Morning Call by Greg Secker

Yesterday, the FTSE 100 closed up by 66.91 points to close at 4,756.58. The index saw a broad based recovery, with miners, oils and financials showing strength. Yesterday, the Dow Jones industrial average gained 70.89 points (or 0.76%) to end at 9,350.05. Yesterday, the Nasdaq Composite Index climbed 19.98 points (or 1.01%) to close at 1,989.22. The S and P 500 index was up 10.91 points (or 1.09%) to finish at 1,007.37. US stock increased for the 3rd consecutive session, financial stocks showed gains after US manufacturing data and a rebound in Chinese stocks improved risk appetite.

In July the figures from the Office for National Statistics (ONS) showed that government net borrowing hit a record £8bn following a slump in tax receipts. Receipts are shrinking faster than the Treasury had predicted. Alistair Buchanan, chief executive of Ofgem, the energy regulator, has had a meeting with some of Britain’s largest energy companies after it emerged they were forcing as many as 250,000 small businesses to pay for their energy up to seven months in advance. There is increased concern that this could put these companies into difficulties. Yesterday, the government cut the price of its £5bn credit insurance guarantee scheme to help protect suppliers from the collapse of their customers. The scheme lets suppliers buy six months of government-backed insurance to either restore cover to its original level or to double the amount they can obtain from the private sector. British businesses are more confident about their trading than they have been for 13 months, According the Lloyds TSB Corporate Markets Business Barometer, 30 per cent of businesses questioned in July expected their business activity to rise over the next year. The Council of Mortgage Lenders (CML) said yesterday, gross mortgage lending rose 26 per cent in July on the previous month but remains 36 per cent down on 2008. The Obama administration said yesterday, the US’s ‘cash for clunkers’ scheme will end on Monday. The government said the scheme was “an overwhelming success”, the program was called to a halt to make sure Congress does not exceed the allocated $3bn for the project. A stabilising US financial sector has allowed Barack Obama to trim 2009 budget deficit projections. Officials said, the White House budget office will lower its deficit forecast next week for the current fiscal year to $1.58 trillion (£95bn) from $1.84 trillion after removing $250bn set aside for bank bailouts. The Industrial and Commercial Bank of China (ICBC) (which is the world’s largest bank by market value), posted a 3 per cent rise in net profit in the first half from the last year.

Cable is firmer from earlier trade; presently up at 1.6491 but still currently below its open. Technical supports 1.6420, 1.6400 and 1.6375, resistances 1.6495/00 and 1.6515/25.EUR/USD has ticked higher in early trade, presently at 1.4250. The low so far has been 93.49 in USD/JPY and it is certainly unusual to say that USD/JPY is leading the way but that has been the case today. It is currently climbing back up to the 94.00 mark.

This morning, Gold is at, 941.00 USD, Copper 273.35 USX and Brent Crude 73.16 USD.

Due for release today there are the USD existing home sales and Eur-Zone Purchasing Managers Index.