While the G-20 meeting was under the spotlight, it delivered no surprises. Financial markets changed little in Asian session as countries outside the Eurozone said they need the 17-nation region to show more commitment in resolving the sovereign debt problem before committing on any funding to the IMF. Oil prices dipped after rising to multi-month high as the IMF warned of global economic slowdown. The front -month contract for WTI crude oil eased to 109.5 while the equivalent Brent crude contract slipped to 124.97 after rising to as high as 125.55 last week.
The main topic of the G-20 summit was on resolving the sovereign debt crisis in the Eurozone. Whilst the countries pledged that would review options to ensure that the IMF has sufficient funding to supply in a timely matter, countries outside the Eurozone requested that the 17-nation region to take further steps to strengthen its own firewall before reviewing these options further at the next G-20 meeting in April. The UK Finance Minister, George Osborne, stated that, 'We have to see the color of the euro zone's money first - and, quite frankly, that hasn't happened. Until it does, there's no question of extra IMF money from Britain or probably anyone else'. Yet, Germany's Chancellor Angela Merkel argued that there is already enough money pledged and the Germany policymakers would decide in March on whether it would contribute more to the EFSF.
Oil prices slipped amid disappointment that there was lack of commitment on the funding of the IMF financial plan to assist European countries. Moreover, investors worried about the impacts of high oil prices on economic recovery as the Managing Director Christine Lagarde said that the world economy is 'not out of the danger zone' and the financial systems, high debt and higher world oil prices are factors that would derail the recovery path.
The calendar today is light. In New Zealand, the trade report surprisingly recorded a deficit of NZD 199M in January, following a downwardly revised 306M surplus in the prior month. In the US, pending home sales probably gained +1.00% m/m in January, up from a -3.5% contraction a month ago.
Speculators were bullish towards the energy complex in the week ended February 21. Net length for crude oil futures jumped +23 428 contracts to 228 180. Net length for heating oil rose +4 022 contracts to 27 566 while that for gasoline rose +2 602 contracts to 90 298. Net short for natural gas futures dipped +1 228 contracts to 124 929.
Speculators were bullish on precious metals. Net length for gold futures added +13 541 contracts to 180 961 while that for silver soared +4 496 contracts to 23 587. For PGMs, net length for platinum gained +273 contracts to 28 348 while that for palladium gained +166 contracts to 10 763.