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Below are Views On Daily Global Market Update 14 January 2022 By Asheesh Chanda, Kristal.AI

“Tech lower again

Equities were mixed globally - after seeing small gains in Asia and Europe, there was a significant move lower in the US. The decline was top heavy as the Tech sector (about 40% of the SPX market cap) lost over 2.5% on the day - the index was down 1.4%. Consumer discretionary names had a tough outing too, falling 2%. Price action was defensive across the board with Utilities the top performer at 0.5%. The sentiment spilled over into other asset classes as well - Treasuries rose, and so did credit spreads. The US dollar continued to trade soft with FX vol mixed. Crude dipped on the day and Crypto was sideways.

The new Fed Vice Chair, Lael Brainard explicitly stated March as a possible timeline for the first 25 bp hike to come through in her Senate confirmation hearing. Inflation breakevens fell on the day though, despite data from the prior session indicating Dec inflation numbers at decade high levels. Natural gas also declined on the day - odd considering Russia's deputy foreign minister said that the talks with US and NATO were a dead end and they were discussing only 'secondary' issues. US Secretary of State Anthony Blinken also stated that Ukraine not being allowed to join NATO was simply not an option. We could see volatility pick up here in the coming days and weeks should Russia launch a military offensive.

US weekly unemployment numbers were mixed - initial claims were higher than expected but continuing claims fell more than expectations. Regardless, the downtrend here seems intact and the labor situation in the US is very unlikely to change the Fed's hawkish stance. Morgan Stanley's investor survey came up with Financials as the sector expected to gain the most in 2022 with 58% of the respondents also favoring Europe over the US at current levels. Good timing there as banks start reporting on their Q4 numbers today. Also ahead, we have key data in the UK and retail sales in the US. The Bank of Korea held rates at 1.25% this morning as expected.”

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