Japan heads into its snap election this Sunday with the economy in a deeper recession than previously thought – but don’t tell voters who will overwhelmingly re-elect Prime Minister Abe; or the stockmarket, which regained the 18,000 point mark yesterday for the first time since the middle of 2007.

Commodity prices – especially oil – remain the big driver of activity and sentiment in financial markets, and a state of glum acceptance that lower oil prices are here to stay for quite a while, is now taking hold among investors.

Markets in Australia this week will be dominated by the reaction to the release yesterday of the Financial System Inquiry by David Murray, along with the November jobs data on Thursday, but for markets here and around the world, the really big news will be the monthly economic data from China.

For all the nervousness in western markets, especially Australia, about oil and other energy shares, the market to increasingly keep a close eye on is China, where the volatility we told you about last week, shows no sign of ending.

New four year lows for the Aussie dollar overnight as the currency’s slow decline continues, much to the relief of the Reserve Bank and despite some reasonable retail sales and trade account figures for October.

Don’t expect the pressure on world oil prices, and therefore on the share prices of a host of companies larger and small, to slacken anytime soon in 2015.

Markets will be watching meetings of the European Central Bank and the Bank of England tonight for further evidence of support, especially the ECB which is said to be poised to open its wallet further and expand its easing program.

The dollar fell, then recovered a little, the stockmarket powered on in its second day of gains and news that the Australian economy grew at a sluggish 0.3% in the September quarter seasonally adjusted, seemed to excite the media and the politicians more than anyone else yesterday.

Once again all the rate cut forecasts from business economists, the media and business for 2014 have been proven incorrect after the Reserve Bank failed to cut rates yet again at its last meeting for 2014.

Australia’s third quarter GDP figures are out later this morning and there’s a good chance they could be better than expected after better than expected contributions from the current account, business stocks, wages and company profits.

Oil, gold, silver and copper bounced overnight, ending the great post OPEC decision commodity sell off, a recovery which will help our market steady today after two days of huge losses.

Local investors had their eyes squarely fixed on the collapse in local shares yesterday, but no doubt one or two gave a glance to the latest data out of China and Japan.

No change in interest rates from today’s Reserve Bank board meeting today, the last for 2014.

Global commodity indexes hit five year lows on Friday night as the impact of the slide in global oil prices sent ripples through global markets.

While central bank meetings will grab the headlines internationally this week, it will be the usual start of month report on the US jobs market on Friday night, our time, along with continuing market reaction to the slump in global oil prices, which will have the greatest impact on markets this week.

Global shares had a mostly positive week helped by mostly good economic data and as the Chinese easing and expectations for more easing in Europe continued to impact.

So what the’s fallout for oil and the oil related sectors around the world from what’s shaping up as the 4th major oil shock since 1973?

The Australian dollar held up, but the local sharemarket is heading for a fall after global oil prices fell to new four year lows this morning in the wake of the decision by OPEC to stick to the oil-producer group’s existing output target of 30 million barrels of oil a day.

Much to the surprise of everyone, business investment was stronger in the September quarter, rising rather than falling.

The head of Russian oil group, Rosneft reckons global oil prices will drop under $US60 a barrel in early 2015 – the way prices are going it could happen before the end of this year – but there will be an awful lot of nervous oil company boards, managements and shareholders hoping that doesn’t happen – especially in the buoyant US shale oil sector.