Continued slide in oil sets the market tone

The risk-off tone continues to permeate financial markets, as can be seen across Asia this morning. Markets in the region moved deeper into bear territory, taking their lead from Wall Street after US oil prices fell back below $30.

West Texas Intermediate, the US oil benchmark, was off 0.6 per cent at $29.69 a barrel while Brent crude, the international benchmark, was down 0.6 per cent at $32.53.

The global mood is likely to become increasingly jittery as Friday’s all-important non-farm payrolls report nears.

The private ADP report on US payrolls is due later on Wednesday and a number above 200,000 new jobs would likely encourage investors to believe the Federal Reserve will in fact be able to raise rates at its next meeting in March.

The dollar was trading at Y119.54, having reached Y121.14 on Friday after the Bank of Japan’s unexpected move last Friday by introducing negative interest rates. Last month, the dollar hit a one-year low of Y116.94.

Later today, investors will look to a series of service sector indices for January that are expected to show steady readings.

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