Asian equities have yet again been weighed down by sliding oil prices with the Nikkei 225 closing -3.1% as a firmer JPY also weighs on it. The Shanghai Index shrugged off better Caixin PMI figure, which printed a 6-month high, to close in the red at -1.3%. the Nikkei found some support as the JPY weakened after the BOJ Gov Kuroda`s dovish comments in which he stated that the BOJ can intervene at any time and that there was no limit to its buying power in which they have flexed recently in hopes of spurring inflation on.


The EU unemployment rate came in better than expect at 10.40% but could not give the EUR a significant lift in the light of worse than expect PPI figures and sliding crude prices. ECB`s Mersch warned markets that the ECB does not have to act in March`s meeting and that no decision has been made to do so either.


US stock markets where firmly in the red yesterday after sentiment has swung back towards a risk off approach, given crudes recent slide. The DJIA ended the day down 1.79 %, the S&P 500 finished down 1.87% and the NASDAQ finished down 2.18%. The USD was further dampened by worse than expect ISM New York data which printed at 54.6 vs 62. Todays data out of the US will be closely watched as traders look to clues of this weeks NFP in the form of the ADP non-farm Employment Change expected to come in at 193k, slightly softer than last months 257k. The ISM Non-Manufacturing PMI expected at 55.1, is sure to add volatility should it print better or worse than expected.


The National Institute of Economics and Social Research (NIESR) have stated that they expect the UK economy to pick up steam in 2016, sighting low inflation and a delay in rate hikes as the catalysts for faster growth. However, yesterday’s construction PMI showed a different story when it printed a nine month low, with a lower than expected 55 vs 57.8. Today see the Services PMI (expected at 55.4) being released , markets will be watching this figure to decide whether the recent bullish rally in the face of tomorrows inflation report is founded or whether they should begin unwinding longs and entering shorts.


Crude prices continue to slide lower as OPEC output rose to 32.42mln bpd in Jan vs 32.38 mln bpd in DEC. Russia continue to be vocal to its willingness to sit down with other oil producing nations to discuss the current supply but is being met by mute responses as the game of chicken continues. Today sees the API Crude Inventories out of the US being released which should cause some volatility and perhaps some respite for oil prices if last weeks decrease in output from the US continues.