Market Commentary Spotlight of the Week Euro: Last Friday, the euro retreated to a six week low against the dollar as persistent concerns over the sovereign debt crisis caused the common currency to come under pressure. Greece is back in the spotlight as investors start considering debt restructuring as a real possibility. Ahead, we will have a meeting of Eurogroup finance ministers that could influence the direction of the euro. The finance ministers are likely to back a bailout of Portugal and tell Greece that it has to deliver on agreed fiscal and privatization targets to qualify for a new bailout package. Should policy makers make some headway in the resolution of the Greek crisis, the euro could be supported at the 1.39-1.40 level. An upside surprise in Eurozone inflation figures could also provide a much anticipated bounce to the embattled euro. Market Summary Precious Metals: While gold and silver prices rose early last week on bargainhunting, gains were subsequently reversed as the dollar strengthened against other major currencies, pressuring prices. The gold-silver ratio rose to a three month high. In other gold news, sales of gold coins are on track for the best month in a year despite the recent sell-off in commodities. The U.S. Mint sold 85,000 ounces of American Eagle coins since May 1. Crude Oil: U.S. crude oil rose to almost $100 a barrel on bargain-hunting and short covering. Strong Chinese trade data also boosted crude oil. Chinese crude oil imports in April notched their third highest level on record. However, gasoline futures took a tumble as gasoline stockpiles unexpectedly rose for the first time in 12 weeks. The EIA reported that gasoline stockpiles increased by 1.3 million barrels and crude oil stocks rose 3.78 million barrels in the week ending 6 May. Currencies: Asian currencies suffered a weekly loss, led by South Korea’s won and India’s rupee, as concern Europe’s debt crisis will worsen bolstered demand for dollars. The won dropped to a three-week low after Bank of Korea unexpectedly left interest rates unchanged. The Yuan had its sharpest weekly decline in two months as China raised lenders’ reserve-requirement ratios for the fifth time this year. The euro fell toward a six-week low against the dollar on concern Greece’s debt restructuring is inevitable. Indices: U.S. stocks declined, a second straight weekly loss, as concern over Europe’s debt crisis deepened. Asian stocks fell this week as China restricted bank lending, stoking concern anti-inflation policies may slow growth in the world’s second-biggest economy. The MSCI Asia-Pacific Index declined 1% this week. The gauge dropped 1.4% the previous week as U.S. economic data and plunging commodity prices added to signs a global economic recovery is faltering and as Federal Reserve prepares to end the $600 billion asset purchase.

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