Oil prices continue to slide amid a global slowdown and a persistent supply glut. Brent futures briefly dipped below $50 for the first time since 2006, for then quickly rebound to $50.67. However, Asian and European markets advanced as the price of Brent hovers around this support level. Deflationary data was welcomed in Europe as speculators bet on higher likelihood of a European QE. Eurostat data showed that, although core inflation ticked up 0.1% higher last month, overall CPI fell to a six-year low at -0.2%. This new report, adding to the ongoing oil slide and concerns over Greek elections, contributed to a 0.9% drop for the common currency which currently trades at $1.1831. Additionally, dimmer expectations have pushed G3 government yields to historic lows.
Today investors will likely look at the trade balance data which might add to the greenback’s rise, but most importantly, eyes will point at the FOMC statement for more indications about the timing of a future rate hike.
The Shanghai Composite Index continued its climb for a fourth consecutive day propelled by gold producers surging on the increasing demand for gold. The TOPIX fell by 2.9% as traders indulged in short-selling of shares and caused the second largest outflow in two years, indicating a lack of faith among foreign investors in Abenomics.
European stocks rose as the inflation reports strengthened the need for quantitative easing in the EU with the Stoxx 600 Europe increasing by 0.9%. It was also bolstered by the jobs report released by Germany, which showed unemployment rate to be at a record low suggesting an accelerated growth of economy.