Commodities remained firm before US market opens. Earlier in the day, European PMI sent some mixed messages to the market. The Eurozone manufacturing PMI climbed +1.3 points to 45.3 in August, compared with market expectations of 44.2. The services PMI, however, fell to 47.5 from 47.9 in July. In Germany, the manufacturing PMI recovered to 42.1 in August from 43. However, the services PMI slipped to the contractionary territory to 48.3 in August.

After breaking above resistance levels at around 1500 on Tuesday, platinum extend rally to a 3-month high of 1563.6. The noble metal's recent gain has been driven by worries that labor strike in Lonmin's mines in South Africa would spread quickly. In fact, apart from the labor action in Lonmin, thousands of night shift workers at Amplats' Thembelanie mine in Rustenburg staged a sit-in last week. Mine closures due to strikes might inevitably result in loss of production and this would help adjust the demand/supply balance which has been staying at surplus for years.

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In the US, crude oil prices and the stock markets used to move with high, positive correlation. However, the chart below indicated that the relationship has changed months ago. The S&P 500 Index broke above the 2012 top made in April last week while the WTI contract, while strengthening, remained around -12% below this year's peak made in the first half of the year. The divergence is even more significant if we compare the S&P 500 Index with copper prices. The chart showed that copper prices have continued to struggle at multi-month low levels while the S&P has been trending higher. While both stocks and commodities are risky assets, investors appeared to favor the former more. This indicated that investors were more confident on the US market rather than the global market as a whole. Hopes of further QE from the Fed have helped sustain strength of the stock markets.

US Initial jobless claims unexpectedly rose to 372K in the week ended August 18 from 366K in the prior week. The increase exceeded market expectations of 365K, sending the data to a one-month high. The four-week moving average, as a result, climbed to 368K. New home sales probably gained +3.43% to 362K in July.