Two weeks into 2016 and it’s not been a pretty sight for equity investors, with oil prices down nearly 20%, and global equity markets down in the region of 10% already with the very real prospect of the risk of further losses in the coming weeks, with China and oil prices once again set to take centre stage this week.

The focus today is once again going to be on the direction of oil prices, which have come under further pressure now it has been officially confirmed that Iran has been given the green light to re-enter the oil market. This sparked further sharp declines on Middle Eastern markets yesterday, and in Asia this morning, though the Chinese markets appears to be holding up for now, probably as a result of weekend measures by the PBOC to stem capital outflows by imposing a reserve requirement of offshore currency in order to restrict speculation on further depreciation of the Yuan..

Early indications for European markets suggest that we might see a fairly stable open now that the worst kept secret in oil markets is now official, though that looks likely to be put to the test if Asia’s market performance is any guide.

This resilience in Chinese markets may be because the Chinese economy will take centre stage tomorrow when we get the latest Q4 GDP numbers, which are likely to meet expectations, as well as December industrial production and retail sales numbers.

The direction of US interest rates in the coming months is also likely to be fertile ground given last week’s disappointing economic data. While last months Fed rate rise was largely anticipated it appears to have done nothing to assuage investor concerns about the condition of not only the US economy, but the global economy in general, as fears of higher US rates trigger off concerns about higher debt servicing costs in emerging markets, at a time of collapsing commodity prices.

If anything the continued hawkish rhetoric from Fed members has reinforced concerns that Fed policymakers are in denial about events not only within their own borders, but also the effects that higher rates could have elsewhere in the global economy.

The continued weakness in commodity prices, particularly in the oil and gas sector continues to spook world markets and now that Iran has been given the green light to come in from the cold, it is likely to be difficult to see where the next rebound in oil prices is likely to come from, raising concerns about further bankruptcy losses across the sector, if as predicted prices fall further towards $20 a barrel.

As it stands while US headline prices are at $29 a barrel, within the US they are already much lower than that, nearer to $25 a barrel, and last week’s US economic data speaks to that economic weakness as Empire manufacturing cratered in January to its lowest level since March 2009, when the Federal Reserve started its first QE program.

While optimists would quite rightly point out that manufacturing is a small part of the US economy, with services fulfilling a much greater percentage of economic activity as in most other economies, the outlook for the sector globally looks particularly bleak with manufacturing recessions in China, the UK, Japan and potentially Europe as well.

Despite the weakness in oil prices acting as a significant fiscal boost to consumer incomes, and helping create an economic rebound in Europe, it doesn’t appear to have translated into a boost to US retail sales in the same way it has here in the UK, which given that the US jobs market is supposed to be near full employment according to the President of the San Francisco Fed John Williams is rather worrying.

There is also the fear that further declines in oil prices are likely to lead to forced liquidations from the very investors who have helped push global markets to the levels that they are now, namely the sovereign wealth funds from the Gulf States, as they look to mitigate the sharp falls in revenues closer to home.

Last year the Qatar sovereign wealth fund hit the headlines after suffering multi-billion dollar losses on its stakes in Glencore and Volkswagen, and given the additional declines seen already this year in some of its other holdings this could trigger further weakness.

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