Although the IMF succeeded in raising $430B for protection of financial stability, the market was not as excited as expected. Indeed, investors continued to worry about the sovereign debt crisis in the Eurozone which has shown signs of worsening. In the middle of the week, S&P's lowered the credit rating of Spanish debts by 2 notches to BBB+, with a negative outlook.

Another focus was the April FOMC meeting at which the Fed maintained the policy rate unchanged at 0-0.25% and did not add further monetary easing measures. However, Fed Chairman Ben Bernanke reiterated that the central bank has 'prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target'. The language to leave interest rates at exceptionally low level at least until mid-2014 remained unchanged.

Speculations for further monetary easing increased after the US reported that GDP growth eased to +2.2% q/q in 1Q12, from +2.95% in the prior quarter. Consumer spending expanded rapidly but was offset by slowdowns in fixed investment growth and inventory investment slowed significantly.

For the coming week, the RBA meeting will be held Tuesday. The market is pricing in a rate cut of 25bps in May. On Thursday, the ECB and the BOE will also decide on the monetary policies. Both will probably stand on the sideline this month.


The energy complex gained last week but both WTI and Brent crudes remained in range-bound trading. Although a mild selloff was seen after news that Iran would halt nuclear expansion in order to avoid further sanctions, market reaction was just temporary as it was later reported that sanctions would be lifted only if significant progress is made on capping uranium enrichment at the Fordo site.

Natural gas staged a strong rally with the front-month Nymex contract gaining more than +10% and ending the week well above $2.00/MMBtu for the first time since the beginning of the month. Downside risks remained due to the injection season. The DOE/EIA reported that gas inventory increased +45 bcf to 2 548 bcf in the week ended April 20. Stocks were +872 bcf above the same period last year and +908 bcf, or +55.4%, above the 5-year average of 1 640 bcf. Separately, Baker Hughes reported that the number of gas rigs fell -18 units to 613 in the week ended April 20. Oil rigs dropped +9 units to 1 328 and miscellaneous rigs stayed unchanged at 4 units, sending the total number of rigs to 1 945 units. Directionally oriented combined oil, gas, and miscellaneous rigs slipped -3 units to 243 while horizontal rigs decreased -6 units to 1 139 and vertical rigs dipped -8 units to 563 during the week.



Gold was the outperformer in the precious metal complex last week. The +1.33% rise outweighed the losses recorded by silver and platinum as well as the +0.68% gain in palladium. The yellow metal was buoyed after the April FOMC meeting as Fed Chairman Ben Bernanke signaled that further easing is still possible. Moreover, disappointment in the US GDP also fueled speculations of further stimulus.

Physical demand in the retail sector in India has been sluggish ahead of the second- largest gold festival, Akshaya Tritiya, ahead of the review of import duties. Yet, official demand remained strong. The IMF data indicated that Mexico, Russia and Turkey added about 44.8 metric tons valued at $2.40B to reserves in March.