Investors continue to offload the long positions taken late last week as macroeconomic economic outlook remains uncertain. WTI crude oil price falls for a second day amid concerns that slowdown in US recovery will curb demand. Currently trading at 73.6, the font-month contract will probably record the first decline in 2 months. Oil products also weaken in tandem with gasoline tumbling almost -10% while distillate losing around -3%.

Natural gas unexpectedly staged a strong rebound yesterday after severe selloff over the past week sent price to the lowest level since September 2009. The market generally believed the rebound was driven by higher temperatures in the US Northeast over the next few days. The National Weather Service forecasts that temperatures in New York, Boston, Chicago, etc will be 11-15 degrees Fahrenheit higher than normal and this should drive heating demand. We believe another other reason supporting gas price was a report from the US Energy Department showing decline in US gas production in June, after first straight months of increases. In June, natural gas production slipped to 61.18 bcf/day in June, down -0.84 bcf/day or -1.36% from May. Natural gas underperformed others in the energy complex in August and is expected to record over -20% decline during the month.

Economic data released in Europe was largely inline with market expectations. Unemployment rate in the Eurozone stayed flat at 10% in July. In Germany, unemployment dipped -17K to 3.19M in August, after dropping -21K in June, while the jobless rate stayed at 7.6%. Inflation for the 16-nation region however, slowed to +1.6% in August after increasing +1.7% a month ago. The euro changes little against the dollar but tumbled against Swiss Franc.

In emerging markets, India’s economic expanded +8.8% y/y in 2Q10, the fastest pace in more than 2 years, as mainly driven by a +9.9% growth in non-farm sector. It’s likely that India’s growth in the second half will slow down because of moderation in industrial activities. Elsewhere, industrial production in South Korea expanded +1.1% m/m in July, eased from a +2.7% growth in June.