The Non-farm payroll data along with the unemployment rate on Friday from the US showed signs of good recovery in the US markets as 192,000 jobs were added for February, while January figures were revised upwards to 63,000 and December revised to 152,000. Private payrolls showed even more strength jumping to 222,000 from 68,000 and most importantly, the unemployment rate declined to 8.9% from 9% the previous month, showing genuine signs of US recovery as unemployment rate has been decreasing and employment increasing. ECB President had signaled that interest rates could be hiked in the next meeting as inflation has been soaring and could be reiterated today when Trichet speaks. Looking at other central banks, the SNB and BOJ could be the slowest to tighten policy, RBNZ are in a strong possibility to cut rates following the massive earthquake which could add pressure on the economy as far as rebuilding costs are concerned while BOE could hold rates, against expectation of hike, as policy makers hold off tacking inflation on concerns about the strength of the economy.
Escalation in violence in Libya has led to fears that the oil supply disruptions could spread to other Middle Eastern nations thus resulting in oil prices shooting to a 29-month high at $106.40 and Gold also moved closer to the current record of $1440 on uncertainties and inflation risk as a result. Currencies moved up against the US Dollar with the EURUSD trading near a four-month high at 1.3980 after reaching 1.4008 on Friday as investor confidence in EU probably jumped to the highest since 2007 to 17.2, USDJPY declined to 82.14 as Japanese exporters bought Yen to bring overseas earnings before the financial year ends, South Korean Won declined to 1119.30 as oil prices jumped and on concern China's measures to control inflation will hurt growth, GBPUSD declined to low of 1.6241 as BOE looks to hold rates as concern on strength of recovery has overtaken tackling of inflation, NZDUSD declined to 0.7366 as RBNZ looks more certain to cut rates ahead of rebuilding costs, AUDUSD traded at low of 1.0118 and USDCHF declined to 0.9248.
Today we have a thin economic calendar as EU releases investor confidence, ECB President Trichet speaks and US Fed's Lockhart and Fisher speak on the US Economic Outlook.