Decline Continues

January 6, 2015

Yesterday world financial markets closed with a crash. In Europe, for one, stock indices went down due to a drop in oil prices and concerns that the political crisis in Greece could lead to its exit from the euro zone and to a default afterwards. Trading resulted in the British FTSE 100 falling 2 percent down to 6,417.16 points, the French САС 40 dropping all the 3.31 percent down to 4,111.36 points and the German DAX shedding 2.99 percent down to 9,473.16 points.

On the Russian market, the dollar-based RTS index plunged 3.72 percent down to 761.30 points. At the same time, the MICEX index grew 2.8 percent up to 1,435.66 points. This was in response to the meeting of German, French, Russian and Ukrainian representatives in Berlin. The meeting focused on the resolution of the crisis in Ukraine, and one of its outcomes was the announcement of possible withdrawal of sanctions against Russia.

US markets also reacted to falling oil prices – the Dow Jones dropped 1.86 percent down to 17,501.65 points, the S&P 500 shed 1.83 percent down to 2,020.58 points, and the NASDAQ fell 1.57 percent down to 4,652.57 points.

Last Sunday, Iraq voiced its plans to increase oil production in 2015, and on Monday, the global oil market displayed quite a strong reaction to it. Thus, the NYMEX price of WTI oil futures went down by $2.65 and closed at $50.04 a barrel. In the course of trading, the price got below $50 a barrel. On London’s ICE, the price of Brent oil futures plunged by $3.31 and reached $53.11 a barrel.

On the global Forex market, EUR/USD is holding at the support level so far. If there are no fresh stimuli for the euro’s fall, the pair will start a correction at this rate.

Anna Gorenkova, NordFX Analyst

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