Market Update – 9th February 2022.

Looking at the intraday performance of the FTSE 100, the index hit a post-pandemic high this week on the news of BP profits hitting an eight-year high after oil and gas prices surged last year.

Whilst the FTSE 100 slumped slightly lower by the end of the day, it has been one of the strongest global equity markets year to date, reflecting the strong presence of sectors within the index which can be described as value – banks, oil and gas, miners…

Turning to the Eurozone, the European Central Bank (ECB) chose not to alter monetary stimulus in their first meeting of 2022 last week, but gave a narrative suggesting that policy could potentially tighten. Following this, markets rushed to price in a hawkish stance. However, on Monday this week the President of the ECB spoke, revealing a more cautious narrative.

Christine Lagarde allayed fears of dramatic interest rate increases and entrenched inflation, as the ECB believe that Eurozone inflation is set to fall back, and stabilise around their 2% target.

Additionally, she highlighted that they will be accommodative in their use of monetary policy, bolstering our sentiment that interest rate rises will be measured, gradual and data dependent.

Data to look out for this week includes UK GDP, UK industrial production, US CPI and the University of Michigan consumer sentiment index.

Hannah Owen, Portfolio Specialist