Positive macroeconomic data today surprisingly failed to support global equity markets higher, with today’s trading activity giving back some of yesterday’s gains as investors exercised renewed caution after the recent rout in risk assets. Notable releases for the day included non-farm payrolls which came in markedly better than expected at 252K jobs added throughout December against expectations of 240K jobs. Despite the figure not being as bullish as the previous month's revised reading of a massive 353K jobs added, the most positions added since January 2012, the addition was more than market participants had expected. The unemployment rate further confirmed a promising outlook for the US labour market, falling from 5.8% the previous month to 5.6% in December which was also better than analyst expectations of a 5.7% unemployment rate.
Echoing the weaker sentiment across equity markets, crude oil market headed for a seventh consecutive week of declines as global supplies showed no signs of letting up. Front month WTI futures, after extending declines towards $46.80/bbl earlier this week, were holding around $48.50/bbl during afternoon trading as a significant supply overhang and lacklustre demand outlook. Front month WTI prices have closed lower in 14 out of the past 15 weeks while Brent future, which have closed lower in 16 out of the last twenty weeks, were tentatively holding above $50/bbl as prices consolidated some of the week’s steep losses.
Fresh downward pressure was exerted on markets today as comments from the UAE’s ambassador to the US offered further insight into the crude outlook in 2015. Yousef Al Otaiba expressed his view that there would be no immediate change in OPEC member’s policy, specifically stating that the “extra glut in the market is not coming from the OPEC members, so therefore why should the OPEC members have to cut their production?” With OPEC members standing firm in their commitment to maintain market share, we could see further downward moves in both front month Brent and WTI prices in the near future.