Strength in Oil Drives Worries Over Inflation

Strength in oil prices driven by tensions in the Middle East and North Africa heightened concerns over inflation. Gold rallied for a 6th consecutive on safe-haven and inflation –hedge demands. Policymakers in South Korea and the Eurozone voiced their worries on the issue. ECB President Trichet and council member Guy Quaden’s speeches in Belgium later today may give some clues on the policy outlook. The market has priced in higher chances of an earlier rate hike, containing the weakness of the single currency. Apart from protests in the MENA region, another key event was the earthquake in Christchurch in New Zealand.

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Strength in Oil Drives Worries Over Inflation