Market Update

This week, global equity markets showcased their preference for stability over unpredictability, reacting to each fresh news update about Ukraine.
The volatility was further heightened due to the upcoming long weekend for U.S. financial markets, observing Presidents' Day on Monday (21 February 2022), along with the surge in COVID-19 cases in Hong Kong and concerns over potential interest rate hikes in light of recent inflation data.
On the brighter side, in spite of Ukraine-related tensions, oil prices closed the week slightly lower, hovering near $100 per barrel. This drop is attributed to potential progress in Iran's nuclear deal discussions, hinting at the return of Iranian oil to the market. As we've frequently mentioned, a dip in oil prices can alleviate inflationary pressures and boost economic growth.
The minutes from the Fed's meeting on 26 January 2022 were relatively unsurprising. While the officials discussed reducing the central bank’s balance sheet and hinted at the possibility of more frequent interest rate hikes than the previous cycle, they did not debate initiating the tightening phase with a 0.5% interest rate spike in March, a move recently suggested by James Bullard, the President of the Federal Reserve Bank of St. Louis.
The upcoming week, though shortened for U.S. markets due to the holiday, promises to be eventful. The focus will be on the crucial meeting between U.S. Secretary of State, Antony Blinken, and his Russian counterpart, Sergei Lavrov, which will significantly influence global equity market sentiment.
On the data front, we anticipate releases including PMI figures from the US, UK, and Eurozone; UK consumer confidence data; U.S. durable goods orders; and stats on Japanese industrial production.