Asian markets are generally lower as crude oil pares gains. At the time of writing, Nikkei is trading down -360 pts, or -2.2% while Hong Kong HSI is down -120 pts, or -0.6% and China SSE (L:SSE) is mildly lower. That followed DJIA which closed down -40.4 pts or -0.25% and S&P 500 closed down -8.99 pts, -0.47%. WTI crude oil is back at 30.5 after failing to take out 32 handle yesterday. That came after data showed US crude stocks rose 2.1m barrels last week and made another record high at 504.1m barrels. In the currency markets, Japanese Yen regains much ground and is trading generally higher for the week together with Swiss Franc. In particular, EUR/JPY took out 126.09 key near term support, which carries larger bearish implications.
Euro stays weak as ECB January meeting minutes showed that policy makers were concerned of growing risk on growth in and inflation. The minutes noted that "there were stronger signs again that repeated downward revisions of the inflation outlook were feeding through to inflation expectations, which had again increased the probability of the euro area economy remaining in low inflation environment for an extended period of time." Meanwhile, "weaker than anticipated growth in wages, in conjunction with declining inflation expectations, could also signal increased risks of second-round effect." And the minutes also noted that "it would be preferable to act pre-emptively ... rather than wait until after risks have fully materialized.
The Organization for Economic Co-operation and Development lowered 2013 global growth forecast to 3.0%, down from prior projection of 3.3% in November. For US, growth is projected to be 2.0%, down from 2.5%. For UK, growth is projected to be 2.1%, down from 2.4%. For Germany, growth is projected to be 1.3%, down from 1.8%. Nonetheless, growth forecast for China was left unchanged at 6.5%. OECD warned of global risks and that "monetary policy cannot work alone" as it urged that "a stronger collective policy response is needed to strengthen demand".
On the data front, German PPI and UK retail sales will be the focus in European session and UK will also release public sector net borrowing. US will release CPI. Canada will release retail sales and CPI.