A litmus test beckons for fragile equity and credit markets on both sides of the Atlantic today as investors brace for a rate hike from the European Central Bank and the latest US monthly jobs data.

“The general milieu is not good at all,” says Alan Ruskin, chief international strategist at RBS Greenwich Capital. “The ECB is set to tighten in the face of weak equity markets and it remains to be seen whether a rate hike knocks sentiment further.”