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Markets were all about Egypt on Monday with the unrest and resulting uncertainty helping to get the week off to a poor start with oil bulls among the few early – and brief – winners.
While traders waited to see what will happen next in the Middle East linchpin, a shift to old favourite “safe havens” became the market’s default setting.
European stocks moved lower from the open, taking their cue from Asia - but without very strong conviction. London’s FTSE 100 was off 0.4% while the pan-European FTSE Eurofirst 300 down 0.5%.
Moody’s also warned on Monday that European construction companies could be among the most affected should the unrest continue or spread. It singled out Lafarge and Italcementi as those with the biggest exposure to the region.
Economists’ attention soon switched to the eurozone’s “flash” consumer price index estimate for January. Prices rose 2.4% year-on-year - roughly as expected - compared with 2.2% in December but the release doesn’t give any details as to the underlying drivers of this.
The numbers could however make uncomfortable reading for the European Central Bank, which meets to discuss interest rates on Thursday. Jean-Claude Trichet, president, has sounded a relatively hawkish note on inflation but recent remarks from his fellow governing council members have been split between the doves and hawks. This will only add to interest in what Mr Trichet has to say on Thursday.
Later attention will switch to the US, where personal income numbers are due, including the PCE inflation measure.
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