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US refinery maintenance dents crude oil demand

Published Thursday, October 15th, 2015

Renewed concerns surrounding global deflationary pressures and a batch of disappointing US economic reports ensured that global equities indices continued this week’s poor run of form to end the session in the red. As has been the case recently, China got proceedings off to a sour note after its annual inflation rate was seen dipping to +1.6% in September from 2% in August while producer prices shrank for a 43rd straight month. The soft inflation outlook was somewhat mirrored in the eurozone with French consumer prices failing to pick up and Spain’s economy still marred by negative price growth. Neither was the US spared from the prospect of soft price growth as producer prices recorded their biggest fall since the start of the year in September of -0.5%.

Adding to the downbeat mood was a key gauge of US consumer spending which underwhelmed after retail sales inched 0.1% higher in September compared with the previous month, dashing expectations of a +0.2% rise. More worryingly was the 0.1% dip in core-retail sales which along with the spectre of stagnating inflation have pushed back the likely timing of a US rate lift-off to early next year. With risk appetite already on the back foot, investor sentiment was dealt a further blow from poorly-received US corporate results and a 10% slump in Wal-Mart shares following weak profit projections which led Wall St lower. Bulls will now be hoping for a swift return to the ‘bad news is good’ outlook that had previously sent risk assets to multi-month highs.

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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.