Commodities moved narrowly in European session. Investors trimmed trading as the ECB meeting approaches. While President Draghi signaled more likelihood of bond purchases, the upcoming ECB meeting would only disclose more details about the program. No execution will be done until formal request of a debt-laden country. Therefore, disappointment after the meeting may actually cause selloff in financial markets. Besides additional details about the new bond purchase program, the ECB is expected to lower the main refinancing rate by -25 bps while keeping the deposit rate unchanged.

Gas explosion in Venezuela's Amuay, the country's largest oil refinery, on August 25 was unattended as the market put all the focus on Hurricane Isaac and the annual Jackson Hole Symposium. According to Oil Minister Rafael Ramirez, the refinery will return to full operation "in days". Currently the refinery is processing 264K bpd, 40% of normal processing capacity of 645K bpd. According to the DOE/EIA, Venezuela had 211B bbl of proven oil reserves in 2011, the second largest the world. However, as the country's conventional crude oil is heavy and sour by international standards, much of its oil production must be processed in domestic and international refineries.

Despite the 11th largest net oil exporter in 2009, exports from Venezuela have been on a downtrend in recent years as domestic demand increases. In 2010, the biggest consumer of Venezuela's exports was the US, followed by Caribbean and China. Despite a distant third (buying 6% of Venezuela's oil compared with 43% by the US), demand from China has been increasing. Apart from crude oil, China's demand for Venezuelan fuel oil is also on the rise. In July 2012, China imported about 120K bpd of fuel oil from Venezuela, same as 30% of China's total fuel oil imports during the month.

On the dataflow, the US non-farm productivity probably rose +1.8% in 2Q12, up from 1.6% in previous reading. Investors are advised to pay attention to the August employment report due Friday. The number of payrolls probably climbed +127K, following a +163K addition in July, while the jobless rate stayed at 8.3%. In Asian session, Australia reported that its GDP grew +0.6% q/q in 2Q12, compared with an upwardly revised +1.4% gain in the first quarter. Expansion in 2q12 missed expectation of +0.8%, raising expectations that the RBA would resume rate cut later this year. The central bank yesterday announced to leave interest rates unchanged, citing monetary stance appropriate against the current economic backdrop.

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