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28/07/2009 16:49 PM GMTCFD360 Markets Round-

Up-

Equities take a breather-

28/07/2009

Tuesday 28th July 2009

Headlines

Deutsche Bank hit by bad loans provision

US equities lead wider falls

CFTC looks at limiting speculators

Chart To Watch-

BP-

weekly chartBP gave up earlier gains as traders dissected today's earnings and guidance. The fall of 53% in secondquarter profits compared to the same period last year was better than expected. But there wasdisappointment in the company's gloomy outlook. T he dividend was held steady at 14 cents, yet therewould be a further $1 billion of cost cuts, following the $2 billion last year. The stock has failed to close above resistance at the 50% retracement.

GFT Inflation Indices

Again GFT's inflation indices were unchanged today which reflects the balancing forces acting oninflation expectations. On one side we see crude oil and commodity prices slipping back, suggestinglower inputs. On the other side, bond yields are creeping higher across the UK, Germany and US. Thiscould be over supply concerns, but also because inflation worries are starting to emerge. However, anyrise in rates will go some way to dampening spending in the current environment, as saving rates push

Market Ticker Price Change Percent

CPI - UK CPIUKU9 0.61 unch unch

HCIP Euro Inflation HICPEUU9 0.08 unch unch

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higher.

Most Actively Traded Instruments

Uk and Europe

UK Market News

CBI - UK shop sales fall

BP (BP.L) beats forecasts

Lloyds (LLOY.L) appoints new chairman

We saw another positive open for European stocks, but by mid- morning the indices were all hov eringaround their closing levels yesterday.The FTSE was heading for a record 1 2th day of gains, but was finally knocked lower after a weakerConsumer Confidence number from the US. A CBI survey showed that 47% of retailers reported lower sales for the year to July. Also of concern wasthat retailers expect conditions to remain difficult through August. BP (BP.L) profit halves but beats forecasts, tracking the fall in the price of crude from $147 this time lastyear to $70 now. Cost cutting is a major feature, with cuts of $2 billion this year and a further $1 billioncoming out next. Tony Hayward, BP's chief executive, said that energy demand had now stabilised, whilehe saw "little evidence of any growth in demand and expect the recov ery to be long and drawn out." BPgave up earlier gains to end the day down 2.9%. Lloyds Bank (LLOY.L) appointed Sir Win Bischoff as its new chairman. Many observers weredisappointed, feeling that the appointment of the former Citigroup chairman showed a lack ofinspiration, with the troubled taxpayer-backed group preferring a cosy shoe- in for the role rather than amore radical appointment, such as Northern Rock's Ron Sandler. The UK taxpayer owns 43% of thegroup, and shareholders are anxious to see a radical restructuring of the group.The stock ended down3%. National Express (NEX.L) was down 5% in early trading after it was revealed that Transport SecretaryLord Adonis may strip the rail and coach company of its profitable contracts as punishment forabandoning the east coast franchise.However, the stock regained some ground to end down 3.9%. Deutsche Bank (DTBKY) fell 11 % despite posting better- than- expected second quarter earnings. TheGerman bank was hit by a dramatic leap in provisions for credit losses. These rose to 1 billion euros forthe second quarter, up from 135 million euros for the previous year. Big Winners

Index Commodity Equity

US Wall Street (.US30) Spot Silver (.SILVER) Next (NXT.L)

Hong Kong 40 (.HK40) WT I Crude Oi l (.WT I) BP (BP.L)

USTEC 100 (.USTEC) High Grade Copper (HGU9) GlaxoSmithKline (GSK.L)

Market Ticker Price Change Percent

UK 100 .UK100 4526 - 48.0 - 1.05

Germany 30 .DE30 5180 - 70.0 - 1.33

France 40 .F40 3330 - 42.0 - 1.25

Stock Ticker Price Change Percent

GlaxoSmithKline GSK.L 1171 + 8.50 + 0.73

Shire SHP.L 893.0 + 9.50 + 1.08

Sage SGE.L 192.2 + 6.80 + 3.67

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It has been difficult to find many gainers after the broad-based sell- off this afternoon. However,financial software firm Sage, was up as it announced results in line with expectations. Defensive drugstocks also benefited from losses in the cyclicals, led by GlaxoSmithKline. Shire was also stronger as itsaid it was still confident of launching its hyperactivity drug, despite US regulatory delays.Big Losers

Randgold fell after it announced a share offering to fund gold mining projects in Senegal and Mali.Mining conglomerate Xstrata posted an 11% rise in coal production and a 1% rise in copper output forthe first half. The results were seen as secondary to its aim of merging with Anglo American (AAL.L),who report on Friday. Sub- prime lender Provident Financial announced a 3.5% rise in half-year profits,but fell as some brokers tempered their outlooks for the company.

