Ugly initial jobless claims and Philly Fed survey ruined sentiment which had improved modestly after encouraging UK data. Commodities, stocks and other risky assets tumbled while USD, JPY and the treasury soared in the NY session. Gold, recently regained its safe-haven appeal, rallied to a 7-week high as global economic uncertainty increased. WTI crude oil plummeted after rebounding to 76.1 in European session and eventually settled at 74.43, down -1.31%. Gold price, on the contrary, extended rally for a 6th day to a 7-week high of 1239.5 before settling at 1235.4, up +0.32%.

US'initial jobless claim surprisingly rose to 500K in the week ended August 14 from an upwardly revised 488K in the prior week, The market had anticipated a mild pullback to 480K. This is the third consecutive gain and brings the 4-week moving average to 482.5K from 474.5K. Continuing claims however dropped for a second consecutive week, by -13K, to 4478K. The overall picture sent to the market was disappointing and signaled that US employment situation is deteriorating.

The Philly Fed Index unexpectedly plunged to -7.7 in August (consensus: +7.5) from +5.1 in July. Details of the report also pointed to a weaker tone in the manufacturing sector with new orders, shipments, employment, unfilled orders and inventory declining from a month ago. This may suggest that other manufacturing data such as the Chicago PMI and even the ISM manufacturing index will come in weaker than previously expected.

Wall Street slumped after the data with DJIA and S&P losing -1.39% and -1.69%, respectively. European bourses also erased early gains and ended the day lower. Stoxx600 fell -1.43% to a 4-week low of 253.9. Today in Asia, market sentiment remains fragile. The MSCI Asia Pacific Index declined for a first time in 6 day and Japan's Nikkei 225 Stock Average slumped -1.52% to 9220. The Nikkei newspaper said that Sharp, the biggest maker of LCD in Japan, will cut output amid flaggy demand. Strength in Japanese yen also damped Japanese company profits. The yen rallied against the dollar and the euro as the BOJ has not announced measures to stimulate the economy and stem yen's rally.

Natural gas storage gained +27 bcf to 3012 bcf in the week ended August 13. The addition was lower than consensus forecasts of +32 bcf and last week's +37 bcf. Currently, the stock level is -185 bcf below the same period last year and +196 bcf, or +7%, above the 5-year average of 2816 bcf.

Despite the smaller-than-expected inventory build, Nymex gas price slipped in tandem with its energy counterparts with the front-month contract plunging to 4.14, the lowest in almost 3 months, before settling at 4.17, down -1.60%. While the broad-based worries about a double-dip recession is a main reason, price declined as seasonal catalysts pushing demand higher seemed to have disappeared this year. The weather is mild. Meteorologists forecast that temperatures will be in a normal range in the eastern US through August 27. Mild weather is expected to reduce fuel consumption in power plants. Moreover, thunderstorms seem to have less impact on oil supplies in the Gulf of Mexico so far this year.

We have a light economic calendar today. The data worth monitoring is Canada's CPI which should have stayed flat in July after contracting -0.1% in the prior month. From a year ago, inflation probably gained +1.9%.