Asian shares rallied on the morning session on Monday as driven by the upbeat market sentiment after the better-than-expected US employment report released last Friday. Meanwhile, investors were also more relieved by Spanish officials' comments as it has become more likely for the country to seek funding from the EFSF. The MSCI Asia Pacific Index gained +1.6%. Commodities, however, eased after the sharp rise on Friday.
Positive sentiment was carried forward to Asian session today as the US non-farm payroll addition came in higher than expected. The number of jobs gained +163K in July, up from the downwardly revised +63K a month ago. The market had anticipated the July addition would be +100K. The unemployment rate climbed higher to 8.3% in July, as the number of unemployed increased by +45K, compared with 8.2% in June.
Concerning the Eurozone, it has turned more likely that Spain would seek help from the EFSF/ESM. Prime Minister Rajoy said that "depending on the circumstances, we will make one decision or another... When somebody asks for something, they must know what they're asking for". Meanwhile, Spanish Finance Minister de Guindos said over the weekend that "when we know the details, we'll have a more precise calendar". The Spanish government still has around a month to make the decision as the nest government bond auction will take place on September 6.
We have a light economic calendar today. The Sentix investor confidence would probably fell to -31 in August from -29.6 a month ago. The RBA will be meeting Tuesday. It's widely anticipated that policymakers will leaves the cash rate unchanged at 3.5%, following rate cuts in May and June.
Commitments of Traders:
Speculators were mixed towards the energy complex in the week ended July 31. Net length for crude oil futures dropped -16 296 contracts to 174 397 while net shorts of heating oil fell -2 168 contracts to 913. Net length for gasoline decreased -5 535 contracts to 63 902. Net short for natural gas futures fell -3 037 contracts to 75 412.
With the exception of platinum, speculators were bullish towards precious metals during the week. Net length for gold futures gained +13 087 contracts to 126 064 while that for silver added +4 877 contracts to 13 036. For PGMs, net length for platinum decreased -283 contracts to 18 281 while that for palladium climbed +195 contracts to 4 411.