European equities closed deep in the red yesterday, weighed down by downbeat economic data and overall risk aversion in the financial markets. The German DAX ended 99.96 points down to 8,879.40 (-1.11%), the French CAC 40 closed 68.77 points down to 3,997.54 (-1.69%), and the Euro Stoxx 50 was down 41.70 points to 2,743.47 (-1.50%).
German industrial production fell 1.2% instead of showing the estimated 0.2% uptick for December. French and Italian industrial production numbers are up for release today and analysts expect to see a 0.2% uptick for the former and a 0.3% gain for the latter.
In London, the FTSE closed 57.17 points down to 5,632.19 (-1.00%) despite the lack of top-tier data from the UK and the rebound for the British pound. For today, UK manufacturing production data is due and a flat reading is eyed.
US shares off to a rough start but losses trimmed
US equity indices also ended the day lower but the losses were already trimmed on a small rally towards the end of the trading session. Only medium-tier reports were released from the US but it appears that traders are reducing their holdings ahead of Fed Chairperson Yellen’s testimony today.
FOMC officials have been pointing out the weaker inflation outlook these days, dousing hopes of a potential rate hike in March. This has been weighing on the US dollar and US equities, as investors worry that the economy isn’t out of the woods just yet.
The Dow 30 index ended 12.67 points down to 16,014.38 (-0.08%) after dipping to a low of 15,881.11, the S&P 500 index was 1.23 points lower to 1,852.21 (-0.07%) after falling to 1,834.94, and the Nasdaq closed 15.0 points down to 4,268.8 (-0.35%) after bouncing off a low of 4,222.5.
Oil oversupply concerns still linger
The American Petroleum Institute (API) reported an increase of 2.4 million barrels in crude oil stockpiles and similar gains in other energy resources. This sets the tone for a potential upside surprise in US crude oil inventories data from the Energy Information Administration (EIA), although analysts are already anticipating a rise of 3.2 million barrels for the previous week.
WTI crude oil ended lower again, trading below $29/barrel, while Brent crude oil also carried on with its slump. Asian markets were off to a rough start, as the yen’s recent rallies are starting to weigh on the profitability of Japanese companies, and the Nikkei is down 385.59 points to 15,699.85 (-2.40%).
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