DoJ bringing down European banks

Market sentiment continues to suffer as a result of recent Deutsche Bank woes, with the financial sector leading the race to the bottom this morning. With the US Department of Justice aiming to also penalise Barclays and Credit Suisse alongside Deutsche, there is a fear that we could see huge amounts of fines levied across the whole industry, effectively wiping out much of the safety buffers built up in case of emergency.

The glee evident within the energy markets in the wake of the OPEC cut this week appears to be fading, with both Brent and US crude pulling back overnight. The problem is that even if we do see this agreement put into action, we may not even see a substantial rise in crude prices, with increased US output responding to any rise in oil prices.

Eurozone inflation rose to an eight month high in September, proving that there is something behind Mario Draghi’s insistence that rising inflation expectations should soon impact current inflation rates. Unfortunately at a time when markets are faltering, todays reading will be relatively hawkish when considering the monetary policy implications at the ECB.

Ahead of the open we expect the Dow Jones to open 2 points higher, at 18,145.