Mixed headlines led to financial markets struggle yesterday. In the Asian session, economic data released in China was inline with expectations and gave some comfort to the market. However, concerns over the global outlook re-emerged as Germany and France clashed ahead of the EU summit. In the US, earnings results from Google disappointed and initial jobless claims unexpectedly climbed. On net, Wall Street slipped with the DJIA and the S&P 500 losing -0.06% and -0.24% respectively. In the commodity sector, crude oil prices fell as the US dollar rose. The front-month contract for WTI crude oil price stayed largely unchanged at 92.10 while the Brent crude fell further to 112.42, down -0.71%. The benchmark Comex gold contract for slipped -0.47%.

China's GDP grew +7.4% y/y in the third quarter. While this indicated a further slowdown in the country's economic growth, the result was inline with market expectations. From a quarter ago, GDP rose +2.2%, the highest in 4 quarters, in 3Q12. Premier Wen Jiabao said that China's economy has started to stabilized and he's confident of the reaching the annual target of +7.5%. Expansion in industrial production, retail sales and fixed asset investment also rebounded in September.

The EU summit is now underway in Brussels. Yet, ahead of the meeting, it's reported that French President Hollande and German Chancellor Merkel disagreed on formation of a fiscal union. While both agreed on the need to specify a clear and tight timeframe for a banking union, Merkel is keen to push towards a fiscal union but Hollande refused to bring the fiscal union into discussion at today's summit. Yet, we expect there would not be any major announcements from this EU summit but the post-meeting statement may include comments about the single supervisory mechanism for banks and Spain.

In the US, Google's disappointing earnings results for 3Q12 led a sharp decline in the technology sector stocks and upstaged a relatively upbeat report from Morgan Stanley. Meanwhile, initial jobless claims rebounded +46K to 388K in the week ended October 13. the 4-week moving average fell -5K to 3276K, the lowest level since May, last week. Moreover, continuing claims fell -29K to 3252K in the week ended October 6. Today, the US existing home sales probably dropped to 4.7M in September from 4.82M a month ago. In Canada, headline CPI might have climbed +1.2% y/y in September, unchanged from the prior month.

Oil and Gold Reports contributed by Oil N' Gold