Markets took a breather this week, which come from the realisation that economies are slowing down, which should in turn help tame inflation and take the pressure of central banks applying the brakes too aggressively. Of course, there is still a lot of uncertainty around how much economies will slow down, the impact this would have on inflation and what central banks will do.

A week driven by interest rates. Interest rate rises are the way central banks try to control inflation, not just by taking the foot off the pedal of the economy, but by indeed applying the brakes. Investors are worried about how forcefully these brakes are applied and the impact this could have on its economies.

High inflation, and interest rate expectations, remains very much at the forefront of investors around the world. In Asia we saw some promising news – in Japan, the economy appears to be in slightly better shape than many expected, and in China, there are signs that the government is looking to be more supportive of its economy. Meanwhile central banks in the West continue to face the pressures of high inflation.

It was a mixed week for markets across the world. Investors in the UK, US and Europe continue to worry about inflation, slowing growth and the impact that rising interest rates could have on these economies. Meanwhile, some relaxation in restrictions in China and Japan gave Japanese and Chinese stock markets a boost during the week. 

Markets took a bit of a breather from the negative moves in the last few weeks, despite the ongoing uncertain outlook of slowing economic growth, rising inflation, and aggressive interest rate hikes from central banks. There are increasingly signs that inflation is beginning to peak which may in turn take the pressure of central banks to raise interest rates too aggressively.

In another volatile week in markets, the focus remains on how central banks plan on taming inflation and the impact this could have as economic growth around the world continues to slow down. Inflation appears to be having an impact on consumer confidence and therefore consumer spending. Central banks remain focussed on taming inflation, with the European Central Bank set to raise interest rates for this first time since the pandemic in the coming months.  Meanwhile in China, the central bank takes action to support its weakening property market.

In this interview special podcast, host Rohit Vaswani, Client Portfolio Manager is joined by Colin Gellatly, Deputy Chief Investment Officer at Omnis Investments, to discuss what's been going on in markets since the start of 2022 and what can we expect moving forwards. 

In another volatile week in markets, the focus remains on how central banks plan on taming inflation and the impact this could have as economic growth around the world continues to slow. Last week, both the US and UK central banks raised its interest rates. China’s zero-tolerance to Covid shows signs of impact on the Chinese economy, and the associated supply chain disruptions are having repercussions globally. 

It continues to be a somewhat uncertain time for markets as fears over higher inflation and Russia’s invasion of Ukraine dominate, whilst at the same time much of the world continues to transition towards slowly learning to live with COVID-19. 

Conflict in Ukraine continues to dominate the headlines. Financial markets remain exceptionally sensitive to any hints of diplomatic progress, with sentiment shifting by the hour. Meanwhile, investors must keep a weather eye on the interplay between economic growth, inflation and interest rates.  

It was generally a positive week in markets across the world, but it is obvious that risks remain across particularly with the ongoing conflict in Ukraine, rising inflation and the prospect of central banks raising interest rates aggressively. Russia’s stock markets partially reopened in a shortened and volatile trading session on Thursday, as the country’s invasion of Ukraine reached the one-month mark.

It was generally a positive week in markets across the world – with China the only major market to register losses, though we did see a turnaround later in the week. This week is a clear example of what we mean when we talk about volatility – volatility means you can get big swings either way in markets. Last week Omnis published a video that looks at why it’s important to stay calm when markets become volatile. You can watch this video here.  

 Events in Ukraine continued to dominate headlines, demanding attention from all, investors included. From a market perspective, Europe’s decision not to follow the US in embargoing Russian oil and gas was critical to developments over the week, as it has removed some of the worst scenarios for European the economic growth outlook.

On yet another volatile week, markets across the world were sent tumbling down as Russia’s attacks on Ukraine continue. European and UK stocks were the worst impacted during the week. The West continues to take further action against Russia, whilst Ukraine and Russia continue to negotiate.

Please bear in mind that this update was written on 6 March 2022 and was correct at the time of publishing.

On Thursday, Ukraine woke up to explosions as peace in Europe was shattered. After Russia spent several weeks building up a sizable military force along its border with Ukraine, Russian President Vladimir Putin ordered its military to invade Ukraine. NATO said, "We now have war in Europe on a scale and of a type we thought belonged to history." The situation in Ukraine and the impact on markets around the world is changing all the time. Please bear in mind that this update was recorded on 27 February 2022 and was correct at the time of publishing.

The situation in and around Ukraine is deeply political and highly complex and it remains far from obvious how events will unfold. Meanwhile, the consensus outlook for inflation, economic growth and interest rates continues to shift, adding to the uncertainty. For investors, uncertainty means volatility – as evidenced by the ups and downs of major market indices over the past week.

Markets continue to be volatile and continue to be dominated by expectations of what central banks will do throughout 2022. This week we also saw a lot of share prices move because of either positive or negative reports from companies. Oil prices continue to rise which has benefitted some energy companies. It would be fair to say that markets will continue to be volatile over the coming weeks and months.

Markets continue to be volatile this year, dominated in the short term by the prospect of rising interest rates. Beyond interest rate expectations, many companies are reporting challenges to their businesses, escalating geopolitical tensions around the Ukraine/Russia border, weak economic data from China and rising Covid-19 cases in some parts of the world have also caused markets to jitter.

Inflation remains at the forefront of news, putting additional pressure on central banks to take action, which in turn has impacted investor sentiment. The US stock market suffered a big fall, whilst record inflation numbers in the UK and Europe heavily weighed on markets.

Covid-19, supply-chain challenges, labour markets, policymakers and private spending – these are the five themes we believe will influence markets this year. Read our 2022 Investment Outlook here.

Inflation remains at the forefront of news and investor sentiment. Meanwhile, Japan and China continue to tackle fresh waves of the coronavirus, whilst in Europe and the UK restrictions begin to ease. The UK economy grew to above its pre-pandemic level for the first time, but this was before news of Omicron weighed on economic activity.

Global markets have had an uneven start to the year with the main themes from 2021 continuing into the new year – coronavirus, and specifically Omicron, together with inflation and how central banks may look to react have all had an impact on markets this week and will likely be the case over the coming weeks.

It continues to be a volatile time for markets as the world continues to face growing Covid-19 cases. Central Banks have begun talking about controlling inflation, with the Bank of England raising key interest rates for the first time in more than three years.

There are still many unknowns about Omicron – so how do our investment managers consider these risks when it comes to investing? In this month’s interview special, Rohit Vaswani, Client Portfolio Manager at Omnis Investments speaks to Nabeel Abdoula at Fulcrum Asset Management and investment manager of the Omnis Diversified Returns Fund.