Crude oil pulls back again after soaring to 67.33 in European morning as USD strengthens. Moreover, mixed performance in European stock markets Tuesday put pressure on energy prices. Although the tension in Iran remains a threat, the actual impact is likely minimal as spare capacity is so ample that producers in other countries can easily produce more to meet demand.

USD rebounds for the second consecutive day against the euro. Current trading at 1.455, the greenback has recovered 1.4% from the 1-year low of 1.4843. Bank Rossii, the Russian central bank, cut its refinancing rate by 50 bps to 10% and reduced the repurchase rate charge on central bank loans, also by 50 bps, to 9% in an attempt to boost economic growth. In the accompanying statement, Bank Rossii said that 'further steps in lowering interest rates will depend on the need to create conditions for broadening lending and stimulating economic growth, taking inflationary tendency into account'. The action spurs worries on global economic recovery and drives investors back to safer investments.

Economic data released in the Eurozone were largely inline with market expectations. Economic confidence improved to 82.8 in September, slightly higher than consensus of 82.7, from 80.8 a month ago. Other confidence indices also rose during the month with consumer confidence, industrial confidence and services confidence rising also rose to -19, -24 and -9 from -22, -26 and -10.7 respectively.

The market's focus has been shifted to US' consumer confidence to be released by the Confederation Board. September's reading should have risen to 57 from 54.1 in August as driven by better stock markets and stabilized employment conditions.

Gold remains under pressure after failing to re-test 1000 Monday. Strength in USD certainly weighs on the yellow metal. Others in the precious metal complex also decline with silver slipping to 16.1 and platinum edging lower to 1275. Impala Platinum's production cut fails to help platinum price amid broad-based decline in the complex. According to Impala Platinum, the second largest platinum producer, said production in its Impala Lease Area mine will be lowered by 100K oz from previous estimates of 950K oz due to an accident and a strike.

Base metal prices are mixed today. While copper and aluminum drop, nickel rebounds while zinc has little change today. The major issue in the complex is rapid slowdown in Chinese buying. Take a look at copper, stockpiles has increased to 344.4 metric tons, the highest level since May 19, in LME. Demands have weakened a lot in recent months and this is obviously due to completion of stockpiling in China. The only exception in demand slippage is aluminum as the restocking process has not completed yet. However, we believe demand should reduce in coming months.