Yesterday’s markets were relatively subdued as the world’s largest economy; the US were closed in observance of Martin Luther King Day. Sterling continued to weaken as the sell-off trend gained ground after a lack of fundamental data.
Meanwhile, oil prices continued to be a main focus of investors. Crude oil dipped below a key psychological level of $30 a barrel to just below $28 earlier in the week as the lifting of sanctions in Iran caused large fluctuations in the price of oil. Iranian production is set to enter an oil market already in global saturation.
The highly anticipated World Economic Forum is set to take place in Davos, Switzerland this week. Attended by central bankers, prime ministers and business leaders from over 90 countries, the state of the world’s economy will be heavily scrutinised. Volatility could occur over the course of this event as markets try to decipher comments made by Central Bank officials and politicians.
Inflation on a global basis has been under scrutiny as oil prices continue their slide. Today the UK’s inflation will be under the microscope and will potentially put a further nail into the coffin of these speculating for an early rate hike. The headline inflation figure is expected to remain close to anaemic levels at 0.1%. In Germany the ZEW survey is set for release, given the recent trend in data, the market will be hoping for a positive number.