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Tuesday, June 24, 2008 Morning Update

The FTSE is currently indicating a flat open, however this does not meant that it will be an uneventful day. On deck there are a few economic releases from UK which will influence the market during the morning session. The Nation Wide Price index will be release before the FTSE opens, and we believe the number will come below the forecast. This will have a negative effect on the market; as a result we believe the market will open on a weak note. The rest of the day we expect traders to be on the sidelines ahead of the FOMC statement due after the close of FTSE. Our expectations is for no move along with relatively unchanged statement from the Fed, although we expect some note of ??upside risks?? to inflation given that crude oil has risen so much since the last meeting.

Gold was weaker during Tuesdays trading session as traders are paring down their holdings ahead of the FOMC announcement. While inflation is positive for gold prices, the risk that the FOMC will actually raise interest rates and make the US dollar a higher yielding investment has been hurting the precious metal. Oil is continuing its attempt to reach the all time high, ignoring the fact that there is a slowdown in US demand and the restoration of output in Nigeria.