WTI crude oil extends yesterday's rally and rises to 47.65 in European morning. Although the OPEC deferred production cut until at least May 28, G20's commitment to revive economic growth improved investors' confidence. Moreover, we have seen fundamental changes in refinery product demands.

RBOB gasoline found bottomed in December 2008 and has risen by more than 70% since then. Although recent movement indicated that price remained below $4, fundamental outlook turned much positive. In the US, contraction in gasoline demand has eased to around 1% yoy and inventories have fallen. In Japan, demand in January rose compared with the same period last year.

Gold price for April delivery trades narrowly within 915/925 today. While advance in stock markets has temporarily halted the precious metal's rise, long-term depreciation in the dollar should make it shine again soon.

The dollar index is expected to record a 6 consecutive days of decline Tuesday as investors moved the money to high-yield investments. Since Mar 5, the dollar index has plummeted by 3% from the top at 89.62 and we expect further weakness to be seen.

The dollar has dropped against the euro for the 6th consecutive day. Currently trading at 1.2989, the dollar slid to above 1.3 against the Euro Monday. Last week, the SNB's pledge to prevent Swiss Franc's appreciation especially against the euro helped boost the single currency. Furthermore, the G20 committed to recapitalize the IMF in funding Eastern Europe also eased investors' concerns on the Eurozone's great exposure in these countries.

Inflation expectation has surged in recent days. The 10-year TIPs breakeven rate rose to 110.3 yesterday, from 106.7 last Friday and 82.97 a week ago. In the FOMC meeting this week, focus should be on economy reflation and devaluation of the dollar. We also expect the Fed will put emphasis balance sheet expansion in coming months. Should inflation expectation rises further, the dollar should weaken further.