Tentatively positive day follows tentatively positive performance from oil

The markets spent much of the day operating on the fumes of optimism arising from Brent Crude oil’s brief Monday rally.

The commodity barely managed to cling on to overall gains today, as it receded from its $63.05 day high to linger closer to the $62.50 mark. The collective sigh of relief for a day of positivity from oil was felt across the board, even if it remained to be seen whether this rally is merely a flash in the pan or (finally) the real thing. As the afternoon went on an answer began to appear and it wasn’t good. Oil dipped again, highlighting the insubstantial nature of any unprompted rally for Brent Crude.

A day of relative strength from oil, combined with some (overall) positive data, led the Dow Jones to a good start of the week, jumping to 17377 after the bell. Initially things looked to be taking a turn for the worse for the US, as the Empire State manufacturing index effectively collapsed to -3.6, a staggeringly low figure when compared to last month’s 10.2. However, things had righted themselves within the hour, as the capacity utilization rate and industrial production came in better than expected, at 80.1% and 1.3% respectively.

As oil managed a rare run of respectable prices, and the Dow Jones opened strong, the worldwide markets could continue to trade on their bullish start to the day. The British CBI industrial order expectations were a pleasant surprise for the UK markets this morning, and helped the FTSE maintain its growth until the Dow opened to help it some more.

After wobbling a bit in the middle of the day, the FTSE managed to just about hang on to its gains, spending much of the day at around 6300. Whilst this is far below the highs reached a few weeks again, in the face of the current global economic situation, a day of positivity, however minor, is much appreciated for the UK index. Tomorrow sees the Bank of England’s stress test for the UK’s banks; these figures could lead to a volatile day for the FTSE due to its prevalence of banks, so the UK index may want to value its positivity whilst it still can.

Finally today saw a mixed performance from Europe, with the markets maintaining some stability in the face of a plummeting rouble and riots in Belgium. With one US dollar now buying 60 roubles, the Russian currency has reached what many consider to be its psychological threshold. Russia has been hit harder than most by oil’s demise, and mixed with the sanctions imposed by the EU, Putin’s nation has struggled to keep its head above water.

However, whilst the Russian economy continued to drown, the DAX managed to have a fairly flat day, utilising the same minor bullish sentiment that was felt throughout much of the world, to loiter just below 9600. This tentatively positive day of trading may be lost by tomorrow, when PMI numbers for France, Germany and the overall Eurozone are announced. The Eurozone has been noticeably inconsistent with its figures recently, so a weak set of data would not bode well for the DAX et al.