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Thursday, February 5, 2009

BetOnMarkets Afternoon Report

The debate still continues over exactly how to rescue the troubled
banking sector, but today's fall is all about something more old
fashioned, more tangible - Namely the state of the recession. Banking
shares have stabilised over the last couple of weeks as confidence grows
that financial apocalypse has been averted. Now that the battle for the
banks appears to be reaching an impasse, attention is turning once again
to the wreckage of the global economy.

After yesterday's better than expected ADP employment figures there was
some hope that the US economy was seeing the light at the end of the
tunnel. Unfortunately, today's unemployment claims data has extinguished
any such hope. The worst unemployment claims data since 1982 comes amid
company earnings that are worse than already dire analyst expectations.
Recently Kraft foods, Disney and Microsoft all fell well short with
their earnings.

Today the Bank of England cut rates to 1% as widely expected and at the
same time, the ECB signalled that it may cut rates in March. Despite
today's cut, it has been a good day for Sterling, especially against the
euro, as traders adjust their positions in light of the strong rate cut
hint from Trichet.

There was some positive news from the Halifax housing report which
showed that UK house prices rose last month. However, it is hard to read
too much into this as the data conflicts with the previously released
Nationwide report and month to month figures are often subject to wide