WTI crude oil pares gains and falls near 77 in European morning. Although indicators showed that global manufacturing activities expanded in September, the market remained concerned about the sustainability of the recovery.

Gold price retreats to 1057 after soaring to as high as 1066.9 earlier the day. Others in the precious metal complex also lose ground after yesterday's advance. Silver slips to 16.3. Price movement has been volatile in recent days after experiencing a 3-day selloff from 18 last month. Platinum initially surged to 1359.8 but selling pressure then pushed price back to 1330 level. Profit-taking and rebound in USD are key reasons for the declines.

Earlier today, the RBA announced to raise its cash rate by +25 bps to 3.5%. In the accompanying statement, the central bank said that 'it is prudent to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker. The adjustments at the October and November meetings will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead'. This disappointed the hawks who anticipate more aggressive rate hikes.

Moreover, the RBA explicitly warned that strong AUD may 'constrain output in the tradable sector and dampen price pressures'. This is probably the reason for Australian dollar's retreat to 0.892 against the dollar.

Other major currencies also plunge against USD as investors take profit from higher-yield assets amid risk aversion. All of the Fed, ECB and BOE will have monetary policy meetings this week. While all of them will keep interest rates unchanged at current level, market attentions are the tones on economic outlooks and exit strategies. For BOE, there have speculations on whether the central bank will extend the asset buying program given the surprising GDP contraction in 3Q09. The pound slides to 1.63 against USD today as government's bailout on RBS triggers concerns about banking sector in the UK.

Stocks decline in Asia and Europe amid disappointing corporate earnings results and heightened uncertainty in economic outlook. The MSCI Asia Pacific Index excluding Japan dropped -1.3%. In Europe, UK's FTSE 100 Index slides -2% to 5002 while Germany's DAX and France's CAC 40 loses -1.9% and -2% respectively.