Commodity prices remain strong in European morning. While crude oil holds above 80 (currently trading at 80.7), gasoline and distillate are rising +0.5% and +0.9% to 2.219 and 2.088, respectively.
The chart below shows that gasoline crack has been rising recently. We believe this has been driven by consistent decline in gasoline stockpile since late-February. Gasoline inventory in the US has dropped -3.2% to 224.6 mmb from the peak in February. While staying in the upper boundary of the 5-year year, days of supply have also reduced to 25.1 days from 26.9 days. Undeniably, these are signs of recovery in oil fundamentals.
Both US dollar and Japanese weaken as market sentiment improves. The euro rallies for the second day as the package to help Greece has got clearer. The single currency, currently trading at 1.345, has risen +1.5% from the 10-month low made last Thursday.
Gold strengthens for the third day. Apart from decline in USD and rise in EUR, the World Gold Council's forecast that China's gold consumption may double also boosts the yellow metal. According to a report released by the Council, China has an insatiable appetite for gold, which looks likely to continue in an environment where domestic mine supply lags behind demand.
Data released in the Eurozone also lift sentiment. The 16-nation's industrial confidence improved to -10 in March (consensus: -11) from -12.7 a month ago. While other confidence indices were inline with expectations, they mostly showed improvements from February.
US' personal income was flat in February while January's reading was revised up to +0.3%. Personal spending rose +0.3% during month while January's reading was revised slightly downward to +0.4%. PCE deflation moderated to 1.8% (as expected) from 2.1% in January.