Market Slump Continues

9 December, 2014

Yesterday world financial markets posted a slump again. In Europe, due to the remarks by Ewald Nowotny, an ECB Governing Council member, that he sees “a massive weakening in the euro zone economy,” the British FTSE 100 fell 1.05 percent closing at 6,672.15 points, the German DAX shed 0.72 percent down to 10,014.99 points, and the French CAC 40 dropped 1 percent down to 4,375.48 points.

The Russian equity market slumped following a drop in oil prices. The MICEX index fell 3.13 percent down 1,481.27 points, and the RTS index plummeted all the 4.22 percent down to 870.37 points.

The US Dow Jones Industrial Average shed 0.59 percent closing at 17,852.48 points, the S&P 500 BMI dropped 0.73 percent down to 2,060.31 points, and the NASDAQ Composite fell 0.84 percent finishing the trading session at 4,740.69 points.

On the NYMEX, WTI oil futures for January plunged by $3.06 reaching $62.78 a barrel. On London’s ICE, the price of Brent oil futures for January dropped by $3.14 and closed at $65.93 a barrel. The sharp fall in oil prices was, among other factors, linked to further discounts offered by the world’s biggest oil producers. As such, Iraq intends to supply oil to Asian countries at a price four times lower than the average on the Middle East market.   

Thus, analysts take into account all these developments when predicting future oil prices. For instance, yesterday Morgan Stanley published a report that forecasts the price of oil at $43 a barrel in spring 2015 as the worst-case scenario.

On the Forex market, EUR/USD is rolling upwards and creating a new corrective wave.

Anna Gorenkova, NordFX Analyst


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