10 things you need to know before European markets open
Obama and Merkel announced unity and not much else about Ukraine. US President Barack Obama and German Chancellor Angela Merkel declared Monday that Russian aggression in Ukraine has only reinforced the unity of the US and Europe, as they weighed the prospects of reviving an elusive peace plan to end the conflict. But the Western leaders didn't provide Ukraine with any concrete support.
Falling prices in China are pointing to an economic slowdown. China said consumer prices rose just 0.3% in January dragging the year-on-year rate of price growth down from 1.5% to just 0.8%. Chinese PPI year-on-year to January fell 4.3%, when a 3.8% drop was expected. Weak demand equals no price pressure and eventually, even factoring oil's big drops, the spiral of lower prices.
Russian car sales are collapsing. A report from Bloomberg on Monday said car sales in Russia will probably fall 35% this year, according to data from PwC. In an "optimistic forecast," car sales in Russia could fall just 25% in 2015, though with the Russian economy expected to fall into recession this year as Western sanctions, the collapse in oil prices, and the devalued ruble weigh on the Russian economy, the results could be even bleaker.
UBS just approved its biggest dividend since the crisis. UBS in 2014 posted its biggest payout to shareholders since the financial crisis, after the Swiss bank hit capital targets and changed its legal structure, which helped it to hike its dividend. Switzerland's biggest bank said on Tuesday net profit for the fourth quarter of 2014 was 963 million Swiss francs ($1.04 billion).
Citi still thinks oil could drop to $20. Ed Morse, Citi's global head of commodity research, wrote in a note: "It's impossible to call a bottom point... Which could, as a result of oversupply and the economics of storage, fall well below $40 a barrel for WTI, perhaps as low as the $20 range for a while."
UK industrial production is coming. At 9:30 a.m. GMT, the UK's industrial and manufacturing production figures for December will be released. As it stands, production rose only 1.1% in the year to November, and economists are expecting just a 0.7% hike in the year to December.
The US has at least five more years as the world's top oil supply growth hotspot. The United States will remain the world's top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth.
Asian markets are mostly down. Japan's Nikkei closed 0.33% lower, followed down by Hong Kong's Hang Seng, which is 0.14% lower just ahead of the close. The Shanghai Composite Index is up 0.94%.
Microsoft and Samsung ended their patent battle. Microsoft and Samsung have ended their contract dispute over patents, Microsoft said in a statement on Monday. Microsoft sued Samsung last year in a federal court in New York, accusing Samsung of breaching a collaboration agreement by initially refusing to make royalty payments after the US company announced its intention to acquire Nokia's handset business in September 2013.
The US is considering reopening opening legal proceedings against HSBC. HSBC could see its 2012 deferred prosecution deal with US authorities over anti-money laundering lapses reopened as a result of separate, ongoing probes into the bank's alleged role in manipulating currency rates and helping Americans evade taxes, a US law enforcement official said on Monday.