Market Analysis

Surprising hawkish pivot from the Fed

Most EU benchmarks edged slightly higher on Monday, following the bullish trend sparked in Asia overnight and despite lower volumes than usual due to a bank holiday in Japan. Market volatility continues to grow almost everywhere for the beginning of the new year as lingering uncertainties keep pressure on market sentiment. Investors are still digesting the sooner-than-expected hawkish pivot from the Fed, with the first rate hike now anticipated in the first quarter (March) as well as further rises expected later in the year. The huge hit and impact of the Omicron strain on economies combined with the prospect of withdrawn liquidity from central banks is denting investors’ appetite for riskier assets in the short-term. Traders are likely to wait for new major market drivers before pushing stock prices in new directions. All eyes will remain on monetary policy this week with a new batch of comments from major Fed speakers alongside the crucial US Inflation report on Wednesday.

Source: ActivTrader


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