Concern is growing

Quite a sharp downward correction in bond yields (below 1.8% for the US 10-year), but this did not support the equity markets, quite the contrary: the Nasdaq fell by another 1.3%. Bitcoin is trading below $40000 and the price of gold is rising. The fear of inflation is accompanied by a fear of economic slowdown which is reflected in this rise in risk aversion. The dollar is stable, confirming, in our view, that it is unlikely to see much movement in the short term.

A few disappointing US corporate results and economic indicators showing that the impact of the Omicron wave on activity, although short-lived, is nonetheless real, have contributed to this rather negative sentiment in the markets. US jobless claims rose to 286k, the highest in 3 months. This morning, the publication of UK retail sales statistics showed a very sharp decline in December: -3.7% mom. In the US, they were down by 1.9%. This is the result of the Omicron wave, but also of soaring prices, as household confidence plunges in parallel.

There are few key indicators to look forward to today: see you next week with a fuller agenda (PMIs on Monday and the Fed on Wednesday, among others).