Please find below the Financial Fixed Odds report from David Evans, market analyst at BetOnMarkets.

Markets are rallying after US treasury secretary Geithner announced that the toxic asset plan planned months ago will actually get underway in early July.

Confidence continues to rise despite US housing delinquencies hitting nearly 8% and Japanese GDP shrinking by a record 12.5%.

The economic news flow is still bleak, yet markets appear to see be seeing the light at the end of the tunnel.

The FTSE is currently lagging behind its European counterparts, mainly due to financials underperforming today. Lloyds TSB is down 25% mainly as an adjustment in relation to the end of an offer to buy discounted shares. This was a technical adjustment that appears to have been largely accounted for.

However, of more worry is the news that Lloyds is under scrutiny from the EU in relation to the government assistance it has received at the depths of the crisis. Lloyds may be forced to sell core assets in order to raise cash to buy the shares back from the government.

This has put other banks on the back foot in sympathy. It is telling that Barclays as one of the few remaining ‘independent’ banks the outperformer in the sector today.

In the FX markets, the dollar continues to weaken against the euro and sterling. In recent months, the Euro/US Dollar exchange rate has developed a close correlation with crude oil prices, so it is no coincidence that oil is performing well today, touching $62 briefly for the first time since November 2008.

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