World Shares Slip Further Following A Drop In Oil Prices

World shares dipped for only the second time in nine days on Tuesday, sapped by a drop in oil prices and data that showed Britain’s vote to quit the European Union dented German business confidence.

European markets .FTEU3 fell 1 percent in early trading as the slide in oil to back below $57 a barrel sent commodity firms down 1.5 percent .SXPP[O/R][MET/L] and was then compounded by the softer German ZEW institute data.

World Shares Slip Further Following A Drop In Oil Prices
World Shares Slip Further Following A Drop In Oil Prices

Rally fatigue had already set in overnight in Asia. Stocks failed to build on the latest record high for Wall Street while the safe-haven yen JPY=, government bonds DE10YT=TWEB and gold XAU= all made ground.

Murmurings of central bank stimulus remained in the background.The Australian dollar AUD=D4 fell 1 percent to a 11-day low while the New Zealand dollar NZD=D3 hit a three-week trough of $0.7014, as investors ramped up bets that both central banks could cut their interest rates as early as next month.”The aussie and kiwi dollar are providing a bit of interest but the rest of the market is pretty moribund,” said Saxo Bank head of FX strategy John Hardy, adding investors were now waiting on clearer signals on the health of the global economy.

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The IMF is due to update its World Economic Outlook in Washington later and the world’s top finance officials from the 20 top economies (G20) are set to meet in China later this week.Ahead of that meeting the yuan nudged back up higher having been allowed to drop below the psychologically important 6.7 per dollar for the first time in over five years on Monday.Sterling GBP=, one of the biggest FX market movers in recent weeks, barely budged after British inflation rose more than expected in June thanks to a surge in airfares as soccer fans flocked to France for the Euro soccer championships.

That data was collected almost entirely before Britons voted to leave the EU on June 23, a result that caused sterling to plunge and has raised the chances of a spike in inflation.

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Chukwuyem Ogala is a content writer at Edliner. A multifaceted personality with a degree in Economics. He has a strong passion for Rap music and sports. A big fan of the NBA, likes Rafael Nadal and has a crush on Serena Williams. Chuks just strives to be better and wants to be heard globally.

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