Crude oil prices came under renewed pressure in today’s session, with WTI front month futures retreating below the key level of $80 per barrel. Goldman Sachs added further pressure to the market after cutting its price forecasts for both the Brent and the WTI contracts in Q1 of 2015 by $15. In London, Petrofac, and Tullow Oil retreated sharply 2.15% and 1.92%, respectively, while Royal Dutch Shell and BP declined between 0.4% and 0.75%.
European equity markets reversed earlier gains and slid lower in today’s trading session as disappointing economic data weighed on market sentiment, while investors have already priced in the ECB’s stress tests results. The CAC, DAX, IBEX and the London equity benchmark index retreated between 0.40% and 1.4%.
The Italian stock exchange FTSE MIB plunged 2.4% (around 465 points) as Italy’s banking sector seemed to be “the standout loser” in health checks, causing further uncertainty about Italy’s economic stability and prospects.
The euro rebounded and climbed above 1.27 against the US dollar today, as stress tests found smaller capital deficits than initially expected among European banks. We received fairly poor German economic data as Ifo business climate fell for sixth consecutive month to reach 103.2 in October.
In the US, Markit services PMI was reported at 57.3 in October missing analysts’ expectations of 57.8, while pending home sales rose slightly by 0.3% m/m in September against analysts’ estimates of a 1.0% rise. The Dallas Fed manufacturing activity fell to 10.5 in October compared to 10.8 in September, again missing analysts’ expectations.