- Investors bet that the Federal Reserve's faster-than-expected policy tightening will still create possibilities for equities gains, as a selloff in US market-index futures calmed, and European stocks cut their losses. Treasury rates have continued to rise.
- Nasdaq 100 index futures were little changed after falling as much as 0.9%, while the S&P 500 futures were slightly higher. The Stoxx 600 index in Europe was able to contain losses thanks to advances by banks and automakers. Government bond yields increased from Japan to Germany and the United Kingdom. The 10-year US Treasury note rate increased by three basis points. The dollar lost some of its previous gains, as the yen benefited from a haven bid.
- Officials' desire for a quicker rate rise path and a shrinkage of the bank's $8.8 trillion balance sheet was revealed in notes from the Fed's December meeting. That might put an end to the exceptional policy accommodation that kept asset prices afloat during the worst of the pandemic.
- The Fed has reached the center of the investment outlook for 2022, overshadowing other current concerns of slowing worldwide growth, China's regulatory crackdown, and supply constraints.
- According to a BoE poll, UK businesses expect to hike prices by 5% over the next year.
- In the three months to December 2022, UK firms expect year-ahead production price inflation to be 4.5%, up from 4.2% in November, according to a Bank of England survey.
- Goldman Sachs' Currie: Over the next six months, the oil market might become very tight.
- Money markets have brought ECB rate rise bets ahead, currently pricing a 10 basis point hike in October and 15 basis point tightening by December.
