Market Commentary Key Notes: The Federal Reserve Chairman Ben Bernanke said on Tuesday that the Fed is monitoring economic conditions and stand ready to provide further stimulus to promote recovery in the context of price stability. He urged lawmakers not to cut spending too quickly in the short-term as government belt-tightening will pose a drag on the U.S. economy. This comes at a time where European financial strains are posing downside risks to growth. Bernanke’s commitment helped to lift risk sentiments, providing a boost to U.S. stocks which managed to stage a dramatic turnaround. Today, we will receive some important economic data from U.S. that could reflect the state of the economy and set the tone for markets. Based on a Reuters poll, the ISM service sector index could dip slightly to 52.9 compared to 53.3 a month ago. The ADP national employment report is also expected to decline to 75K from 91K a month ago. The surge of uncertainty in August is likely to have impacted business sentiments, causing companies to postpone hiring and leaving the unemployment rate persistently high. Market Summary Precious Metals: Spot gold tumbled to as low as $1595 on Wednesday, wiping out gains accumulated in the previous sessions and resuming the selloff seen in September. Gold sank early with European stocks on sovereign debt woes. The metal is still struggling to find a floor after months of extreme volatility and a growing link with risk assets. In other gold news, metals consultancy Thomson Reuters GFMS reported that gold mining companies reported their first consecutive quarterly net hedging in 10 years, driven by new hedges by small producers. Base Metals: Copper ended down for the fifth consecutive day as macroeconomic pessimism dominated and kept buyers away. Data from the United States backed the grim outlook. New orders for U.S. factory goods fell in August for the second time in three months. The red metal is near its 14 month low as the possibility of a Greek default and a double dip recession increases. Prices managed to pare losses after the speech by Fed Chairman Bernanke on hopes that the Fed will step in with further stimulus plans to aid the faltering economy. Crude Oil: U.S. crude oil prices settled down 2.5% on concerns that a slowdown in growth will sap crude oil demand. However, in post-settlement trading, crude rose after equities on Wall Street had a late rally and the euro rose from a nine-month low. The American Petroleum Institute said in a weekly report that U.S. crude stockpiles fell 3.1 million barrels last week. Gasoline stocks fell 5.0 million barrels and distillate stocks were down 2.0 million barrels. Currencies: The euro jumped from a near nine-month trough against the dollar and climbed from a decade low versus the yen. European finance ministers agreed on Tuesday to safeguard their banks. France and Belgium rushed to the aid of Dexia in what will be the first state rescue of a European bank in the euro zone sovereign debt crisis. The lender will be effectively broken up. Healthier operations will be sold off while toxic assets will be placed in a state-supported bad-bank.

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