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E-MINI S&P (H2): Volatile Start To The Week


TurkGBs Hold Firm Against Broad-Based Risk-Off


Challenging The 50-Day EMA

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  • The discovery of the new variant ‘Omicron’ has increased the uncertainty over central banks’ policy outlook in the coming months as growth expectations are likely to be reviewed significantly to the downside.
  • NBP is meeting next week, and the current environment puts Polish policymakers in a difficult position.
  • On one hand, NBP should continue to hike rate ‘aggressively’ to curb the inflationary pressure as CPI inflation keeps diverging from the 3.5% NBP upper tolerance band (CPI came in at 7.7% in November).
  • On the other hand, raising rates sharply when uncertainty is surging could lead to further deceleration in the economic activity and increases recession risks.
  • The chart below shows how strongly the 2Y10Y traditional yield curve has led the industrial production (proxy for economic activity) by 6 months.

Source: Bloomberg/MNI