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The FTSE is currently indicates a lower open as traders await the release economic data regarding the state of the UK banking sector. Economists are wondering how well this sector is doing, especially the mortgage industry. An increase in approved loans could signal that the banking industry is once again ready to lend money to the public.

Oil should be front and center as Hurricane Gustav makes landfall around the time London closes for the day. There are rumors that Hurricane Gustav is going to hit the oil producing area of the Gulf of Mexico. This could result in the price of oil retesting the record price set earlier this year.

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The FTSE currently indicates a flat open, as yet again traders will be looking towards the US economy for guidance of the equity market. Today the US department of commerce will be releasing the US 2nd quarter GDP numbers. Economists are expecting a growth of 1%. If the numbers stay positive, this will be a clear indication that the economy is on the verge of recovery.

Oil has been benefiting from the hurricane season.  As the black gold has gained 3 dollars in the last week since the news that hurricane Gustav has forced New Orleans to start making evacuation plans. If the GDP number comes out better then expected, look for the price of oil to spike north of 120 dollars per barrel.

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European markets opened on the back foot, this morning due to the sustained sell off on Wall Street last night. The FTSE has struggled to catch up after the Bank Holiday day off and judging by the volume of today’s trading activity, many traders may have taken the chance for an extended holiday.
 
 US markets are mildly positive after better than expected new home sales data. The S&P Case-Schiller house price index fell less than expected for the second quarter, but indicates that US house prices are still down 15.9% year on year. On a more positive note, housing futures based on the Case-Schiller index bottomed at the end of June and have been rising since. Expectations are for lower levels still, but the these levels are now thought to be better than those predicted a few months ago. However, it is too early to say for sure that this heralds the start of the start of the much vaunted turnaround in US house prices. Interest-rate futures are currently implying that banks are again becoming hesitant to lend to each other on fears that credit losses will increase as the feared global recession kicks in. Increased lending rates will hardly be manna from heaven for home owners on either side of the Atlantic.

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The FTSE is currently indicating a lower opening as traders await the release of the UK retail sales numbers. While economists are expecting a contraction of 0.2%, traders are hedging in case the numbers come out worse then expected. Should this happen, the FTSE could open 1% lower.

Gold is in recovery mode as the strength of the US dollar wanes. Gold is now trading above the 820 dollar per ounce mark, and is poised to go higher. Oil had a very interesting day; after bearish inventory data, which saw crude oil fall below the 114 dollar mark, the black gold recovered and coupled with the weakness of the US equities market, finished the day above the 116 dollar per barrel mark. We expect oil to follow the US dollar, if the dollar weakens then look for oil to test 120 dollar level.

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The FTSE is currently indicating a higher open as traders are anticipating that the economic news from its main trading partner, European Union, comes out better then expected. Today around the same time the FTSE opens for trade, the European Union will be releasing its GDP results for the 2nd quarter. Analysts are excepting for a contraction of 0.2%, however we have heard rumours that there is a chance that the number will come out much higher. Should this happen we could see the FTSE close up more then 100 points

Gold is benefiting from bottom buying. Some traders are hoping that the recent US dollar strength is over done and that gold is poised for a jump back up to 900 dollars per ounce.

Oil benefited yesterday from the bullish inventory numbers, however the overall down trend should resume today and we could retest the 114 dollar level.

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