As ever, the feeling is that wherever crude prices move, the indices will follow given a relationship which seems to be stronger than ever.
The issue here is one of confidence and unfortunately, the only confidence that seems to be evident is that of traders who believe both crude prices and subsequently the FTSE 100 will go down.
Today’s headline event is coming out of the European Central Bank, where Mario Draghi re-emerges to follow up on yet another disappointing meeting in December. The issue with Mr Draghi is that his ability to talk down the euro tends to outstrip any eventual policy shift, and thus the warm-up act is often better than the main event at the ECB.
Despite the strengthening of the single currency, alongside tumbling stock market valuations, there is little expectation by way of monetary policy changes today. Instead, we look once more for Mr Draghi to begin the job of jawboning the euro down with promises of potential future action.
The big potential movers for today’s meeting thus centre upon a dovish Draghi who could lead markets towards expectations of a March rate cut, alongside any reduction in inflation expectations to reflect tumbling crude prices.
Ahead of the open we expect the Dow Jones to start 87 points lower, at 15,679.