Markets in Europe had dipped lower on the open after slid lower on another oil price slump as prices collapsed back towards the $30 level wiping out a lot of the gains seen on the back of the BOJ announcement last week. The oil price is having affects elsewhere as well as the sustained low prices have seen BP (L:BP) post their worst annual loss in 20 years as the company looks to cut more jobs in order to cut costs and fight back towards profitability. Shares in BP fell over 7% on the open dragging oil stocks lower further and leaving many exposed to more downside as the Shell (L:RDSa) looks set to report later in the week. The Shell numbers are now going to be under even more scrutiny after last week saw the deal for BG Group (L:BG) get the greenlight. The weekend press did highlight the risk that the deal poses to the strong dividend that Shell has historically paid, however with the oil price hitting bottom line profits and BP earnings so poor today, that dividend could be under threat long before the BG deal is completed.
This morning will see some economic data out of the Eurozone released with unemployment in Germany already showing a slight improvement, we will also see Eurozone PPI released. Later this afternoon the calendar is looking quiet so yet again it will be US earnings and the oil price that drive markets. Yesterday’s numbers from Alphabet and last week from Facebook (O:FB) are still helping to undo the poor Apple (O:AAPL) earnings and lift US markets to the upside, but the oil price will yet again be a drag that equity markets may find hard to shake off.
Central banks and monetary policy are still at the heart of the major stories however with after the BoJ decision and the likelihood of further rate cuts from the ECB the focus is shifting more to loosening policy rather than tightening. Later in the week Mark Carney will discuss just however close the UK is to moving policy and will be quizzed by the Treasury Select Committee on whether the UK should be looking to follow the example set by the BoJ and ECB and look to cut rates again rather that hike. This comes after Stanley Fischer said that no decisions had been made on the number of hikes we will see in 2016.