Hawkish mood ahead of uncertain holiday season

Central banks of advanced economies turned increasingly hawkish this week despite the spreading of the highly contagious Omicron variant. The US Federal Reserve accelerated the pace of tapering and suggested three rate hikes in 2022. The BoE became the first major central bank to raise interest rates since the start of the pandemic, while Norway’s central bank hiked its benchmark rate for the second time this year, both expecting more rate hikes next year. Yet, a number of central banks kept a rather dovish stance: the ECB will end its pandemic net purchases but will continue providing support, the Swiss National Bank has stuck to its loose policy, while the Australian central bank confirmed no rate hikes in 2022 and the Bank of Japan maintained ultra-loose policy, even though both were open to end or taper their pandemic-funding. Our next issue of the Weekly Market will be on January 7, 2022, until then we wish you a very good holiday season