Financial markets moved with a narrow trading range ahead of US open As the news flow is light, the focus is once again on the sovereign debt crisis in the Eurozone. The commodity sector was also quiet with crude oil and gold moved sideways. The front-month WTI crude contract, after rebounding on Friday, retreated modestly today, while the equivalent Brent contract edged higher from Friday's close of 125.13.
Italy's Prime Minister Mario Monti warned that the temporarily calmed debt crisis in the 17-nation region may re-emerge due to the situation in Spain. According to Monti, Spain might not have paid as much attention to public finances although there have been profound reform of the labor market. A obvious problem is that yields are rising and it wouldn't take much to recreate trends that could spread to us through contagion. Monti's comments were echoed by EU commissioner for economic and monetary affairs Olli Rehn who noted that there was a perception that Spain was relaxing its fiscal targets for this year though he expressed confidence in the country capability to meet 2013 deficit target of 3% of GDP.
These rather negative comments were countered by better than expect Germany confidence data. Sentiment in the biggest economy in the Eurozone has improved in March. The business climate component climbed to 109.8 in March from an upwardly revised 109.7 a month ago, while the expectations index rose to 102.7 from 102.4 in February. The current assessment index stayed unchanged from the downwardly revised 117.4. US' pending home sales probably gained +1.0% in February following a +2.0% rise a month ago.
Commitments of Traders
Speculators were mixed towards the energy complex in the week ended March 20. Net length for crude oil futures declined -8 582 contracts to 243 592. Net length for heating oil rose +1 273 contracts to 33 241 while that for gasoline dropped -4 068 contracts to 90 469. Net short for natural gas futures slipped -4 669 contracts to 133 300.
Speculators were bearish on precious metals. Net length for gold futures slipped -19 443 contracts to 131 463 while that for silver dropped -647 contracts to 21 169. For PGMs, net length for platinum fell -309 contracts to 25 658 while that for palladium slid -195 contracts to 21 656.