We now have a new Covid variant that’s ‘very’ different from the ones we knew so far, a rising inflation, and a market bubble. 

So inevitably, the market mood is souring, as investors don’t know whether the equities could survive to another economic hit with less support from the central banks, as central banks would have to deal with a dual fight that’s intensifying on both fronts: inflation is rising, and Covid news are getting worrisome. The problem is that they can’t use the same tools to fight back inflation and the economic slowdown. And the choice will be difficult. 

We are having a rough day in Europe, but the US futures are also falling at a decent speed.

The only encouraging news is the easing oil prices, which could tame the inflationary pressures and give more time to the central banks before pulling back support. 

This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

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