LONDON – Violent clashes in Egypt between pro- and anti-government demonstrators kept financial markets nervous on Thursday, while the euro slid after the European Central Bank's president said high inflation would prove to be only temporary.Traders are monitoring the situation in Cairo as the Egyptian army moves to end the violence after standing by this week as the two sides battled with rocks, sticks, bottles and firebombs.Though the market impact of Egypt's turmoil has diminished as the week progressed, it has fueled uncertainty.That's evident in the oil markets, where traders worry oil-producing countries could be affected. A barrel of Brent crude in London is now trading just shy of $103, while the benchmark New York equivalent is around $11 lower at $91.54. Both are trading at their highest levels since 2008.Sebastian Barbe, an analyst at Credit Agricole, said the threat of regional contagion "remains significant" and noted the sharp increase in the cost of insuring against a Saudi Arabian default."Mubarak's refusal to step down before the planned presidential election in September will likely fuel the protesters' anger and the next few days are unlikely to see a moderation of the conflict," Barbe said.Against that backdrop, stocks have faltered.In Europe, the FTSE 100 index of leading British shares was down 0.4 percent at 5,974 while Germany's DAX fell 0.2 percent to 7,171. The CAC-40 underperformed its peers, trading 1.2 percent lower at 4,017.Wall Street was also poised for a sluggish opening — Dow futures were down 13 points at 11,972 while the broader Standard & Poor's 500 futures fell 2.2 points to 1,297.80.While keeping one eye on developments in Egypt, investors also have to monitor a heavy load of economic news this week, culminating in Friday's monthly U.S. nonfarm payrolls data for January.However, the main point of interest Thursday is the monthly press conference from European Central Bank President Jean-Claude Trichet, currently take place in the wake of the bank's decision to keep its main interest rate unchanged at the record low of 1 percent.In early comments, Trichet reiterated the bank's view that price pressures would likely moderate despite upside risks to the short-term.Figures earlier this week showed that inflation in the 17 countries that use the euro climbed further in January to 2.4 percent amid high energy and commodity costs. That took inflation further above the central bank's target of keeping inflation "close to, but below" 2 percent."Trichet is due to retire from the ECB at the end of October and he will likely want to secure his legacy as an inflation-vigilant central banker keen to preserve central bank independence," said Neil MacKinnon, global macro strategist at VTB Capital.As he was speaking, the euro fell following a recent rally to near three-month highs. Europe's single currency has been buoyant since Trichet's last post-meeting press conference, when he toughened up his rhetoric against inflation.By mid afternoon London time, the euro was trading 1.1 percent lower at $1.3663.The euro has also been buoyed recently by hopes that EU policymakers have finally got a handle on a debt crisis that has already pushed Greece and Ireland into seeking bailouts.There are hopes that a meeting of EU leaders Friday will provide confirmation of that view. The expectations are Germany is preparing to table a grand bargain that will see it pump in more cash into the eurozone's more indebted economies in return for stricter budgetary controls."Although a detailed and comprehensive policy solution might have to wait until the coming months, the broad outline of a policy solution, including debt restructuring for some of the peripherals, is likely alongside German insistence on a framework of strict fiscal policy objectives for the EU economies," VTB Capital's MacKinnon said.Earlier, trading in Asia was muted due to the Lunar New Year holidays with markets closed in South Korea, Hong Kong, mainland China, Taiwan, Singapore, Malaysia and Indonesia.The Nikkei 225 stock average closed 0.3 percent lower at 10,431.36 while Australia's S&P/ASX 200 advanced 0.5 percent to 4,817.20. Australian insurers jumped amid relief that Cyclone Yasi — among the most powerful storms to ever hit the country — appeared to have caused less destruction along the northeast coast than anticipated. Both Insurance Australia Group Ltd. and Suncorp Group Ltd. rose 3 percent.Trombone - Greatest Works .Red Light.Self Titled.Change Your Life.Derby
