Bond yields retreated at the end of last week even though the assumption remains that the Fed will signal a March hike.

Latest flurry ahead of January 25-26 FOMC suggests March rates lift off expected.

US and EU equities rebound overnight with mostly positive Omicron news lifting sentiment while company specific news have also helped the cause.

Commodity market news overnight is a fresh surge in European gas prices

Expect a cautious start to the week with the Netherlands going into lockdown on Sunday

Against the consensus view for an unchanged outcome, the BoE unexpectedly also raised rates by 15bps to 0.25%.

The FOMC delivered a hawkish tilt for Christmas with the Fed dot plot showing three rate hikes in 2022 while also accelerating the taper profile.

US PPI beat expectations fuelling hawkish FOMC expectations

2022 is set to become a year of central banks removing monetary accommodation.

Slight risk aversion to start the week with equities down, yields down and US dollar up

Limited market reactions to ‘as expected’ US CPI – 6.8% headline highest since June 1982

Risk tone deteriorates in front of US CPI tonight, lack of positive new news on Omicron

After a solid run in the previous two days, equities are taking a breather with European shares closing lower amid concerns over the need for a new round of covid restrictions.

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