Oil desperately hopes for OPEC decision as Europe readies for another Draghi talking to

Traditionally, Thanksgiving should lead to a quieter days on the markets, as the USA tuck into some turkey later on. However the OPEC meeting in Vienna today has gained remarkable significance due to the awful summer oil has suffered.

As the members of the cartel finally ready themselves for the all-day event, Brent Crude oil fell again, opening at $77.44, just shy of 40 points than yesterday’s close, with lows already of $75.49. This comes as OPEC look set not to cut production, with pre-summit talks between the two oil behemoths Russia and Saudi Arabia yielding no change. Each member of the oil cartel is effectively waiting for someone else to blink first, the consensus being ‘we’ll cut if they cut’. Whilst in theory this sounds sensible, with no one actually willing to cut oil looks set for another precipitous fall.

The FTSE is suffering at the hands of weak oil, as it closed yesterday at 6737.5 and opened today at 6724.5. Due to the prevalence of energy companies making up the index, such as Royal Dutch Shell, Petrofac and Tullow Oil, the continued decline of the commodity is weighing heavily as the UK sees no economic announcements today that could provide a much needed boost.

The DAX, following more good news this morning, opened at 9941.5, only 0.5 points lower than yesterday’s close, and has already hit a high of 9981 early in the day. This comes as German unemployment fell by 14,000, noticeably more than the 1,000 forecast. Later today also sees German preliminary CPI figures, as well as the Gfk consumer climate numbers. More importantly, there is another ECB conference scheduled this morning.

The markets have been paying close attention to President Draghi recently, with the DAX’s current hot-streak largely based on lingering positive sentiment stemming from Draghi’s interventionist comments last week. If Draghi reaffirms the ECB’s commitment to quantitative easing as a viable option, or indeed announces a firmer course of stimulus, the Eurozone markets, especially the DAX, should rise. However, in the face of this upcoming announcement the euro may suffer, as the currency looks to the yen as a dangerous example of the effects of QE on currency.

Whilst the markets will be closed today, the Dow managed to see in the holiday by closing at another high last night, 4.5 points higher than Tuesday’s close at 17839. This marginal record is reflective of the disappointing US data that arrived yesterday, and is a potential indicator of a flagging Dow. We shall see how rested and recuperated the Dow can be when it returns from its break.

Finally, as the Dow still managed to eke out another record, the Nikkei was more badly affected by the poor US figures, opening today at 17345.5, and closing at 17237.5. As oil and Europe overtakes Japan as the economic world’s focus at the moment, the Nikkei is having a rather middling time in the run up to the snap election. It will be looking for a boost tonight as Japan announce their unemployment rate, retail sales and preliminary industrial production. However, this latter figure is expected to fall from 2.9% to -0.4%, signalling the potential for another weak day from the Japanese index.