Commodities weakened further on Monday as growth concerns in the Eurozone continued to weigh on prices. The front-month WTI crude oil (June) price plunged to a 5-month low at 67.27 before settling at 70.08, down -2.14% from Friday's close. Buying interests were seen below 70. With the June contract expiring on May 14, the July contract for Brent crude slid for a 3rd consecutive day and closed -3.63% lower at 75.1, the level not seen since February 2009. As the June WTI contract expires this week, the premium of Brent over WTI crude should narrow to $1 -$2 /bbl, compared with more than $5/ bbl last week.

It's been 4 weeks since an explosion that caused oil spills into the US Gulf of Mexico. However, little remedy has been done to stop the leak. BP announced that it successfully inserted a funnel to move some of the oil onto a ship but the leak will still amount to 5K bpd. The problem needs to be resolved as soon as possible as a 6-month halt to new drilling permits in the Gulf of Mexico could delay 4% of estimated 2011 deepwater production, according to industry experts.

Gold changed little and hovered within a range of 1220 and 1240 yesterday. As panic selling in most asset classes was over (at least in the near-term), desperation to seeking safe-haven diminished. Apart from the yellow metal, USD and JPY were largely flat yesterday.

While the sovereign risk in the Eurozone remains in the center stage, stocks and currencies stabilized as there was no more bad news received. Wall Street initially plummeted as Empire State manufacturing index disappointed. However, price recovered swiftly with DJIA and S&P 500 adding +0.05% and +0.11% respectively. Empire State manufacturing index slipped to 19.1 (consensus: 30) in May from 31.9 in the prior month. European stocks were mixed. While UK's FTSE 100 and France's CAC 40 lost ground, Germany's DAX edged +0.17% higher.

We are going to have a busy economic calendar today. UK's CPI probably rose +0.4% m/m in April, easing from +0.6% in the prior month. Annual reading should stay at +3.4%. all components in Eurozone's ZEW index are expected to drop in May as impacted by Greece's deficit problems and it's spreading to nearby economies. In the US, housing starts are anticipated to have increased +3.83% m/m to 650K in April but were partly offset by -1.46% decline in building permits.