US Indices

US house prices up month- on- month

Consumer Confidence falls again

Earnings mixed

Equities were heading lower by mid-

session in what many saw as a healthy pull-

back after a run of gainslasting more than two weeks.The S&P/Case- Shiller HPI showed that house prices rose month- on- month for the first time since July2006, with the index rising 0.5% from April. Year- on-year prices were down 17 .1%, which was betterthan expected, and an improvement from last month's drop of 18.1%. Analysts took this as evidence thatthe housing market is starting to stabilise, although warned that it was still a long way from recovery.Nevertheless, it is a mild positive combined with yesterday's better - than- expected Existing Home Salesdata.In contrast, Consumer Confidence dropped for the second month in a row, falling to 4 6.6 from 4 9.3 inJune, while the expected number was 49. The fall - off is despite strong gains in the stock market, and

emphasises the concerns felt by many Americans as unemployment continues to rise. Data like this alsoforce us to look beneath the headline numbers, as yesterday's main housing data hid the fact that whilethe number of home sales increased, the prices achieved were 12% below those of a y ear ago.As the earnings season hits its busiest week. We had results from Viacom and Coach before the open.Media conglomerate Viacom (VIA) announced a 30% fall in net profit in the 2nd quarter as revenues fell14% from this time last year. By mid session the stock was unchanged. Meanwhile luxury goods makerCoach (COH) announced earnings in line with analysts' expectations, but the sock was down 5% midsession.Technical Outlook - S&P Update

Today's pullback looks like testing 969 as near- term support. If the market manages to hold on to recentgains, this level could become more significant.

The bears will want to see this level breached and a lower close. So far, today's sell- off is very mild giventhe size of July's rally.

Stock Ticker Price Change Percent

Randgold Resources RRS.L 3692 - 342 - 8.48

Xstrata XTA.L 736.0 - 50.2 - 6.38

Provident Financial PFG.L 798 .5 - 56.5 - 6.61

Index Ticker Price Change Percent

DJIA .US30 9034 - 80 - 0.88

S&P .US500 972.0 - 10.0 - 1.02

NASDAQ .USTEC 1588 - 11.0 - 0.69

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Commodities:Precious Metals:

Precious metals finally succumbed to selling pressure as buyers went on strike as they watched the dollarpush higher. Gold, silver, oil and equities all headed lower as the dollar pushed higher, breaking a stringof losses as it started to hit technical levels against a range of currencies.If this dollar move is temporary, then we can expect risky assets to resume their upward trajectory.Otherwise, a more prolonged dollar rally could see recent gains in metals, crude oil and equities wipedout.

Market Ticker Price Change Percent

Gold .GOLD 941.5 - 12.0 - 1.26

Silver .SILVER 1370 - 28.0 - 2.00

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Crude Oil:

Crude oil remains in the uptrend, but as with precious metals and equities, it is taking a breather today asthe dollar rallies.The disappointing Consumer Confidence number meant that any attempts to rally were snuffed out There is some uncertainty about the outcome of an investigation into finite commodities markets by the

regulatory body, the CFTC. T here are worries that position limits may be imposed on marketparticipants which would lead some speculators to unwind positions. The overall effect this would haveon prices is far from clear.

Looking forward - Wednesday 29th July 09:30 GBP Net Lending to Individuals

13:30 USD Core Durable Goods

13:30 USD FOMC member Dudley speaks

15:30 USD Crude Oil Inventories

Market Ticker Price Change Percent

Brent .BRENT 6960 - 118 - 1.67

WTI .WTI 66.90 - 1.42 - 2.01