Following strength in the stock market, crude oil surged in European session with the front-month contract breaking above 80 for the first time since May 6. Although Chinese PMI came in weaker-than-expected in July, investors remain bullish as corporate earnings results have so far been strong.

PMIs released in several European economies beat expectations. In the Eurozone, the index improved to 56.7 (consensus: 56.5) in July from 56.5 a month ago, indicating the manufacturing sector grew faster than estimated. Switzerland's SVME-PMI soared to 66.9 in July from 65.7 in June. The market had anticipated a drop to 64.8. While manufacturing activities slowed in the UK, the decline was modest. The July reading slipped to 57.3 while the reading in the previous month was revised up to 57.6 (previous: 57.5).

US ISM manufacturing data is expected to have dropped to 54.3 in July from 56.2 a month ago. After a weak PMI reading from China, lower-than-expected ISM data should weaken the commodity market further.


Gold weakens in European session as rise in appetite drives capitals to equities. Currently trading at 1177.5, the benchmark contract for the yellow metal may record the first drop in 4 days. PGMs extends recent rally as Chinese auto sales grew rapidly in July. The benchmark contract for platinum rises for the 4th consecutive day to 1593, up +1% from last Friday's close while that for palladium continues staying above 500.

According to the China Automotive Technology & Research Center, retail deliveries of cars, sport-utility vehicles and multipurpose vehicles jumped +15.4% y/y to 822.3K in July, following a growth of +10.9% last month. The robust expansion was largely due to large discount and the government's subsidies for fuel-efficient models.