Investment Institute
Monthly Market Update

January Global Macro Monthly - Omicron to a Russian Rubicon

  • 26 January 2022 (10 min read)

Key points

  • Omicron cases appear to be peaking in countries exposed early, but it is spreading more broadly. Hospitalisations have been relatively light, but disruption is still likely.
  • Russia-Ukraine border tensions are rising and having a spillover effect in energy and risk asset markets.
  • Inflation rose in several developed jurisdictions in December but should be near peak. Omicron and geopolitics to keep rates elevated over the coming months. Visible disinflation expected after the Spring.
  • Elevated inflation and tight labour markets are resulting in developed market central banks tightening policy sooner than previously expected. We expect the Federal Reserve to tighten policy in March, but the European Central Bank to hold off into 2023.
  • The growth outlook is softer in the short-term reflecting Omicron disruption and an income squeeze. We also lower our US growth outlook on faster policy tightening.

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    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

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    Disclaimer

    This website is published by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W) for general circulation and informational purposes only. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. It has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation or particular needs of any particular person and may be subject to change without notice. Please consult your financial or other professional advisers before making any investment decision.

    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and investors may not get back the amount originally invested.

    Some of the Services and/or products may not be available for offer to retail investors.

    This publication has not been reviewed by the Monetary Authority of Singapore.