Although Easter is just around the corner, and many investors are preparing to leave the markets starting Friday when most of Europe, the US and Asia will be closed for holiday, instability within the currency markets was very clear this week, and by Thursday broad markets could turn even more volatile.
Trading volume this week and the beginning of next week will continue to be thin as many will keep celebrating the holiday, therefore sentiment may witness rapid shifts, while markets could face additional tests, as market participants will keep debating about the prospects of the American and the European economic futures.
Asian stock markets saw gains for the first time this week after some companies, including Intel, released some better than expected earnings while the US and Europe saw better than expected economic data yesterday which determined investors to feel more optimistic and confident, increasing their appetite for risk.
Therefore, the yen and the dollar index weakened today while commodities gained on recovery signs since some of the nervousness generated lately eased. The euro erased all the losses witnessed on Monday, while crude climbed again over the 109 dollars level on signs the US economy is strengthening which could increase demand.
Yet, the continued rise in energy prices keep fueling inflation woes combined with concerns about the debt situation in Europe and US, drove gold to new record highs above the 1503.00 dollars per ounce and the Australian dollar to record territories above the 1.0650.
Meanwhile, the pound fell today unlike the euro, after the release of BoE's meeting minutes that showed another split among the MPC members who mentioned that the recent data was “probably to the downside”. Yet, eyes will turn on tomorrow's retail sales, which will be an important indicator of UK's economic performance.
Today will be relatively quiet with data from Europe, with only the PPI being released from Germany. While the US will release the existing home sales for March expected to witness a considerable improvement, in addition to the crude oil inventories report expected to show a rise in supplies by 1.3 million barrels.
Originally posted here
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