After rising yesterday on the Iraqi oil minister’s ‘optimistic’ comments, Brent Crude has dropped by 1.2% this morning after the Indonesian energy minister stated he was ‘not optimistic’ that an output deal will be agreed tomorrow. It is somewhat laughable that after having their fingers burned so many times by OPEC that investors are still willing to send the black stuff higher and lower on the back of these bare-bones soundbites. Nevertheless, Brent’s slide helped drag the likes of BP and Shell further in the red, the oil giants falling 1.8% and 1.4% respectively, ensuring that the FTSE saw its own losses widen to half a percent as the day went on.
Over in the Eurozone the DAX and CAC have lifted away from Monday’s near 3 week lows, with the DAX up 0.2% and the CAC rising 0.7%. These gains seem to have stemmed from the euro giving up much of the ground it took back yesterday, the currency spooked by the increasing likelihood that Italy will vote ‘No’ to Mario Renzi’s constitutional reforms on Sunday.
Looking ahead to the US open and the Dow Jones faces a test of its anti-rate hike mettle this Tuesday. So far the index has been surprisingly resilient in the fact of a now near-guaranteed rate rise from the Fed in a couple of weeks. With that in mind it will be interesting to see if this afternoon’s Q3 GDP revision, likely to creep up to 3% at the annualised rate, will be taken as good news about the economy or whether the index will revert to its usual rate hike-fearing ways.