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US oil stocks in relentless climb

Published Thursday, October 8th, 2015

The equity-friendly backdrop provided by waning global growth prospects and subsequent expectations of accommodative monetary policy were yet again at work yesterday as risk assets uncoupled themselves from a fall in oil prices to eke out modest gains. Fears of a slowdown in the eurozone’s engine economy remained at the fore and were stoked by figures revealing that German industrial output shrank by 1.2% in August. This followed on from soft industrial output and orders data released earlier in the week. German growth prospects as well as those for the wider bloc have been dealt a fresh blow this morning after trade data highlighted at 5.2% month-on-month slump in German exports during August in what was the steepest fall since early 2009.

Adding to the cautionary outlook was the IMF’s update on global financial stability which came hot on the heels of its latest downgrades to 2015 global growth projections. It once again warned of the downside risks facing emerging-market economies with dangers ranging from low commodity prices and looming US policy tightening to the potential of a liquidity crisis and the fallout from mounting debt piles. There was a special mention for oil-producing countries which have seen a deterioration in their public finances and ballooning budget deficits as a result of the slump in oil prices. Meanwhile, the OECD did its best to contribute to the downbeat mood by hinting that it will follow the IMF’s lead in trimming original growth predictions for this year and the next come next month.

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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.