.Following their recent pattern of one step forward, one step back, stock markets in Europe and North America took a step back to start a quieter week for news in between last week’s ECB meeting and next week’s FOMC meeting.

Oil markets, however saw a lot of technical action with Brent and WTI taking 5-6% hits. Brent broke down below $42.00 and challenged $40.00 while WTI took out $37.40 as it continues falling toward a possible retest of the 2008 low near $35.00. Gasoline and heating oil also staged 5%+ declines while natural gas fell 4.5%.

Energy markets were totally undermined by the clear signal out of Friday’s OPEC meeting that the cartel has no intention of ending its price war any time soon. With Iran returning to the market in 2016 as sanctions come off and Indonesia rejoining the group, OPEC apparently has put off discussing a new cap until June at least. Uncertainty breeds contempt and traders certainly appear to have taken the lack of direction from OPEC as a bearish sign.

The oil price crash also had a big impact on oil sensitive markets. CAD fell to its lowest level since 2004 while Canadian indices fell over 2% compared with the 0.3% decline in their US counterparts. MXN, NOK and RUB were smashed for even bigger losses than the Loonie on the day, while the FTSE with its higher oil company weighting underperformed the Dax.    

Oil, and copper for that matter, could remain active through today’s Asia Pacific trading session. China trade figures are due which traders may look to for a sign of which way resource demand trends are heading. Japan’s GDP update may also attract attention with an upward revision big enough to reverse the initially reported declines expected by the street.

Corporate News

There have been no major announcements after the US close today

Economic News

Significant announcements released overnight include:

Germany industrial production        0.7% vs street 0.2%

Upcoming significant economic announcements include:

(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)  

10:50 am AEDT        Japan annualized GDP update        street 0.2% vs previous (0.8%)
TBA            China trade balance            street $64.0B
TBA            China exports                street (5.0%)
TBA            China imports                street (11.9%)

12:00 am GMT        UK same store sales            street 0.5%
8:00 am GMT        UK Halifax house prices            street 9.5%
9:30 am GMT        UK industrial production            street 1.2%
9:30 am GMT        UK manufacturing production        street 0.0%
3:00 pm GMT        UK NIESR GDP estimate        street 0.6%

10:00 am GMT        Eurozone GDP                street 1.6%

8:15 am EST        Canada housing starts            street 200K
1:10 pm EST        BoC Poloz speaking


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