The Yen strengthened versus most of its major counterparts

Currencies:

The Yen strengthened versus most of its major counterparts on speculation that unrest in the Middle East may spread, boosting demand for safer assets.



Japan’s currency rose from a three-months low against the euro as Asian stocks fell after Libyan leader Muammar Qaddafi’s son warned of a civil war following attacks on anti-government protesters by security forces. The dollar reached to the lowest level in a week against the euro before a U.S report tomorrow predicted to show initial prices came down by the most in a year.



"A further escalation in the current political tensions in the Middle East would likely increase demand for ‘safe-haven’ currencies," said by Mike Jones, Currency strategist at Bank of New Zealand Ltd. In Wellington. He added: "Near term, this may provide an extra-ordinary support to the yen and dollar."



Bonds

Mumbai: Indian federal Bond yields were lightly changed in thin trade early on Monday as traders refrained from taking large positions indicating whether the government will announce another auction this week.



At 10:03 a.m. the most –traded 8.08 percent 2022 bond was trading at 8.016 percent, unchanged from Friday, while the second most-traded 8.13 percent 2022 bond yield was also steady at 8.15 percent.



The illiquid benchmark 10-year bond yield which rose 2 bps to 8.10 percent on Friday, had not been traded so far.



U.S Treasury prices eased on Friday as traders set up for a new round of government debt supply, although losses were limited as investors worried about tensions in the middle East and rising inflation.



On Monday, the benchmark U.S 10-year. Bond yield was quoted at 3.58 percent, compared with 3.59 percent late on Friday.



Commodities



Oil

Oil prices climbed above $87 a barrel on Monday in Asia amid investor concern that the violent protests spreading in Libya could disrupt crude supplies from OPEC nations.



Benchmark crude for March delivery was up $1.17 at $87.37 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents to settle at $86.20 on Friday.



On Sunday, Seif-al-Islam Gadhafi, son of Libyan leader Moammar Gadhafi, warned protesters that they risked igniting a civil war in which Libya’s oil wealth "will be burned." Libya exports about 1.0 million barrels of crude a day.



Gold

Tokyo: Gold rose to a seven-week high on Monday as spreading unrest in the Middle East underscored its appeal as a safe-haven asset, while silver and palladium prices hit historic highs on expectations for growing industrial demand.



Gold added to a weekly gain of nearly 3 percent last week and was poised for further upside on fresh news from North Africa and the Middle East, where revolutions which deposed the presidents of Tunisia and Egypt have inspired protests across the region, threatening the grip of long-entrenched autocratic leaders.



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