According to unofficial theory a 20% decline in a stock index means that it has entered an official bear market and we saw this from the Shanghai Composite overnight following another 3.5% loss. The end of the week in Asia has seen emerging markets record their third weekly loss in a row and the same can be said for some European markets as 2016 so far has been a terrible year for global stock markets. This is now starting to be reflected in profit forecasts for S & P companies across the pond where we’re seeing the most downgrades to earnings compared to upgrades since 2009. Crude prices are also lower overnight but for all the talk about whether oil will fall to $20 or whether it won’t we have to remember that commodities entered their massive bear market by the 20% measure as far back as 2014. This of course has taken its toll on the Aussie, now AUDUSD hovering just above the 0.6900 level which is the major support and if broken we would see fresh multi year lows.
Today the economic calendar is quite thin except for US retail sales and then industrial production data. A greater focus will be put on data going forward into 2016 as concerns increase over the global economy and whilst the US retail sales is not the best indicator for the global picture, it is an important release that the Fed will be monitoring, especially since it is expected to decline to 0.0% from 0.2%.