Investors remained cautious in Asian session on Monday ahead of bond auctions of Italy and Spain, as well as the EU summit later in the week. Over the weekend, leaders of Germany, Italy, France and Spain discussed a plan worth of 130B euro to simulate growth. Asian shares slipped amid worries about the situation in the Eurozone. In the commodity sector, the front-month contract for WTI crude oil hovered around 80 while the equivalent Brent crude contract moved narrowly around 91 after the rebound on Friday.. The benchmark Comex contract edged higher to 1570.
As the market is awaiting the EU summit on June 28-29, Germany's Chancellor Merkel agreed to jointly lobby the EU ministers for a growth plan of up to 130B euro. However, she continued to resist calls for joint Euro bonds. In Greece, the newly formed coalition government announced that it would be seeking extension of its schedule of austerity measures by at least two years. Moreover, it would also request additional terms including tax cuts, extra help for the poor and unemployed and a freeze on public sector layoffs at the upcoming EU summits.
The calendar is light today with the US new home sales more closely watched. The data probably climbed +2K to 345K in May. Later in the week, the US consumer confidence might have dropped to the lowest level in 7 months while consumer spending declined for the first time in 11 months. Canada's economy probably expanded the most this year in April. This week would be rather quiet other than the EU summit as only central banks in peripheral economies will hold meetings during the week.
Commitments of Traders
Speculators were mixed towards the energy complex in the week ended June 19. Net length for crude oil futures slid -6 950 contracts to 123 908 while that for heating oil added +2 134 contracts to 4 896 contracts. Net length for gasoline increased +1 722 contracts to 60 869. Net short for natural gas futures soared +11 297 contracts to 113 695.
Speculators were bullish towards precious metals during the week. Net length for gold futures gained +4 089 contracts to 136 404 while that for silver climbed +493 contracts to 10 102. For PGMs, net length for platinum increased +3 059 contracts to 19 252 while that for palladium rose +716 contracts to 5 773.