Amadeus Weekly 2022 W6

Fabian Scheler

February 12, 2022

Once a week we summarize the most important market developments and macroeconomic events in a brief chartbook.

2 Minute Read

Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It's called the graph.

Inflation and monetary policy made headlines again this week as US CPI’s came in higher than expected, printing an increase of 7.5% y/y. As a result, markets are now pricing in seven rate hikes over the next 12 months.
While the rise in short term rates attracted a lot of attention this week, long-term interest rates and inflation expectations as indicated by 30Yr Treasury Bonds remain well-anchored.
Markets still don’t seem to believe in permanently higher inflation but rather prepare for a policy error.
The S&P 500 retraced by 1.8% this week, but European and Asian markets ended the week higher.
The style and sector rotations in equities continued this week with Defensives underperforming Cyclicals and Quality and Momentum losing against Value.