The focus of the G-8 meeting over the weekend was undoubtedly on the sovereign debt crisis in the Eurozone. It was stated in the communiqué that world finance leaders agree on the importance of a strong and cohesive euro zone for global stability and recovery, and we affirm our interest in Greece remaining in the Eurozone while respecting its commitments. Concerning the global economic outlook, the leaders acknowledged persistence of significant headwinds and they pledged to take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses, recognizing that the right measures are not the same for each of us. However, there were no further detailed plans on how to resolve the problems.
In China, Premier Wen Jiabao stated that the government should continue to implement a proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth. The comments indicated that the government sees more is needed to be done to stimulate growth. It's expected that the PBOC will implement further RRR cuts following last week's reduction which would inject RMB 400B to the banking system.
Commitments of Traders:
Speculators were mixed towards the energy complex in the week ended May 15. Net length for crude oil futures added +503 contracts to 184 463. Net length for heating oil slipped -3 084 contracts to 10 131 while that for gasoline dropped -2 581 to 71 811. Net short for natural gas futures added +4 349 contracts to 109 424.
Speculators were bearish towards precious metals. Net length for gold futures dipped -9 161 contracts to 114 142 while that for silver declined -1 089 contracts to 11 474 contracts. For PGMs, net length for platinum decreased -1 358 contracts to 14 370 while that for palladium dropped -2 134 to 2 919.