Stocks all over the world retreated as investors awaited signals from the European Central Bank’s asset purchase program. The European Central Bank’s President Mario Draghi is committed to start purchasing assets this month in an attempt to contain the slowdown in the Eurozone’s economy. Financial markets expect initial purchases of asset-backed securities and covered bonds to be small in size.

Euro-area factories have reduced prices the most this year and manufacturing in Germany fell. Data on US manufacturing also retreated following a period on strong growth. Headwinds appear to be mounting on already fragile economies and markets are starting to reflect the reality; Russia is risking further escalation of sanctions as a cease-fire in Ukraine is appearing increasingly fragile, Hong Kong’s pro-democracy protest continue to increase on a daily basis and the first Ebola case in the US has stirred travel fears.


In the US, the Standard & Poor’s 500 declined 1.32% to its lowest level since mid-August. Transport and airlines retreated the most after the first reported case of Ebola virus on US soil. The Russell 2000 Index which follows small cap US companies moved into correction territory. US Treasuries rallied as the US Federal Reserve maintained its commitment to end bond-buying by the end of October.


Asian markets fell as shares in Tokyo experienced their biggest drop in almost seven months. Japan’s Topix index plunged 2.9% following a rebound of the US dollar. Meanwhile student in Hong Kong continued to mount pressure on authorities by issuing a deadline for Chief Executive Leung Chun-Ying to resign. The deadline is set for today.


European stocks fell this morning extending a negative streak and moving to their lowest levels in five weeks. Investors are awaiting the outcome of the European Central Bank’s policy review and as Italy cut its economic growth forecast. The ECB is seeking ways to fight deflation and assist in reviving a stale economy. While the ECB is expected to maintain interest rates at current low levels, indications of the extent of an asset purchase program is expected to move markets. Policy makers are meeting in Italy and will announce their decisions at 13.45 this evening. Mario Draghi will answer questions 45 minutes later.


US oil imports are expected to increase as the price of West Texas Intermediate hit $91. The price of oil has dropped as Libyan crude exports were restored while Chinese demand has slowed down.

Gold extended an advance from a nine-year low as the US dollar retreated and risk in equity markets increased. Gold is showing signs of stability at $1,200 although price movements are currently highly correlated with the US dollar.