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Relief for oil bulls short-lived

Published Thursday, January 15th, 2015

The sell-off in growth-focused assets showed no sign of abating yesterday as equity indices and base metals suffered further losses as the World Bank’s recent downgrade of its global growth forecasts continued to weigh on sentiment. Adding to the unease were unexpectedly weak retail sales data from the poster child of the economic recovery which only served to fuel concerns of waning global growth prospects. US retail sales fell 0.9% in December to record their biggest decline in almost a year and challenged hopes that lower energy prices would bolster consumer spending levels.

The downbeat mood was mirrored across the eurozone where Mario Draghi revealed that the current risk of deflation faced by the currency-bloc was higher than that of a year ago. These comments were supported by yet more worrying inflation data which showed consumer price growth in France fell to its lowest in six years last month. However, those hoping that the ECB will soon undertake a programme of government-debt purchases to fight off deflationary pressures were buoyed by a favourable ruling from the European Court of Justice which deemed that such actions would be legal.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.