Although yesterday's economic data was concentrated in the Eurozone, the market continued to worry more about the situation in the US. While Wall Street climbed higher in early trading as Chicago Fed's National Activity Index rebounded +0.7 points to 0 in July, gains were soon erased with DJIA and S&P 500 Indices plunging -0.38% and -0.40% respectively.
In the commodity market crude oil extended the decline for a 4th straight day amid concerns over rise in inventory level. The front-month contract for WTI crude oil plummeted to a 7-week low of 72.75 before settling at 73.1, down -0.98% at close. Gold price closed flat yesterday as strength in USD in late session capped the yellow metal's upside. Moreover, profit-taking emerged as the rally from 1155.6 on July 28 has brought price to a 7- week high of 1239.5 last week.
Today in Asia, crude oil remains soft, hovering around 73, while gold weakens further to 1222 as the market awaits a series of economic data. Eurozone's industrial new orders probably rose +1.5% m/m in June, down from +3.2% in the prior month while Canada's retail sales should have risen +0.4% m/m in June after a -0.2% contraction a month ago. The focus should be on US' existing home sales which are expected to have slumped -18.8% m/m to 4.63M in July. This would bring sales below recent trough of 5.01M made in February. Modest boost in sales from the tax credits and deepening in the decline after the incentive expired reveal that the housing market remains in a dismal situation.
After the market close, the industry-sponsored API will report its estimates on oil inventory. Consensus showed that crude inventory probably gained +0.5 mmb in the week ended August 20. For fuels, distillate stockpile should have risen +1 mmb while gasoline stockpile dropped -0.3 mmb.