Uncertainties surround financial markets at every turn. Whether from the Ukraine crisis, a slowdown in China or more aggressive central bank policy. And as inflation soars and growth slows, the risk of contagion is rising.
As the year began, the world’s economies had a plan: normalise policy, head off inflation and allow growth to continue to recover. Then came the dual shock of war in Ukraine and soaring food and energy prices.
Safe havens saw sustained buying interest, as commodity prices were pushed higher by Russia’s action in Ukraine. The ECB meeting this week could change policy expectations, in the light of events on Europe’s eastern borders.
The Russian invasion of Ukraine caused volatility to spike to two year highs in risk markets, while safe haven assets such as gold and US Treasury bonds were in demand. This week the impact of global sanctions on Russia will be closely monitored, while on the macro front we expect a further strong advance in US non-farm payroll data.
As tensions remained high on the Ukrainian border, equity markets fell for a second consecutive week, while government bonds and the oil price steadied somewhat. This week brings CPI inflation data from Europe, as well as the Federal Reserve’s preferred target PCE inflation data in the US.
Market volatility has returned, driven by swiftly rising inflation and sharply tighter central bank outlooks. Have we have passed the point of no return for a Goldilocks outlook for 2022, with major economies ‘not too hot and not too cold’ by year end?
Markets were volatile once again, as uncertainty over the pace of interest rate rises combined with earnings shocks from the US tech sector. This week brings CPI inflation data from the US, as well as earnings reports from major consumer goods companies.
Equity markets were rattled, as forecasts climbed to five Fed rate hikes for this year, before rallying on Friday. This week will culminate in US unemployment data, with no change expected from December’s 3.9%.
Markets experienced growing volatility on fears of rising interest rates, as the Nasdaq briefly hit correction territory. This week’s Federal Reserve meeting will be closely analysed for clues as to monetary policy for this year.
Equity markets took fright at the more hawkish tone of the US Federal Reserve’s December minutes. Bond yields rose, and prices fell, in anticipation of a faster pace of interest rate hikes. This week the focus will switch to inflation data from the world’s major economies.
Equity markets hit new peaks, despite strong inflation data in the US and China, as expert opinion provided reassurance on the Omicron variant. This week central bank meetings will be in focus and the US Federal Reserve’s press conference will be closely analysed for a change in rhetoric on interest rate policy.
Equity markets were rattled by fears of lower growth and ever higher prices, due to the new Omicron variant of Covid-19, while government bond markets proved a safe haven. This week all eyes will be on US CPI inflation data, as well as developments in the spread of the Omicron variant.
Financial markets were rocked by reports of the new Omicron variant of Covid-19, with the oil price under particular pressure, and safe haven assets much in demand. In the week ahead, markets will look for further clarity on the Omicron variant, as well as stable PMIs and US unemployment data for November.
Developed market equities advanced, boosted by strong earnings and some speculation of rising interest rates, while emerging markets hit a bumpy patch. This week brings Flash PMI data from across the globe, which could show widespread declines in the Services sector reading, despite strong Manufacturing indicators.
Headlines were dominated by sharp jumps in inflation around the world, as well as the COP26 climate change summit, where an agreement was reached on limiting greenhouse gas emissions. This week President Biden’s Infrastructure bill will be signed into law and further data releases could indicate persistent inflationary pressures.
Financial markets were in a buoyant mood, as the US Federal Reserve confirmed tapering of its pandemic-era stimulus, with immediate effect. Pledges from world leaders at the UN Climate Change Conference, or COP26, covered deforestation, as well as methane and coal production.
US equity markets hit new highs, as Q3 earnings reports beat estimates and Microsoft regained the title of world’s biggest public company. This week could bring an announcement on tapering from the US Federal Reserve, an interest rate hike from the Bank of England and a raft of macroeconomic data for October.