BoJ Slashes Rates

The United Kingdom’s preliminary reading of fourth quarter gross domestic product showed expansion of 0.50%, meeting consensus estimates and rising slightly above the final 0.40% expansion reported in the third quarter. The figure from the Office of National Statistics recorded growth in services and agriculture, climbing to 0.70% and 0.60% respectively while construction and industrial production fell by -0.10% and -0.20% during the same period. On an annualized basis, growth moderated to 1.90% from 2.10% while total GDP for 2015 printed at 2.20%, lower than last year’s more moderate growth of 2.90%. The Bank of England is preparing to its own meeting of the Monetary Policy Committee on February 4^th, with renewed expectations that policymakers will opt to adjust forecasts on growth and inflation for the coming years. Upon the release of the GDP figure, the Pound Sterling gained ground over the US dollar, reaching 1.4324.

Oil jumped to prices of over $34.00 a barrel on Thursday, after the Russian Energy Minister Alexander Novak commented that the Saudi’s were willing to discuss the possibility of production cuts in an effort to shore up falling crude oil prices, rumors that were later dismissed by OPEC. Crude oil for March settlement soared on the comments, with West Texas Intermediate jumping to $34.81 while Brent climbed as high as $35.58. However, both Saudi Arabia and OPEC later remarked that these comments on cutting output by 5.00% were unsubstantiated and there was no plans to hold an emergency meeting of OPEC members in February. With oil production feared to rise further with growing Iranian exports and Saudi Arabia not backing down amid softer demand from one of the biggest energy consumers, China, has cast a shadow in many emerging market economies that are oil price dependent.