Stock markets in Asia eased amid concerns global economic slowdown and China's September economic data showing further moderation. This was despite rumors that the ECB/EU/IMF troika would give concession to Greece on some of the required austerity measures. The MSCI Asia Pacific Index fell -0.1% in the morning session. In the commodity sector, crude oil prices weakened modestly, following Friday's retreat, while gold price plunged to a 1-month low of 1745 after a -1.18% drop last week.
Last week, the Chinese customs reported that the country's exports jumped +9.9% y/y in September, compared with a +2.7% growth in the prior month. Imports also gained +2.4%, following declines over the past 3 months. This sent China's trade surplus to US$27.7B, up from $26.7B from a month ago. Loan growth came in at RMB 623B in September, slightly slower than expected. Headline CPI rose +1.9% y/y in September, easing from +2.0% a month ago. The moderation was due to deceleration of food inflation +2.5% y/y, compared with a +3.4% gain in August. Non-food inflation, however, rose to +1.7% y/y from +1.4% in August. Australia is a major trading partner of China. Regarding the growth outlook in China, the RBA Governor Stevens stated that China's slowdown would affect Australia. He also stated that commodity prices declined more than expected and that the RBA might lower interest rates further "as long as inflation is okay, which at present it seems to be".
The IMF summit in Tokyo finished last week. As expected, policymakers failed to deliver any resolution to solve the sovereign debt crisis in the near-term. According to Reuters, the "10-page agenda, however, largely summarized previously planned steps, such as deploying a new European Central Bank bond-buying program and avoiding the U.S. "fiscal cliff" of spending cuts and tax hikes set to take hold early next year".
Commitments of Traders:
With the exception of heating oil, speculators were bearish towards the energy complex in the week ended October 9. Net length for heating oil added +2 140 contracts to 26 937. However, net length for crude oil futures fell -2 282 contracts to 213 598 while that for gasoline slipped -2 639 contracts to 73 189. Net short for natural gas added +594 contracts for 54 499.
With the exception of palladium, speculators were also bullish towards precious metals during the week. Net length for gold futures increased +3 623 contracts to 211 949 while that for silver gained +1 707 contracts to 39 825. For PGMs, net length for platinum gained +4 705 contracts to 46 825 while that for palladium climbed +410 contracts to 12 189.