Week ending 18th February 2022.


Global equity markets like predictability, not uncertainty – and that was evident this week as equity markets were at the mercy of every new news headline about Ukraine.

Unfortunately, this uncertainty and equity market volatility was exacerbated thanks to the long weekend for US financial markets, which are closed on Monday (21 February 2022) for Presidents’ Day, coupled with rising coronavirus cases in Hong Kong and the prospects of higher interest rates due to recent inflation readings.

On a positive note, despite the concerns over Ukraine, oil actually ended the week lower (albeit still close to $100 per barrel) due to signs of progress in talks with Iran on a nuclear deal (which could result in Iranian oil supplies coming back to the market) – and regular readers of our commentaries will know that a lower oil price while help ease the current inflationary pressures and help economic growth.

The release of the minutes from the last Fed meeting (held on 26 January 2022) contained no major surprises:  while policymakers believe it is appropriate to reduce the central bank’s balance sheet and that a sharper trajectory of interest rate increases compared to the previous cycle may be necessary (and which has now been priced-in equity markets), there was thankfully no discussions on kicking-off the tightening cycle in March with a 0.5% interest rate increase (which James Bullard, the President of the Federal Reserve Bank of St. Louis, has been recently advocating).

Looking ahead it’s likely to be another long and tense week, despite it being a holiday shortened week for US markets, with the outcome of the meeting between the US Secretary of State, Antony Blinken and his Russian counterpart Sergei Lavrov being pivotal for global equity market sentiment.

Data-wise we have US, UK & Eurozone PMI; UK consumer confidence; US durable goods orders; and Japanese industrial production.

Investment Management Team