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If anyone knows how to talk up a market it is European Central Bank president Mario Draghi, who is once more the focus of attention when he speaks in Frankfurt at 6pm. Mr Draghi’s desire to ensure markets are fully acclimatising to any policy decision well in advance, will mean that he is one of the more interesting central bankers to follow.
However, as December highlighted, the notion that one member of a voting committee can fully reflect the group view is optimistic at best, and thus his statements should always be taken with a pinch of salt.
The correlation between crude oil and European stock markets is at multi-year highs right now, and thus the threat of another leg lower in oil serves as a worrying backdrop for bullish indices traders.
With that in mind, the suggestion from OPEC general secretary El-Badri that a solution needs to be found for the current oil price crash, could serve as a bullish sign to some.
However, it is foolish to believe anyone but Saudi Arabia will be the master of OPEC’s fate, given the clear disregard the nation has shown towards the wishes of fellow members who desperately need higher oil prices to balance the books. Oil will remain low for as long as Saudi Arabia deems it necessary.
Today certainly marks the calm before the storm, given the existence of numerous high-level economic releases due out later in the week. The release of Bank of Japan, Federal Reserve and Reserve Bank of New Zealand monetary policy decisions mean that volatility is more likely than ever, especially given the big moves evident of late.
It appears that the rollercoaster which has personified 2016 so far, may be ready to resume once more despite today’s somewhat uninspiring start to the week.