European equity markets fluctuated strongly in today’s trading session as most European markets gave back earlier gains and slid lower in late trading this afternoon. The CAC, DAX, IBEX and London equity benchmark index retreated between 1.2% and 1.5%, tracking sharp losses in Asian equities.
The political uncertainty in Greece continues to dominate the markets ahead of the Presidential elections on Wednesday, adding some pressure to the euro which extended declines towards 1.24 against the US dollar.
We received fairly mixed economic data, which failed to provide a clear direction. US industrial production rose 1.3% in November following a decline of 0.1% in October, beating analysts’ expectations. However, NY Fed manufacturing fell sharply to 3.58% in December from 10.16 in November, missing analysts’ estimates of 12.40. The housing figures were a bit disappointing as NAHB housing market index declined to 57 in December compared to 58 in November.
Crude oil prices reversed and gave back earlier gains with WTI front month futures falling sharply towards $56 per barrel while Brent front month futures retreated to retest $61 after previously having hit a high at $63.25.
This week, the main focus will turn to the US Fed meeting on Wednesday, as market participants await further clarification regarding the current US economic conditions and prospects.