It's been a shaky start to the European session on Thursday, despite the data from the UK and the euro area in the morning being broadly positive.
Further declines in oil were also weighing on the equity markets earlier, with oil & gas companies among the worst performers and dragging on the indices. Both WTI and Brent crude do appear to be topping out, following what has been an impressive rally over the last month and a half. A move below $37.70 in WTI and $38.30 in Brent could signal further losses ahead.
It's also worth remembering that this is the final trading day of the quarter, which can affect trading and may be partially behind the broad-based declines in the equity markets. Not to mention that indices in Europe are trading near the highest levels this year, which may be prompting some profit-taking. The FTSE and DAX, for example, are both trading around levels that have provided repeated resistance throughout March, which could be contributing to today's losses.
On top of all this, we're also headed into the business end of the week, with the U.S. jobs report being released tomorrow as well as some data and speeches from Fed officials today. The jobs report can often prompt some risk aversion in the lead-up to the release because of the significance of the data, although it will be interesting to see how the markets respond tomorrow, given Janet Yellen's quite dovish comments on Tuesday, which cast doubt on whether we'll see another rate hike before the latter part of the year.
Today, though, we've got weekly jobless claims to come from the U.S. as well as more comments from Fed officials, with William Dudley and Charles Evans both due to speak. Given the contradictory nature of the comments from Fed officials lately, I doubt either will manage to provide much additional clarity on the expected course of action for the Fed in the coming months, although it will be interesting to see how each sees the current situation.
For a look at all of today's economic events, check out our economic calendar.