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Wednesday, July 9, 2008 Morning Update - 10/07/08

The FTSE is currently indicating a sharply lower opening. Traders are hedging their bets ahead of the Bank of England's interest rate decision. Judging by the futures market, traders are counting on a rate hike. It looks like the BOE is between a rock and a hard place, having to choose between controlling inflation or saving the UK economy from entering a recession it seems like traders are convinced that the BOE will chose to control the spiraling inflation this morning.
Oil pulled out of a steep two-day slide yesterday after US data showed a big drawdown in crude inventories and OPEC-member Iran conducted missile tests that raised risk premium in the price of oil. We believe that oil is heading back to its 140+ levels.