Released on: December 12, 2007, 4:32 am

Press Release Author: Regent Markets (IOM) Limited

Industry: Financial

Press Release Summary: Housing news and interest rate decisions dominated headlines
and market sentiment yet again last week. Its easy to forget that there were times
when this wasn\'t the case.


Press Release Body: Fear had free rein in the final quarter of 2007, as concerns
over an all out collapse in the housing market, banking sector, and consumer
spending drove the market lower. As the final month of the year approached,
sentiment has changed quickly in lock step, with forward expectations for US
interest rates.

Fed Futures markets are indicating that a quarter point cut is highly likely at this
weeks FOMC meeting, but it is the chance of a half point cut that has got the market
excited.

Last week, the UKs MPC cut rates by a quarter of a percent, halting an 18-month
firming cycle. Many economists didn\'t predict the move, though there was a
remarkably rapid change in sentiment in the days leading up to the announcement.
Sterling traders certainly knew something was afoot, with the US Dollar/GBP exchange
rate dropping 1.5% at one stage, the day before the cut was announced.

The FTSE rose rapidly going into the decision, but fell back sharply on the actual
news. It seemed a classic case of buying the rumour, and selling the news. The cut
will be welcome news for borrowers, as the housing market in the UK continues to
show signs that it will go the same way as the US.

Sentiment is also becoming more positive for the banking sector, as banks produce
better than expected results, and smaller than expected credit related write downs.
Britains Royal Bank of Scotland announced that the amount it would be writing down
is roughly half the amount analysts had estimated. In addition they said that 2007
profits should still be well ahead of expectations.

Seasonality may be playing its part with December being a good month traditionally.
According to The Stock Traders Almanac, since 1950 when the Dow was down in
November, it gains an average of 4.9% over the next two months. In fact, only twice
has the December-January period been down following a negative November; in 1967 and
1969. December and January are seasonably very positive months in their own right,
with the S&P 500 up 75% and 65% of the time respectively.

For data release, this week is as heavy as they come, with the aforementioned US
interest rate statement on Tuesday. A quarter point cut is most likely, but with a
20% chance of a half point cut, the reaction could be volatile to say the least.

In addition to announcing the next level of interest rates, the Fed will also be
releasing their decision on the discount rate. This is the interest rate that banks
can borrow from the FOMC. Many analysts are expecting this to be cut by twice as
much as the headline interest rate, which would be good news for US banks.

This week there is also US pending home sales on Monday, trade balance on Wednesday,
Core retail sales on Thursday, and Core CPI on Friday. With a top tier US economic
announcement every day this week, its unlikely to be quiet on the US markets.

Traders at BetOnMarkets.com predicts that an up or down trade is a volatility trade
that returns profits if either of two points are breached. An up or down trade on
the S&P 500 over 10 days with the two triggers set as 1460 and 1545 returns 9%.

- THE END -

Contact Details:

Name: Mike Wright
Tel: 448003762737
Email: editor@my.regentmarkets.com
Url: Betonmarkets.com & Betonmarkets.co.uk

Address:
Regent Markets (IOM) Limited
3rd Floor, 1-5 Church Street
Douglas, Isle of Man
IM1 2AG

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Web Site: http://www.BetOnMarkets.com

Contact Details: Name: Mike Wright
Tel: 448003762737
Email: editor@my.regentmarkets.com
Url: Betonmarkets.com & Betonmarkets.co.uk

Address:
Regent Markets (IOM) Limited
3rd Floor, 1-5 Church Street
Douglas, Isle of Man
IM1 2AG