Crude oil price recovers after falling to 81.5 earlier in Asia. The benchmark contract rises to 82.2 in European morning despite lack of upbeat data. The OPEC revised slightly upward its forecasts on global oil demand. While supplies for OPEC NGLs and non-conventional oils were revised down, 'call on OPEC' will probably be modestly higher.
In its March report, the OPEC said that global oil demand will increase +0.9% y/y to 85.2M bpd in 2010, compared with previous forecast of 85.12M bpd. The main driving force is rapid growth in emerging markets. The organization revised up economic growth in China to +9.3% while that for the US was down to +2.4%.
The International Energy Agency will release its monthly report tomorrow but we do not expect much change from previous forecasts.
Precious metals remain under pressure as USD slides against major currencies. While gold has been dropping for 4 consecutive days, we believe downside will be contained around 1100 as increase physical demand will provide support. While China pledged to stay cautions towards investing in gold, central banks under the euro-systems remain confident in the metal. The latest ECB statement indicates gold holdings remain unchanged in the week ended March 5. Since the 3rd CBGA has been announced, gold sales among European central banks have been less than 2 metric tons, compared with the annual quota of 400 metric tons, so far.
Concerning the stock market, Asian equities demonstrated resilience while European stocks are mixed. The MSCI Asian Pacific Index added +0.3% with benchmark indices in most countries edged higher. In Japan, the Nikkei 225 Stock Average gained almost +1% to a 2-month high at 10664.95 amid growth speculations. China and Hong Kong Indices managed to close flat despite worries over tightening in China. Strength in stock market helps support oil prices.
In Europe, stocks fluctuate between gains and losses as Greece is paralyzed by strikes and demonstrations. Greek citizens protest against the government's austerity measures to reduce budget deficits.
The market focus has turned to Switzerland as the SNB will announce its monetary stance. The central bank will likely leave the 3-month LIBOR range unchanged at 0-0.75%, targeting to keep the rate at 0.25%. Since the previous meeting in December, economic developments, both domestically and overseas, have been positive and modestly exceeded SNB's estimates. We anticipate the central bank will deliver a more hawkish statement in March than previous meetings. It's possible for upgrades in GDP and inflation outlooks, too.
In its March report, the OPEC said that global oil demand will increase +0.9% y/y to 85.2M bpd in 2010, compared with previous forecast of 85.12M bpd. The main driving force is rapid growth in emerging markets. The organization revised up economic growth in China to +9.3% while that for the US was down to +2.4%.
The International Energy Agency will release its monthly report tomorrow but we do not expect much change from previous forecasts.
Precious metals remain under pressure as USD slides against major currencies. While gold has been dropping for 4 consecutive days, we believe downside will be contained around 1100 as increase physical demand will provide support. While China pledged to stay cautions towards investing in gold, central banks under the euro-systems remain confident in the metal. The latest ECB statement indicates gold holdings remain unchanged in the week ended March 5. Since the 3rd CBGA has been announced, gold sales among European central banks have been less than 2 metric tons, compared with the annual quota of 400 metric tons, so far.
Concerning the stock market, Asian equities demonstrated resilience while European stocks are mixed. The MSCI Asian Pacific Index added +0.3% with benchmark indices in most countries edged higher. In Japan, the Nikkei 225 Stock Average gained almost +1% to a 2-month high at 10664.95 amid growth speculations. China and Hong Kong Indices managed to close flat despite worries over tightening in China. Strength in stock market helps support oil prices.
In Europe, stocks fluctuate between gains and losses as Greece is paralyzed by strikes and demonstrations. Greek citizens protest against the government's austerity measures to reduce budget deficits.
The market focus has turned to Switzerland as the SNB will announce its monetary stance. The central bank will likely leave the 3-month LIBOR range unchanged at 0-0.75%, targeting to keep the rate at 0.25%. Since the previous meeting in December, economic developments, both domestically and overseas, have been positive and modestly exceeded SNB's estimates. We anticipate the central bank will deliver a more hawkish statement in March than previous meetings. It's possible for upgrades in GDP and inflation outlooks, too.
