After closing at 5483.7, its lowest level in more than a week, the UK blue chip index looks set to mimic losses in the Wall Street and Asian markets today with news from the EU summit coming out as disappointing.

Data released yesterday showed China’s annual inflation rate dropped to 4.2 per cent in November, the shortest level in more than a year, which heightened expectations of more monetary policy easing to fight the worsening global economic issues. Not only this but a much steeper drop in producer inflation to 2.7 per cent in November, down from October’s 5.0 per cent, showed the Chinese economy hastily losing speed.

Today’s domestic data releases from the UK come in the form of British wholesale inflation which is being released at 0930 GMT with British trade figures at the same time. From across the Atlantic, US international trade numbers are being put out at 1330 GMT and the preliminary December Reuters/University of Michigan consumer confidence survey is released at 1455 GMT.

Despite hopes that European Union leaders would make some progress at the summit yesterday, we were left disappointed as they failed to all agree on a resolution.  Interest rates were also cut by 25 basis points to 1 percent, which could be said that it was priced in already.  The overall effect on the euro was a negative one and it shed around 75 points against the dollar.  This morning the pair are trading around 1.3325 and trending down along a bearish trend line.  We see support at 1.33167 and resistance at 1.3370.

Investors were shedding their stock and gold positions yesterday as the days favourite was the US dollar. The cause of this action was the speech from ECB president Mario Draghi, who said that the unlimited buying of government bonds was not an option, and that there were choppy waters ahead for the single currency. Investors will be watching closely day 2 of the EU leaders meeting today, and already this morning David Cameron has announced his rejection of the new EU treaty. So after losing 33.5 dollars yesterday to close at 1708.1, early bird traders have not decided their reaction to the news from the UK prime minister and the yellow brick is trading at 1709.4.

With equity markets plummeting, the energy sector was struggling to find support, and this led to a steep drop in crude prices. Even news that US initial jobless claims were at their lowest level in 9 months couldn’t hold the price of black gold up. And at time of writing, the sell-off hasn’t ended with brent crude trading down at 107.68.