Financial markets eased a tad in Asian session on Monday. While the US data released last week contained pleasant surprises, sovereign debt problems in the Eurozone remained worrisome. As the US calendar will be light this week, the focus will once again be on Europe. German Chancellor Merkel and French President Sarkozy will have their first meeting in 2012 today, discussing about new policies about fiscal discipline negotiated in early December. The meeting will be followed by a press conference.
Market sentiment was not helped by better-than-expected money data released in China. New loans increased to RMB 640.5B in December up from RMB 562.2B a month ago. The broad M2 money supply soared +13.6% from a year ago, compared with +12.7% in November. The outcome probably reflected the PBOC's move to reduce the reserve ratio for the first time in almost 3 years to encourage lending in December. In coming months, the government's monetary policy is expected to remain loose in order to stimulate growth and to pave the way for soft landing.
On the dataflow, the focus will be on the Eurozone with Germany's trade surplus probably widening to 12B euro in November from 11.6B euro a month ago. The country's industrial production should have gained +4.1% m/m in November, following a +0.8% rise a month ago. Eurozone's Sentix Investor Confidence for January will be released.
Commitments of Traders:
With the exception of crude oil, speculators were bullish towards the energy complex in the week ended January 03. Net length for crude oil futures decreased -120 contracts to 144 468. Net length for heating oil climbed +6 436 contracts to 17 519 while that for gasoline rose +7 158 contracts to 62 044 Net short for natural gas futures dipped -2 571 contracts to 158 020.
With the exception of palladium, speculators were bullish on precious metals. Net length for gold futures added +183 contracts to 130 971 while that for silver soared +2 783 contracts to 9 638. For PGMs, net length for platinum gained +927 contracts to 19 486 while that for palladium decreased -726 contracts to 5 184.