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Weekly Market Wrap 21/01/2022

There was a marked decline in the value of pandemic driven stocks this week as countries globally looked to relax Covid-19 restrictions. Netflix and Peloton notably posted disappointing results. Inflation continued to be an issue worldwide, pushing some major policymakers to tighten monetary policy at faster rates. In Geopolitics, top US and Russian diplomats met in Geneva amid concerns that Russia is preparing to invade Ukraine.

US Market 

The S&P 500 is down 4.46% to 4,449.5. The index closed below the 100-day moving average on Thursday after a dead cat bounce, which has been a notable buy-the-dip opportunity in recent months. However, the bearish trend has continued into today’s session as the index goes deeper into the correction territory, propelled by disappointing earnings from the likes of Netflix, as lockdown-driven revenue streams may slow.

UK Market 

The FTSE 100 ended the week down 0.94% at 7,472, with the index experiencing its first losing week of 2022. The FTSE fell more than 1% on Friday as global stocks fell on continued worries around central bank policy changes, with further negative sentiment coming from poor UK retail sales data released on Friday, showing retail spending had fallen far more than expected in December 2021. On Wednesday, data showed that inflation in the UK had reached 5.4% in December 2021, the highest rate seen since 1992, increasing the possibility that the Bank of England will increase interest rates for a second time since the pandemic at their meeting in February.

European Markets                                                                    

The Euro Stoxx 50 fell 1.63% this week to 4,202, whilst the CAC 40 dropped 1.54% and the DAX lost 2.34%. European markets were dragged lower on Friday as investors look ahead to next week’s meeting of the US Federal Reserve. On Thursday it was shown that Euro Zone consumer prices rose 5% YoY in December 2021, mainly driven by increasing energy and food prices.  It remains to be seen whether high inflation measures will persist, or they will fall below 2%, as the European Central Bank predicts.

Fixed Income

Some weakness in the US 10-Year Treasury yield, which has fallen 0.05 percentage points to 1.742%, as investors try to decode the direction of monetary policy combined with the effects of the developments in the Covid-19 pandemic on the overall economy.


WTI Crude continues its bullish trend with a 0.35% to 84.11, as we see a pattern of drawdowns in Cushing, Oklahoma.

Gold continues to rise 1.1% to 1,836, as appear to have a breakout in the price of the precious metals on the back of a weaker dollar and lower yields.

The Week Ahead  

Monday – PMIs for Japan, EU, US, France, UK, Germany & US

Tuesday – Australia CPI; Germany Business Climate

Wednesday – BoC Rate Decision; FOMC; NZ CPI

Thursday – US Durable Goods Orders; US GDP; US Initial Jobless Claims; Nondefense Capital Goods Orders ex Aircrafts; US Personal Consumption Expenditure Prices

Friday – Germany GDP; EU Consumer Confidence, Business Climate

*Price changes as of last week’s close unless stated otherwise.