Dmitri Lysenko
The USA authorities are looking for other sources of income for the country’s budget. The US Department of Justice has recently taken legal action against Wegelin, Switzerland’s oldest bank. The DoJ wants the bank to pay $1.2B for helping wealthy Americans to evade taxes.
In the meantime, the Fed Reserve has split over another round of quantitative easing (QE3). Today investors will be looking forward to the US employment report. The employment is expected to increase by 140-150K jobs.
Angela Merkel seems to have found another ally in her battle against the eurozone debt crisis. This is China. Yesterday it made an official visit to the country and met with Wen Jiabao, Prime Minister of China. According to him, China is thinking about expanding its share in the EFSF, probably through the IMF. However, no specific commitments were made.
Some analysts expect the People’s Bank of China to lower the interest rates later this month. The bank is also expected to reduce the amount of mortgage loans for foreigners to cool the country’s overheated housing market.
The Greek debt talks are still under way. More and more analysts assume that no agreement will solve all the problems Greece has. Even if the parties reach a compromise, the country’s debt will still be considerable while its poor economic performance and growing budget deficit will only increase the uncertainty over its further eurozone membership.
India’s central bank is going to lower the interest rates as soon as the rate of inflation declines.
Japan’s weaker export potential leads to costlier credit default swaps on corporate and treasury bonds.
China’s gold production reached 37.59 tons in December and 360.95 tons in 2011. This is the all-time record. The premium for physical gold in Singapore is around $ 0.70-1 per ounce, which means that the demand is low.
According to the Department of Commodity Trading of , today gold may rally up to 1775 and 1800. However, it is Friday, which suggest possible profit-taking. Once an H1 bar closes below 1759, the probability of retracing down to 1750 will increase. Once the price stays above 1750, it may eventually start a short-term rally.
Dmitri Lysenko
