Crude oil rises above 80 (intra-day high: 80.23) in European morning. Investors are awaiting the EIA's inventory report. As the market anticipates modest build in crude oil inventory, a surprising draw could trigger strong buying which may push price above the said intra-day high. However, we doubt if the rally will be sustainable as the inventory draw was to a large extend driven by hurricane Ida, rather than recovery in demand.

Gold extends rally to 1149.5 in European morning as the dollar resumes weakness. USD plummets -0.07% to 1.497 against the Euro ahead of US housing start and CPI data. Investors stay bearish on USD despite ECB President Trichet's strong-dollar speech. Trichet said yesterday that a strong dollar is in the world's best interest. Moreover, he denied the euro will be replacing USD as the dominant reserve currency. 'The euro wasn't created to compete with the dollar or to be a substitute to the dollar as a reserve currency...The ECB isn't campaigning for the international use of the euro'.

US CPI probably rose +0.2% mom for the second consecutive month in October as driven by increase in energy prices. However, core CPI should have slowed to +0.1% mom in October from +0.2% a month ago. The soft reading in core CPI was due to weakness in the 'rent and owners' equivalent rent' component. Housing starts are expected to have increased to 599 K units in October from 590K units a month ago.

The Bank of England minutes for November's meeting revealed that while all members voted for maintaining the policy rate at 0.5%, there were splits regarding adjustment in the asset buying program. Out of the 9 MPC members, 7 favored extending the program by 25B pound. However, Chief Economist Spencer Dale preferred no change while David Miles favored a 40B-pound expansion. According to the minutes, Dale said that 'further substantial injections of liquidity might result in unwarranted increases in some asset prices that could prove costly to rectify, complicating the task of meeting the inflation target in future'. Miles suggested a bigger expansion because it could 'provide greater insurance against the downside risks to growth and inflation arising from constrained credit supply. That would maintain a similar rate of purchases as had been the case in the previous three months, once the intended break in the purchase program at the end of December was taken into account'.

Stocks in Europe advance as driven by rallies in commodity shares. In the UK, the FTSE 100 index climbs +0.4% to 5366. Germany's DAX and France's CAC 40 surge +0.7% and 0.6% to 5820 and 3583 respectively. Spurred by strength in oil price, BP and Shell adds +0.7% each. Mining shares, Xstrata and BHP Billiton, soar +3% and +2% respectively.

Earlier in Asian session, stocks plunged as investors concerned about capital-raising and share-issuance activities in banking and property sectors. While the MSCI Asia Pacific Index made little change in the day, Japan's Nikkei 225 Stock Average slid -0.6% to 9677 after developer Tokyo Tatemono announced a plan to sell 45.6B yen in shares, the stock slumped -17%.