Ummmm … FTSE is almost exactly where it was yesterday morning in fact pretty much where it was all day yesterday. The BOE decision was as expected and there was nothing to really disturb the peace. We are not expecting much in the way of action until 0930 when the Trade Figures and PPI numbers are released.

The trade figures have not made for particularly good reading recently as a recession is supposed to contract the number closer to zero (whether you are in surplus or deficit) but the UK’s data is actually going in the other direction. Mervyn King muttered about a weak currency helping exporters but I have to say that this commentator is yet to see any evidence of this and, in fact, historically across the globe I am always wonder where economists get this idea from as a perpetually weak currency never seems to have this effect. The latest manufacturing numbers were truly appalling for an economy supposedly emerging from a recession with a further (big) contraction as opposed to the expected small rise. The numbers have been slightly ignored as we hope that they might have been an aberration but continued weakness here would start to put at risk all the hopes for 2010.

Interest rates in the UK were held again yesterday (it would have been very surprising to see anything else) and 0.5pc looks pretty well set for the next half year or so as well. The only fly in the ointment would be if the weak currency started to ignite inflation (as economic activity is unlikely to do so). The recent strength in the housing market seems to be cooling off and (as with the reported green shoots) much of this might have been influenced by the historically low mortgage rates and the huge injection of liquidity from the Treasury.

The FTSE is looking to open at around 5145 still within striking distance of the 5200 resistance which is where we have been for much of the last four weeks. Dealers will be hoping for and attempt at the level but it must be admitted that even if we do break higher there may be a sense of ‘last gasp’ about it. While our clients are being cautious there is a definite sense of building small shorts at the current levels and, looking at the technicals, we might conclude that the 5200 level is showing signs of being a ‘bridge too far’ just for the moment.

All the major Western indices are showing signs of fatigue at the current levels with the Dax, Dow and S&P also hammering at the same resistance highs which were put in place in mid September. If they all ‘go’ at once there could be an almighty spike higher but we really need some definite piece of good news to make the move. It is unlikely that today will deliver the impulse but if it does we could be in for a ride as a Friday move is often dramatic. Recently Friday’s have either been very good or static as the pressure higher builds up during the weeks sessions and then shorts get driven out not wanting to risk the weekend.

Oil had a weird day with an initial indication of weakness dramatically reversed mid afternoon resulting in a low high move of over 3 bucks in just a couple of hours. Today we are drifting lower again and the roughly 66–73 dollar range mentioned ad-nauseam in these comments still looks to be intact with no real pressure on either end. At 71.00 for the November Nymex we are nearer to the top of the band and we must fear that the pressure which has been flattening of recent months might be building for another shift to the up side.

Gold has retreated from the 1061 highs of yesterday as the dollar has recovered some ground and longs have been exiting from positions in droves. Has the last few days been the spike move to drive out the shorts that many have been waiting for? If so the reaction sell off would be extremely vicious. We are now at 1044 down 10 bucks on the day. If we fall below 1020 (still 24 dollars away) we would be back into the recent trading range and the break out might be considered a failure. The dollar seems to be the key to events and while the Fed continues to operate its undeclared weak greenback policy precious metal will probably remain on the buy side. But… If the dollar starts to recover…