After gaining +9.3% in February, the front-month contract for WTI crude oil slid -1.2% on the first day of March amid USD's strength and disappointing China and US PMI data. The black gold surged to as high as 80.62 Monday before closing at 78.7. While stronger-than-expected personal spending boosted equities, it failed to support commodities.

US ISM manufacturing fell to 56.5 (consensus: 57.9) in February from 58.4 in the previous month. Production dropped to 58.4 from 66.5 while new orders slipped to 59.5 from 65.9 in January. Cold weather and recalls at Toyota were 2 of the factors weighing on the readings. However, the bright side is employment which soared to 56.1, the highest level since January 2005, from 53.3 in the prior month.

Although personal income missed consensus by rising only +0.1% m/m in January, it was due to decline in interest and dividend income. Wage and salary actually rose +0.4%. Personal spending, on the other hand, soared +0.5% m/m during the month, thus lowering the saving rate to 3.3%. Investors seemed to be delighted by the data, resulting in strong stock markets and USD.

Gold price was little changed Monday with the benchmark contract closing flat at 1118.3. Others in the precious metal complex also pared gains made earlier as the dollar rallied. Silver, after rising +1.5% to a 1- month high at 16.77, ended the day at 16.469, down -0.3%. For PGMs, platinum settled at 1544, up +0.3%, after soaring to 1565.5 while palladium managed to rose more than 1% to 438.

USD rose against major currencies yesterday as investors viewed recent US data evidence of economic recovery. Problems in trading partners also helped the dollar. In the Eurozone, deficit issue in Greece is still in focus. The Greece Prime Minister George Papandreou is going to meeting Germany's Angela Merkel ion March 5 but the market remains unconvinced that other European countries will offer sufficient support to Greece and other countries with fiscal difficulties.

The pound tumbled yesterday as polling results showed that Conservatives' lead over Labours narrowed to 5%. Increase in the likelihood of a hung parliament, after the general election due by June, raised concerns that government policies including plans to cut deficit will be harder to get implemented. The pound plummeted below 1.5 against the dollar, the first time in 10 months.

Today in Asia, commodities were little changed. The RBA announced to raise its policy rate by 25 bps to 4% as Australia's economic growth accelerates and interest rates 'remain lower than average'.