Risk-reward is looking favourable for investors as absolute yields have risen considerably over the past six months and now give a reasonable safety cushion to absorb mark to market volatility Year 2022 is proving to be yet another year dominated by unprecedented events causing heightened volatility across global financial markets. While the year started on a positive note with many countries moving out of Covid-led disruptions, it was soon eclipsed by un-anticipated Russia-Ukraine conflict leading to a significant surge in global commodity prices and multi-decade high inflationary pressures in many developed countries Central bank US Fed has embarked upon aggressive monetary policy tightening led by steep policy rate hikes and quantitative tightening to tame inflation, thereby triggering massive dollar rally and forcing many other so-called safe haven currencies to go into tailspin Other key central banks are also undertaking fast paced rate hikes to control domestic inflation/currency. Consequently, global interest rates have remained extremely volatile during the year with an upward bias as market participants have struggled to gauge the inflation trajectory.
India has also seen a paradigm shift in interest rates during the year. RBI has already undertaken 190 basis point rate hike in policy repo rate and has withdrawn systemic liquidity to a great extent in response to the elevated inflation trajectory. Debt investors have been adversely impacted with high mark to market hit as domestic interest rates have hardened sharply during the year with a flattening bias.
The U.S. dollar edged lower in early European trade Wednesday, handing back some of the previous session’s gains as traders Read more
Most Asian stock markets sank on Wednesday tracking overnight losses on Wall Street, with technology-heavy indexes losing the most as Read more
Most Asian stocks kept to a tight range on Monday as markets awaited more cues on monetary policy from a Read more
Australia's central bank on Friday revised up its forecasts for core inflation and wages growth and warned of further increases Read more
