The US equities market could sustain its gains of the last week pushed by the bullish closing of last week technically. The US ISM came better than the market expectations of 42 at 42.8 improving in a gradual pace as the market was waiting and the Fed reference recently. The Dow could close up by 221 at 8721 recording a new high of this year at 8760 during this optimistic session.

The greenback was under significant pressure surely on these strong gains of the equities markets and the current increased risk appetite. The gold was also underpinned by the rising of the commodities and energy prices amid the current cheeriness of a closer recovery later this year. The price aid index of the ISM manufacturing index of May has come up also to 43.5 from 35 in April to support the current market believe in the growing of inflation up side risks coinciding with this recovery supporting the gold as a mirror of the inflation.

The US equity market could cover its earlier loses by the end of last week weighing on the greenback across the broad even versus the Japanese yen which always comes under pressure amid the stocks market rising and the increasing of the market risk appetite on its very low interest rate. The worries about the demand for the US treasuries could contain the market sentiment increasing the market speculations of a Fed's hiking interest rate for attracting demand for these treasuries amid the current rising of the commodities and oil price. But the rising the demand of the US treasuries on last Thursday auctions could calm the market down brining the optimism of the release of consumers confidence of May on the spot again which came stronger than the market widely forecasts of 42 at 54.9. The number ensured that the worst has become behind of us and there is growing confidence in consuming in spite of the great deal of lost jobs because of the credit crisis which effect negatively on the consumers' confidence and By God's will, we will wait by the end of this week for the release of US labor report of May to watch a fewer number of lost jobs in US.

As we have mentioned in yesterday analyses the market has paid a serious attention to the consumer confidence figure today. The markets have shrugged off the decline of March case Shiller home price index by 18.7% y/y and by 2.2% m/m focusing on it which came stronger than the market widely forecasts of 42 at 54.9. The number ensure that the worst has become behind of us and there is growing confidence in consuming in spite of the great deal of lost jobs because of the credit crisis which effect negatively on the consumers confidence. The Dow has turned strongly from the red territory by the data to the green territory gaining more than 196 points today to close at 8473. The European equities indexes followed the US ones exactly. The FTSEE 100 could compensate its earlier loses after a long weekend to close today above 4400 at 4412.

The greenback was trading in a tight range as the UK and US markets were closed today and there was no key direction from the equities markets performance. However the greenback was not tied to the equities markets movements in the recent few days of last week as the market has focused in the US quantitive easing policy inflation impact. The greenback is still undermined by the US quantitive easing policy measures of injecting funds into the markets which can cause an inflation pressure on the first months of the recovery which is expected to start later this year and if there is no recovery soon these funds can cause a stagflation pressure. Last week Fed member Plosser has indicated his concerns about inflation which can reach 2.5%y/y in 2011. The demand of gold has increased after his comments pushing it above 940$ as a mirror of the inflation keeps the value of the investors' wealth.