Global equities have continued to decline as shown in the EMI Global Equity Index table below. The Index is now down by 1.9% on the week with the year to date gain now just 2%. There are now three bourses in negative territory for the year China, Canada and Brazil with Germany still holding onto sizeable gains for the year. At the moment it appears that the reality traders are outlasting the perception traders as global equity markets have been on the defensive for over a week in spite of the talk of more easing from the US Fed and the prospects for a new bold solution by the ECB. Global Equity markets have been a negative price driver for oil and the broader commodity complex over the last week or so.
Thursday the markets will hear from ECB President Draghi about what his new bond buying program will look like. That said details of the plan could be sketchy after Thursday's meeting as the ECB awaits the Sept. 12 court ruling in Germany about the program. As such the market could be disappointed if Draghi simply restates what he said after the last meeting.
This week's oil inventory reports will be released one day late due to the US holiday on Monday The API inventory report will be released late Wednesday afternoon with the more widely followed EIA data hitting the media airwaves at 11 AM EST on Thursday. This week's inventory report will be impacted and reflective of the lost production of both crude oil and refined products. This week's oil inventory report could likely be a primary price catalyst especially if the actual outcome shows a large decline as projected due to Hurricane Isaac in the Gulf of Mexico. This will be a reminder report that even a hurricane that results in only preemptive shut downs will still have a significant impact on supply and thus inventory levels.