The European equities markets have come also under increased pressure recently because of the turmoil in Libya which is one of the most important and nearest oil and gas suppliers to Europe giving Italy 35% of its needs of gas and its supplies are really exposed to be cut currently but the Euro is still finding buying from the enlarged markets expectations of having a closer interest rate hike by the ECB for tackling the prices upside risks pressure which can accumulate in EU in a fast way following UK and the market has had clear stress on that from the ECB Member Mr. Mersch's warning about the inflation upside risks and it is now facing its previous formed top at 1.386 after getting over 1.374 versus the greenback.
The gold is still getting strength from being well-supported above its recent resistance at 1394$ and the psychological level at 1400$ facing now its recent top of it at 1423$ and breaking it can lead to its recorded high at 1430$ as its properties as a safe haven with the tension in Lydia has no clear end and as hedge against inflation with the current rising of prices which are looking hard to be contained in the required pace in Europe, UK and also US which has started to have pricing power too while the Fed is still caring for helping the struggling labor and housing markets hoping for containing the inflation upside risks over the long term with no clear statement about a possible action against the prices rising over the short term until now despite the current unrests in the Middle East countries over the short term which end in a country to start in another one threating the oil supplies from this strategic important area rich of oil pushing Edit Htmlits prices up in a way can tackle the Fed's easing efforts for stimulating demand can move the growth in US which has been revised down in its preliminary quarterly reading of the last quarter of 2011 to 2.8% from 3.2% in the advanced reading while it was expected to rise to 3.3%.
God willing, we are waiting today for Jan personal income to be up by .4% as December and Jan personal spending to be up by .4% too from .7% in December and also Jan personal consumption expenditure deflator to be up by 1.4% from 1.3% in December and Jan pending home sales to be down by 2.5% after rising by 2% in December and it is important too to wait for Feb Chicago PMI release which is expected to be 67.5 from 68.8 in January.
FX Market Strategist
Walid Salah El Din