KBC Market Research Desk
KBC Bank
Trading on European equity markets was very volatile today as a further drop in the oil price weighed on sentiment, while strong PMI’s provided some support. At the moment of writing, most European shares lose around 0.50%. In the US, equities opened lower too.
Brent crude oil prices dropped below $60/barrel, continuing the sell‐off and reaching a new multi‐year low. After a temporary pick‐up, the Russian rouble is under renewed downward pressure with EUR/RUB trading at 90. Also the Norwegian krone continues its slide and jumped temporary above EUR/NOK 9.50.
British inflation fell unexpectedly to its lowest level in more than 12 years in November. The annual rate of inflation dropped to 1.0% Y/Y led by the slide in the oil price, but core inflation eased more than expected, from 1.5% Y/Y to 1.2% Y/Y. Sterling temporary lost some ground, but reversed its losses as BoE Governor Carney downplayed the slowdown in inflation.
Both US housing starts and permits dropped in November, coming out below market expectations. Housing starts dropped by 1.6% M/M to 1 028 000, while permits fell by 5.2% M/M to a total of 1 035 000. Bad weather conditions might have weighed on housing activity.
The Swedish central bank decided today to keep its monetary policy on hold, but added that they are ready to use further measures if needed, including asset buying, negative rates, cheap loans to banks and as a last resort, currency interventions. The Swedish krona weakened further today.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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