Morning Call by Traders University

The FTSE pushed down during the day yesterday but ended the session near enough where it opened. Closing down 3.4 points at 3987, it seems the index is awaiting the budget announcement due at 12.30 today. Lloyds, RBS and Aviva where among the indexes worst performers for the day all losing between 6 and 9 per cent each as investors sold the stock in large quantities. Yesterday the Dow Jones industrial average jumped 128 points or 1.6 percent to 7,969 after tumbling 290 points Monday on worries about bad debt at banks and the implications of the stress tests. Stocks fluctuated in the early session after a string of lackluster earnings reports and forecasts fuelled worries about how quickly the economy can recover. Bank stocks, which led the market lower on Monday, bounced back after the US Treasury Secretary asserted that “the vast majority” of banks have enough capital. JPMorgan Chase rose 9 percent and Citigroup jumped 10 percent. The fortunes of bank shares have largely dictated the stock market’s direction since the fall of Lehman Brothers in mid-September, and investors took these comments as a reason to go back into the market. Some analysts attributed the buying to short covering, where investors have to buy stock after having earlier sold borrowed shares in a bet that the market would fall. There is significant Forex news from the UK today so FX traders should steer away from trading sterling. At 9.30am we see the GBP Claimant Count Change which reflects change in the number of people claiming unemployment-related benefits during the previous month. This number is expected to be down, from 138,000 previously to the forecast 118,000. Also at 9.30am, the MPC Meeting Minutes are released providing a detailed report of the Bank of England MPC’s most recent meeting and important economic insights. At 12.30pm, we see the UK’s Annual Budget release from the Treasury. At 2.00pm, Treasury Sec Geithner speaks about the ongoing efforts to address the global recession at the Economic Club, in Washington DC. With regards to GBP/USD, better than expected CPI data gave the pound a temporary boost yesterday.