positions, there should be a wee bit of caution in the wind at this point as the pressure is still undoubtedly to the upside so day traders may look to be quick to get out if the FTSE drifts much above 5665 or so.

At 09.30 we have the UK CPI due for release and dealers should focus on this as it is expected to come it at a rather nasty 0.6pc for the month leaving the RPI number still up at 3.7pc. According to the Treasury the inflation spike is expected to start falling soon and we must genuinely hope that this happens as otherwise the BOE will have to fight on yet another front. If plus 3pc become endemic in the system the bank may be forced to raise rates faster than the economy can stand… we are walking a very thin tight-rope.

Over in the US we will have the Existing Home sales number due at 14.00 this afternoon and this is also expected to be slightly negative but, due to the extreme inclement weather in the US over Feb, dealers may decide to view any poor data favourably.

The US and UK indices markets are now clear of the January Highs but rather unnervingly the European markets remain unconvinced and the Dax at 5995 is still some way from the peak of 6095 reached on the 11th Jan. It is a moot point as to how far the FTSE can move versus the Europeans but the weakness in Sterling is most definitely helping out on an absolute ‘number’ basis. The S&P has managed a very strong performance in recent months but there is strong resistance from 1175 to 1190 and day traders may be loath to be too aggressive to the upside.

All in all the indices markets look primed for a big move in either direction but it is anyone’s guess as to which way it will all go.

Sterling is being sold off again this morning and frankly this seems to be the way of it at the moment. With two political parties making rash promises in attempts to gain power the room for the needed aggressive budget cuts is getting slimmer by the day and the election campaign has not even really got going yet (what on earth will be announced when the starter does finally fire). BUT we do have the budget this week though and Captain Darling has started to sound more hawkish notes recently so shorts may come in to lighten their positions slightly just ahead of the speech. At 1.5020 currently we are in a bit of no mans land. Well above the 1.4900/1.4950 support region and well below recent daily highs (1.5390 last week and 1.5100 yesterday).

Gold had another look at the sub 1100 region as well yesterday but failed at the same old support at around 1090 (there are several levels below 1100 at 1090, 1075 and 1060) but the rebound today looks to be running into treacle above 1104 so speculative longs from yesterday have been taking profits in early action.

Oil turned around yesterday on news from a professor that reserves were some 1/3 lower than current estimates would have them (this is, in fact, very old news well known to the market). His estimate that demand would outstrip supply some time in 2014/15 may or may not be right but there is a lot of black stuff to be pumped between now and then and this type of report (while possibly remaining very much true) will be forgotten this time next week.