Subdued economic activity in China weighs on oil
Evergrande concerns hits back China’s market once again
Euro weakens as Eurozone consumer prices in Germany and France decrease, raising the possibility of earlier-than-expected interest rate cuts by the European Central Bank.
Declining manufacturing activity in China contributes to a drop in oil prices, despite tensions in the Middle East keeping them somewhat elevated.
German retail sales show a 1.6% decrease in December, reflecting ongoing consumer pressure amid broader economic challenges in the Eurozone.
On the Market Watch!
Data from the Eurozone knocks out the euro again, to hover near 1.0829 following the release of consumer prices data in Germany and France. The reports indicated a decrease in inflation, raising the likelihood of the European Central Bank implementing interest rate cuts sooner than anticipated.
In January, French Consumer Price Index (CPI) dropped by 0.2% on a monthly basis in January, Whilst the annual rate fell from 3.7% in December to 3.1%.
Additionally, Germany’s preliminary figures from individual states already hinted at significant declines in annual inflation rates, signalling a retreat in inflation within the dominant economy of the Eurozone. German retail sales also experienced a 1.6% month-on-month decrease in December, reflecting ongoing consumer pressure.
Oil prices declined on the back of subdued economic activity in China, a major importer of crude oil. Although escalating tensions in the Middle East heightening concerns about the oil supply, have been keeping prices somewhat elevated.
U.S. West Texas Intermediate crude futures also saw a decline of 82 cents, or roughly 1.1%, reaching $77 per barrel. While Brent fell to $81.60.
The official factory survey revealed that manufacturing activity in China, the second-largest economy globally, contracted for the fourth consecutive month in January. This development underscored ongoing challenges in the country's broader economic recovery. Additionally, the recent court-ordered liquidation of troubled property developer China Evergrande added to concerns, given that the real estate sector contributes a quarter to China's GDP.