Crude oil recovers in European session, partly because the 2-day selloff triggers buying interests, partly because the EU outlined methods to help Greece. Although the benchmark contract regains 80, it may not be able to hold sustainably above the level as investors await FOMC statement (to be released in NY session today) and OPEC's announcement (to be released tomorrow).

Leaders from the European Union, after a meeting in Brussels on Monday, clarified the framework they would use to help Greece overcome its deficit problem when needed. According to Jean-Claude Juncker, Luxembourg Prime Minister who chaired the meeting, said they 'clarified the technical arrangements that would enable us to take coordinated action which could be swiftly put into place in the event it is necessary '. No figures were mentioned in the statement as the objective of the arrangements would 'not be to provide financing at average Eurozone interest rates, but to safeguard financial stability in the euro area as a whole'.

Investors' concerns were eased temporarily, although uncertainty in the Greek issue remains high, as shown in tighter spread between Germany and Greece bonds. 'Risky' assets also gain grounds while USD and JPY weaken.

Data from the macro front, however, signal bullish sentiment would be short-lived. Core CPI in the Eurozone eased +0.8% y/y, the lowest on record, in February as dismal employment situation restrained spending. Moreover, ZEW showed that economic sentiment in the 16-nation region fell to 37.9 in March, worse than market expectations of 40.1, from 40.2 a month ago. These readings should dampen hopes for an early ECB rate hike.

With the help on stronger euro, gold price rises further and is currently trading at 1115. Others in the precious metal complex also soar with silver and palladium gaining +1.05% and platinum adding +0.5%. Despite the apparent underperformance, platinum acquires better fundamentals as global auto market turns around. A report by the European Automobile Manufacturers' Association showed that passenger car registration in the EU rose +3% y/y to 974 346 units in February. Over the first 2 months of the year, the increase was +7.9% over the same period in 2009. Platinum and palladium are mainly used as autocatalytic converters. A rebound in car market is positive for the metals.

While the market's focus is on the FOMC statement, it's widely expected the Fed will keep the policy rate unchanged at 0-0.25%. Moreover, it will retain the stance to keep interest rates low for an 'extended period' of time. The market will into the Fed's economic outlook and plans to exit stimulus policies. In the previous meeting, Thomas Hoening, President of the Federal Reserve Bank of Kansas City, dissented to keep the reference that economic and financial conditions were likely to 'warrant exceptionally low levels of the federal funds rate for an extended period' as market conditions have improved. If there are more dissenters this time, speculations for an early rate hike should heighten.

Another central bank, the Bank of Japan, will probably extend its liquidity program in March. The BOJ will release a meeting statement tomorrow, outlining details to extending duration and expanding the size of the new operations.