Financial markets remained depressed after the World Bank/ IMF annual meeting over the weekend. While it's known that collective actions are required to contain the current crisis, policymakers are divided on what to do. Stocks in Asian session declined as led by Japan. In the commodity sector, oil prices remained under pressure, with both WTI and Brent crude contracts hovering around Friday's closes. Gold recovered modestly but stayed below 1700. Further downside is likely in the near-term.
At the meeting over the weekend, IMF called for world policymakers to 'act now and act together' to resume global economic recovery. The world lender said that 'the global economy has entered a dangerous phase, calling for exceptional vigilance, coordination and readiness to take bold action from members and the IMF alike'. World Bank President Robert Zoellick stated that 'the world is in a danger zone' while UK Chancellor George Osborne European leaders had 6 weeks to end the crisis as credible solutions are required to be ready by the next G20 summit in Cannes on November 4.
News reports said that German and French leaders have come to some news plans of resolving the sovereign crisis in the 17-nation region. The measures include recapitalization of European banks, expansion of the EFSF to as much as 2 trillion euro and a partial default of Greek debts. Yet, the measures were not verified.
Concerning the dataflow, German IFO business climate index probably fell to 106.5 in September from 108.7 a month ago, current assessment index slipped to 115.5 from 118.1 while expectations index dipped to 97.4 from 100.1. Sentiment in Eurozone's largest economy has been obviously hurt by the deepening crisis in the region and global economic slowdown.
Commitments of Traders:
With the exception of heating oil, speculators were bearish on the energy complex in the week ended September 20. Net length for crude oil futures plunged -5 430 contracts to 159 965. Net lengths for heating oil futures reversed last week's decline and rose to 15 288 contracts while gasoline futures climbed to 40 499 contracts. Net short for natural gas futures increased to 191 690 contracts during the week.
Speculators were bearish on the precious metal complex. Net length for gold futures slid to 150 529 contracts while that for silver futures dipped to 22 538 contracts. For PGMs, net lengths for platinum and palladium futures dropped to 23 840 and 9 996 contracts, respectively, during the week.