Strong US Consumer Confidence, Europe Inflation Talks, Libya Protests, and New Zealand Earthquake

Today was an active day in the markets; which means the Global Fund ended up positive. After dropping on risk aversion, the Euro rallied after ECB member Yves Mersch said that the central bank may warn of upside inflation risks at its next meeting on March 3rd. Meanwhile, protests in Libya contributed to oil's 7.63% gain, while gold slipped 0.56%. The US dollar gained some foot afterwards as investors looked to protect their holdings. Consumer confidence in the US rose to its highest in 3 years, beating expectations to a reading near 70. All the wile, fear rose about New Zealand's potential credit rating cut because of the government's continual spending on disaster relief - most recently the Christchurch earthquake.

The Euro will have two scenarios this spring. The first being more realistic - the ECB crafting a bailout fund, and inflation being a main point of concern, especially as good manufacturing numbers continue to show in Germany and countries along the periphery.  Second scenario - ECB and IMF realize that Spain and Portugal will not be able to fulfill its debt obligations as yields continue at unsustainable levels (7%), and attempt to usher in a bailout to end the PIIGS, sending jitters across the markets. However, the swift move might work to the Euro's advantage. ECB officials should pay close attention to the housing and labor markets - both sluggish - before they attempt to tame inflation.

BOE minutes will come out tomorrow, and analysts expect more support for a rate hike given UK area inflation. So far, two members voted in favor back in the January meeting.

The US is continuing to show improvements, but unemployment and housing remain a serious problem. Inflation is a great concern as it cuts into business margins.