Dark economics clouds hang over 2015 as oil slips even further

The New Year continues trudge along on its dismal start, as oil ramped up its decline in 2015.

After the euro scare defined Monday, today’s focus returned to oil, as Brent Crude continued to spiral downwards, at one point hitting $52.05 per barrel to reach (yet more) fresh 5 and a half year lows. Unlike its decline at the tail end of last year, oil hasn’t seen any minor rebounds to stall its drop in 2015. Every day it has ticked a point lower with nothing in the way of economic data to provide the commodity with some form of hope.

The FTSE has been one of the world’s biggest losers following the oil price-crisis, as its prevalence of energy stocks has been consistently hit by the capitulating commodity. Combine this with the UK’s place in an EU that is struggling to hold itself together, and the short-term outlook for the UK index does not look good. On top of this, miserable services PMI numbers meant that the FTSE is still struggling to escape the dark economic cloud hanging over the start to 2015.

A dysfunctional Eurozone was the cause of yesterday’s problems, and suffered alongside its global peers as investors were spooked by the potential wide-reaching effects of the upcoming Greek election. This morning was not much better; a largely disappointing round of service PMI data led the Eurozone indices lower, as the euro continued to struggle against the dollar. There is sense around the Eurozone that the next few weeks will be damage limitation until the decisive ECB meeting and the Greek election provide clearer insight into the Eurozone’s long term future, and more importantly, stability.

With a quiet day for data meaning the US markets could not help but be suffocated by the mood in Europe, the Nikkei followed suit and posted its biggest one-day fall in 10 months. Greece is once again becoming the unlikely source of global bearish sentiment, and alongside the protracted, and never-ending, saga of oil, the Japanese index didn’t have much chance of a positive Tuesday. With little in the way of home-grown economic news this week, the Nikkei will be at the mercy of a miserable Europe and a disappointing US for much of the week.

Finally, after a quiet Monday led to doom-laden afternoon for the US markets which saw red marks across the board, the Dow et al. will be looking to American ISM non-manufacturing PMI and factory orders to try and lift not only the US markets, but the worldwide indices, from what looks set to be another difficult morning. If the USA intends on regaining the points that have been wiped out in 2015 it had better hope for its own data to come in strong, as it appears that will be no bullish sentiment from anywhere else.