Another quiet session due to the lack of important economic data on Monday. Bourses in European and Asia climbed higher earlier in the day as investors were thrilled by rumors that the ECB would adopt plans to limit yields of sovereign debts. Yet, gains were erased after the ECB issued a statement denying any such plans. Meanwhile, the Bundesbank reiterated in its monthly bulletin its opposition on ECB bond buying. Wall Street opened lower as affected by these statements but both the DJIA and the S&P 500 recovered later in the day and settled largely flat. In the commodity sector, crude oil prices initially firmed amid concerns over potential supply shortage in the North Sea. Yet, gains were reversed after the ECB denied plans of unlimited bond purchases, sending both WTI and Brent crude contracts to close flat.

While market sentiment was lifted by the German newspaper Der Speigel's speculation that the ECB would announce unlimited bond purchases to curb yields, the ECB quickly issued a statement denying such a plan. The central bank stated that such as plan has "not yet been discussed by the ECB's Governing Council" and it is "wrong to speculate on the shape of future ECB interventions". Echoing these comments, the Bundesbank said in the monthly bulletin that it "holds to the opinion that government bond purchases by the Eurosystem are to be seen critically and entail significant stability risks".

In the US, the Chicago Fed National Activity Index improved +0.2 points in July to a -0.13. A negative reading suggests that the sector remains below trend. Moreover, the New York Fed released a research paper, titled "Mismatch Unemployment", suggesting two-third of the rise in unemployment is reversible and can be addressed by policies, while the remaining was driven a mismatch between job openings and the supply of labor. We find this notion inline with the Fed's dovish monetary stance.

The market is expected to be quiet today as we have a light economic calendar. The RBA released minutes for the August meeting. Policymakers viewed the decision to keep interest rates unchanged as "appropriate". The central bank remained confident in the growth and inflation outlook although "the global economic environment remained fragile".