Crude oil price strengthens to 72.4 in European morning. News about ECB president's attendance to a EU meeting spurs speculations that policymakers will help resolve Greece's deficit problem. Moreover, the US National Weather Service issued storm warnings from Utah to New Jersey and signals of below-normal temperatures in the East. Cold weather support energy prices as it boosts consumptions. Others in the energy complex also rise with heating oil surging +1% to 1.901 and gasoline +0.5% to 1.9026.

Stocks rebound in Asia. The MSCI Asian Pacific Index added +0.3%. While Japan's Nikkei 225 Stock Average slipped -0.2% to 9932.9 and Australia's S&P/ASX 200 Index lost -0.4$, Hong Kong's Hang Seng Index, China's SCI added -1.2% and +0.5% respectively. Shares in Taiwan outperformed today with the benchmark index, Taiex Index, soaring +2%.

In Europe, stocks edge higher across the board amid market optimism that sovereign risks in Greece and nearby European countries will be aided. Although we do not believe the optimism is valid, investors can make use of the rebound to take profits.

On the currency-front, USD and JPY decline as risk appetite recovers. Moreover, many currencies such as EUR, GBP and AUD have entered oversold territories, triggering buying interests.
After plummeting to an 8-month low against USD last Friday, the euro stabilizes and recovers modestly these 2 days. Similar pattern is seen in EURJPY. However, we suspect the recoveries are short-lived until fiscal problems are solved.

Gold stays firmly above 1060. The yellow metal is expected to move sideways in the near-term, consistent with the broad-based directionless market. PGMs show stronger momentum to grind higher. Palladium climbs +1.3% to 413 after surging +2.4% Monday. Platinum adds +0.7% following yesterday's gains of +0.4%.

On February 1, the Japanese Automobile Dealers Association reported car sales in Japan surged +37% yoy to 238K vehicles in January, led by Toyota Motor and Honda. Auto sector in Japan recovers as the government implemented a subsidy program in June that consumers can apply for a 250K yen subsidy if they scrap a car of over 13 years old and buy a new one. Consumers can also obtain a 100K yen grant for a new car without scrapping an old one.

Some investors query about the impact of recent recall of Toyota's Prius model on auto market in Japan as well as worldwide. If the auto sector is negatively affected, demand for PGMs would be at risk. However, we believe Toyota's issue will not affect the general public's confidence in cars and other vehicles. While the reputation of Toyota may be affected, it should not dampen the strong momentum of auto market recovery this year.