If anything, markets aren't likely to be as excited and wild today compared to yesterday. But we still could get some noteworthy action before the weekend comes along.
There are still some nerves and jitters ongoing as the Russia-Ukraine war is starting to introduce more moving parts to the global economic outlook in the months ahead. Central bank tightening prospects are up in the air but I would say it may not deter policymakers from moving during 1H 2022 but later on, perhaps there is some scope for consideration.
Stagflation risks are real and the bond market is perhaps hinting at that with a further flattening in the Treasury yield curve. 2s-10s are now holding around 36 bps and we're slowly heading towards that "crazy inverted yield curve" moment.
For now, I still continue to like riskies in FX with the aussie and kiwi continuing to hold surprisingly resilient. We'll see how the mood shifts depending on the whole Russia-Ukraine war outcome but if the world stands back to watch without really coming down hard on Russia, unfortunately the only real loser is democracy.
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