Here in the UK the market has hung on to the gains that had built since September. The market has been reluctant to push very far in 2011 but equally it has been reluctant to fall back to date.
The theme for 2011 so far has been for Emerging markets to struggle with 10% falls in South Africa Peru Chile and India whilst several European markets have gone the other way. Inflation as a consequence of quantative easing is the real concern and China has been raising rates to combat this.
In the UK the risk of stagflation is making it difficult for the Bank of England to react with interest rate rises but they will come soon. Whilst retail struggles, manufacturing is improving but the worry is that the weak pound has failed to support exports. Sterling is starting to appreciate in anticipation of dearer money.
