Financial markets in Asia climbed as US President Barack Obama signaled a budget agreement can be reached. He stated that he’s "confident we can get our fiscal situation dealt with". This alleviated concerns that the world’s largest economy would face the fiscal cliff of US$600B in as soon as January 2013. In China, there have been heightened speculations on internationalization of RMB. According to Zhou Xiaochuan, governor of the PBOC, "the next movement related to the yuan is going to be reform of convertibility". Zhou also stated that the central bank is moving in that direction and will have some deregulation. At present, the currency is allowed to fluctuate with a 1% from the central parity rate each trading day. Last week, Guo Shuqing, Chairman of the securities regulator announced that China would expand the Renminbi Qualified Foreign Institutional Investor Program (QFII) quota by RMB 200B from RMB 70B.

On the dataflow today, the US existing home sales probably stayed unchanged at 4.75M in October. The NAHB housing market index might also have stayed at 41 in November. The BOJ will finalize the meeting tomorrow for monetary decision. The Japanese yen plunged while it’s expected that the central bank would likely leave its monetary stance unchanged. As the country’s election will be held next month, the market widely anticipates the opposition party, which would opt for more aggressive easing policies, would take power. The RBA and the BOE will released minutes for the November meetings later this week.

Commitments of Traders:

With the exception of crude oil, speculators were bearish towards the energy complex in the week ended November 13. Net length for crude oil futures gained +11 923 contracts to 177 767 while that for heating oil slipped -5 503 contracts to 21 980. Net length for gasoline dropped -2 449 contracts to 60 287. Net short for natural gas slipped -19 727 contracts to 77 767.

On the contrary, speculators were also bullish towards precious metals with the exception of platinum during the week. Net length for gold future rose +11 421 contracts to 171 594 while that for silver futures added +291 contracts to 34 410. For PGMs, net length for platinum slid -1 720 contracts to 35 955 while that for palladium climbed +529 contracts to 9 886.