Europe
In a relatively slow news day, shares in Europe rebounded early on Monday with minimal catalysts besides a small bounce in oil prices. The move in Oil was shown to be a dead-cat bounce and prices rolled over and erased most stock market gains with them.
After such a sharp drop last week, it’s not surprising there wasn’t much in the way of confidence to hold onto the morning’s share price gains going into the afternoon.
The losses come ahead of a week dense with potentially market-moving data including Bank of England minutes and the latest interest-rate setting meeting from the US Federal Reserve.
United Arab Emirates energy minister Suhail Al-Mazrouei remarked over the weekend that OPEC would be willing to withstand a drop to $40 per barrel prompting a sharp drop in oil prices as Asian trading commenced on Monday.
Oil prices stabilised as Brent crude came close to $60 per barrel but gains ebbed away and were almost entirely gone by the end of the trading day bringing European stock markets down with them.
Lower oil prices almost unequivocally boost demand in the longer term but the realisation is setting in for markets that part of the reason prices are falling rapidly right now is because global demand is slowing.
In the UK, there was some jiggery pokery as top risers became fallers depending on the price of a barrel of oil.
Shares in BT Group (LONDON:BT) were higher ahead of imminent details on a deal to buy either EE or O2 in a sign investors are approving on the move despite the possibility of a rights issue to pay for it.
US
There were mixed indications over the state of US manufacturing on Monday as the NY Empire manufacturing index fell to multi-year lows while industrial production rose at the fastest pace in years.
Liquidity seemed in short-supply on Monday as participants withdrew ahead of the latest Fed statement on Wednesday.
FX
The US Dollar was seeing broad-based strength with only the Japanese yen making up some lost ground thanks to the re-election of Prime Minister Abe and his party the LDP in snap elections.
The collapse of the Russian ruble continued with the currency seeing declines of an unprecedented 8% as USD/RUB touched 63 following news the US Senate passed a bill to intervene directly in the situation in Ukraine.
Commodities
Gold, Silver and oil all ended up lower on concerns over the strength of the global economy and its implications for commodity demand.
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