Spreadex Market Update
Global gloom following Greek failure and new oil lows
The markets’ recent nemesis, oil, returned with a vengeance this morning, after hopes that damage to Libyan oil ports would stem Brent Crude’s plunge proved to be false. Instead the commodity ignored this Libyan attack, choosing to focus on intimidating US oil forecasts which caused fresh 5 and a half year lows for the black stuff. With Brent Crude oil currently languishing at $57 per barrel, oil has answered questions of whether it had reached its bottom with a resounding ‘no’.
Oil’s latest plummet joined yesterday’s Greek failure to avoid a volatility-inducing general election next January. This spooked the Eurozone markets at yesterday’s close, and continued to cast a gloomy light over them this morning. Combine this with disappointing Spanish flash CPI figures and stagnant private loans numbers meant that, even with a slight increase in M3 money supply, the Eurozone indices uniformly opened at a loss this morning.
The energy-heavy FTSE didn’t have much hope for a strong start to Tuesday, with the record low oil prices, and a Greece-fearing Eurozone, meaning that the UK index has continued to fall after the bell. The UK then added its own bearish fuel to the global fire with its announcement that housing price growth had once again slowed last month. These factors, alongside a second suspected case of Ebola in Scotland, means Tuesday is looking grim for the FTSE.
Even the usually dependable US markets struggled yesterday, and futures are pointing to another slip for the Dow Jones et al. this afternoon. Whilst the Dow is still trading above the 18000 level, it is slowly approaching a dip below this mark; if US consumer confidence figures arrive lower than expected, then the US index could lose the ground it gained before Christmas.
Finally, with its own Ebola case causing panic yesterday, a disappointing close from America, as well as the doom-and-gloom in Europe and a limp FTSE mean that the Nikkei continued to shed points as we come to the end of the year. As the markets ready themselves for two days off, this worldwide malaise isn’t the end to 2014 they were hoping for.
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