Egyptian clashes keep market sentiment in check
LONDON – Violent clashes in Egypt between pro- and anti-government demonstrators kept financial markets nervous on Thursday, while the euro slid after the European Central Bank's president said high inflation would prove to be only temporary.Traders are monitoring the situation in Cairo as the Egyptian army moves to end the violence after standing by this week as the two sides battled with rocks, sticks, bottles and firebombs.Though the market impact of Egypt's turmoil has diminished as the week progressed, it has fueled uncertainty.That's evident in the oil markets, where traders worry oil-producing countries could be affected. A barrel of Brent crude in London is now trading just shy of $103, while the benchmark New York equivalent is around $11 lower at $91.54. Both are trading at their highest levels since 2008.Sebastian Barbe, an analyst at Credit Agricole, said the threat of regional contagion "remains significant" and noted the sharp increase in the cost of insuring against a Saudi Arabian default."Mubarak's refusal to step down before the planned presidential election in September will likely fuel the protesters' anger and the next few days are unlikely to see a moderation of the conflict," Barbe said.Against that backdrop, stocks have faltered.In Europe, the FTSE 100 index of leading British shares was down 0.4 percent at 5,974 while Germany's DAX fell 0.2 percent to 7,171. The CAC-40 underperformed its peers, trading 1.2 percent lower at 4,017.Wall Street was also poised for a sluggish opening — Dow futures were down 13 points at 11,972 while the broader Standard & Poor's 500 futures fell 2.2 points to 1,297.80.While keeping one eye on developments in Egypt, investors also have to monitor a heavy load of economic news this week, culminating in Friday's monthly U.S. nonfarm payrolls data for January.However, the main point of interest Thursday is the monthly press conference from European Central Bank President Jean-Claude Trichet, currently take place in the wake of the bank's decision to keep its main interest rate unchanged at the record low of 1 percent.In early comments, Trichet reiterated the bank's view that price pressures would likely moderate despite upside risks to the short-term.Figures earlier this week showed that inflation in the 17 countries that use the euro climbed further in January to 2.4 percent amid high energy and commodity costs. That took inflation further above the central bank's target of keeping inflation "close to, but below" 2 percent."Trichet is due to retire from the ECB at the end of October and he will likely want to secure his legacy as an inflation-vigilant central banker keen to preserve central bank independence," said Neil MacKinnon, global macro strategist at VTB Capital.As he was speaking, the euro fell following a recent rally to near three-month highs. Europe's single currency has been buoyant since Trichet's last post-meeting press conference, when he toughened up his rhetoric against inflation.By mid afternoon London time, the euro was trading 1.1 percent lower at $1.3663.The euro has also been buoyed recently by hopes that EU policymakers have finally got a handle on a debt crisis that has already pushed Greece and Ireland into seeking bailouts.There are hopes that a meeting of EU leaders Friday will provide confirmation of that view. The expectations are Germany is preparing to table a grand bargain that will see it pump in more cash into the eurozone's more indebted economies in return for stricter budgetary controls."Although a detailed and comprehensive policy solution might have to wait until the coming months, the broad outline of a policy solution, including debt restructuring for some of the peripherals, is likely alongside German insistence on a framework of strict fiscal policy objectives for the EU economies," VTB Capital's MacKinnon said.Earlier, trading in Asia was muted due to the Lunar New Year holidays with markets closed in South Korea, Hong Kong, mainland China, Taiwan, Singapore, Malaysia and Indonesia.The Nikkei 225 stock average closed 0.3 percent lower at 10,431.36 while Australia's S&P/ASX 200 advanced 0.5 percent to 4,817.20. Australian insurers jumped amid relief that Cyclone Yasi — among the most powerful storms to ever hit the country — appeared to have caused less destruction along the northeast coast than anticipated. Both Insurance Australia Group Ltd. and Suncorp Group Ltd. rose 3 percent.Trombone - Greatest Works .Red Light.Self Titled.Change Your Life.Derby