While supply adjustments continue there still remain no signs that the recent slide in oil prices is beginning to show any signs of abating. Brent prices hitting their lowest levels since 2004 below $36 a barrel appears to have prompted bout of weakness in equity markets as we head into a holiday shortened trading week. Comments yesterday from both Qatari and Iraqi oil ministers that the recent slide in oil prices would be temporary appear to have been largely ignored as markets start to treat any attempt by OPEC and non OPEC members to talk up prices as white noise. Investors instead are focussing on the prospect of ever rising supply and a US dollar buoyed by last week’s rise in interest rates which is helping bear down on commodity prices more broadly, with the Bloomberg commodity index continuing to close in on the 1999 lows of 74.24 seen in the first quarter of that year, though we do appear to be seeing some stabilisation in copper and iron ore prices, on reports from a Chinese news agency that we could well see further easing from Chinese policymakers as Beijing strives to meet its growth targets for this year and next. While European markets were able to post gains last week, they still remain well below the levels that we saw at the beginning of the month which means any prospect of a Santa rally at this point is about as likely as getting a white Christmas. Rising uncertainty about the broader economic recovery being sustained in Europe appears to be keeping investors cautious. Various comments from ECB policymakers about too high expectations of central bank monetary policy would appear to suggest that the prospect of further large scale stimulus measures in the near future remain some way off, after this month’s ECB false start. Several ECB policymakers have pointed to a slowdown of the reform process in several European countries, and it is slowly becoming apparent that this process is unlikely to improve in the near future with Spain the latest Eurozone country politically gridlocked, after an inconclusive election result, following on from Portugal and Greece earlier this year. As far as data is concerned today the main focus this morning is likely to be on the latest UK borrowing numbers for November which is expected to see a rise to £11.1bn from £7.5bn in October. November generally tends to be a weak month in any case with December usually a little stronger as the tax year deadline gets closer. Even allowing for that the Chancellor looks set to fall short of his borrowing target for this tax year unless tax receipts start to improve substantially, with the low oil price undermining VAT tax receipts at the pumps. Coming off the back of the first Fed rate rise in 9 years the jury still remains out as to whether the Fed has erred given continued weakness in the manufacturing sector of the US economy, and weakness in commodity prices. The latest Q3 GDP revisions for the US economy are the latest in rear view mirror data, telling us more about where we’ve been as opposed to where we are headed. Even so they are expected to point to a weaker number and a revision lower to 1.9% in Q3 from 2.1%. EURUSD – the key support around the 1.0800 area continues to hold for now. A move below 1.0800 could well see a move back towards 1.0620 undermining the prospect of a return to the 1.1000 area and retest of the 100 and 200 day MA at 1.1050/60. GBPUSD – the continued weakness of the pound brings the prospect of a move back to the lows at 1.4565 closer. A move below the support at 1.4850 could well be the catalyst for this move to unfold. The pound has declined four days in succession and needs to recover back through 1.5000 to stabilise. EURGBP – the break through the 0.7300 area could well see the euro push up back towards the October peaks at 0.7495. Having held for all of last week the 0.7300 area should now act as support on any pullbacks, with interim resistance at 0.7375. USDJPY – continues to chop within the broad range with the 122.20 area acting as a pivot. While below here support sits near 120.00, while a break above retargets the highs just above 123.00 CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.