Morning Call by Traders University

The FTSE 100 finished down 54 points to 4135. London’s leading shares ended well in the red as banks weighed on the benchmark index with Lloyds ending the day back in negative territory. By the end of the day, Lloyds fell back down again as fears grew that it may need more funds cover the black hole at HBOS. Meanwhile, Gordon Brown today insisted that he had no regrets “at all” about giving the thumbs up to go ahead with the merger. The Dow closed on Friday with a loss of 82 points. The index continued to hold above the major lower trend line that had formed beneath the lows of the last five weeks based on the 60 minute bar chart. We have to be watchful of big reversals off lines like this in the form of a bullish inverted head-and-shoulders pattern that could spark big strength today as it breaks the neck line at 8,000. Otherwise we could look for another test at lows at around 7,700 if the index remains beneath 8,000. Forex News: Experts are expecting inflation to show a further sharp fall as recession pressures continue to mount. Steep discounts on the high street and a drag on firms’ pricing power is set to push the Consumer Prices Index (CPI) measure of inflation from 3.1% to about 2.7% in January, although one leading economist is looking for a fall to 2.4%. Experts also predict that Retail Prices Index (RPI) inflation - including housing and mortgage related costs - may fall into negative territory for the first time in nearly 49 years, further stoking fears over deflation. 9:30am GBP CPI y/y is expected at 2.6% (higher than previous number). EUR German Economic sentiment at 10am is also expected to be slightly better at -26.5. Finally USD TIC Long-Term purchases figures are out 2pm.