International uncertainty to the fore

Brent oil prices fell this week to their lowest level in 12 years, having plummeted 42% in the last three months. The drop from US$37/bl to US$30/bl since the new year has coincided with renewed concerns about the Chinese economy, with the Shanghai stock market declining 7% (and trading thus being suspended for the day) on Monday and Thursday last week. North Korea’s announcement that it had successfully detonated a hydrogen bomb also added to financial market unrest and helped push the VIX index (a measure of market volatility for the S&P 500) up to its highest level since September 2015.