Commodities rallied as driven by more positive news from European. While the market anticipated the plan to be announced on the November 3 G-20 summit will be substantial for resolving the Greece debt crisis, S&P's affirmation of credit ratings of France and Belgium also helped ease market worries. On the macro front, industrial production in Italy and France beat expectations. The front-month contract for WTI crude oil price soared for the 4th consecutive day, rising to a 3-week high of 86.09 before settling at 85.41, up +2.93%, while the equivalent Brent crude contract surged to as high as 109.5 before ending the day +2.90% higher. The Comex gold contract gained +2.14% amid weakness in the US dollar.

S&P confirmed France's credit rating at AAA with a stable outlook and Belgium's AA+ rating with a negative outlook, suggesting the rating agency has not adjusted its views towards the 2 countries after nationalization of the French-Belgium bank Dexia. Indeed, the nationalization would be more negative for Belgium than France as the former would have to pay 4B euro for the consumer lending unit of Dexia and will guarantee 60% of the 'bad bank' to be set up for pooling toxic assets. France will guarantee 36.5% while Luxembourg's share will be 3.0%. Moody also affirmed France's AAA rating with a stable outlook.

Other issues that investors lifted sentiment was ECB's report of the the smallest purchases of government bonds since re-launch of the program in August. Meanwhile, the market also turned optimistic that the EU/ECB/IMF troika will soon announce approval of the next tranche of Greek funding. These news and speculations overshadowed the reschedule of the debt crisis summit to October 23 from October 18 with EU President Van Rompuy stating that 'further elements are needed to address the situation in Greece, the bank recapitalization and the enhanced efficiency of stabilization tools'.

We had a light calendar with Japan, Canada and the US on holiday. Again, in the Eurozone, French IP rose +0.5% m/m and +4.4% y/y in August while Italian IP gained +4.3% m/m and +4.7% y/y during the month. The 2 sets of readings were above market expectations and somehow restored confidence over the economy in the region.