Market Insights: Weekly Update (21 March 2022 – 27 March 2022)

28 March 2022

Singapore reopening, the Russia-Ukraine conflict, 50 points of Fed and President Biden in Europe, these are some of the recent changes and events you may have missed out.

Equities staged a modest rally last week with investor risk appetite returning as markets have continued to digest the situation in Ukraine along with the Fed raising the benchmark interest rate. The S&P 500 went up 2% while the MSCI World index rose 1.28%. MoneyOwl’s 100% equity portfolio recorded gains of 0.93%.

The 10-year bond yield jumped to 2.49% on Friday, up from 2.15% in the previous week, and just 1.51% at the end of 2021. The acceleration in global bond yields were mostly caused by accelerating inflation and global central banks signalling their intent to increase interest rates. When bond yields increase, bonds prices fall correspondingly. The Bloomberg Barclays Global Agg Bond Index was down 1.63% by end of the week.

Singapore Reopening

Singapore significantly eased coronavirus restrictions in a decisive shift towards “living with COVID.” In contrast, Hong Kong is still sticking with a “dynamic zero” COVID strategy that seeks to quash case counts, even though the policy didn’t prevent a widespread outbreak this year.

Some of Singapore’s major pandemic policy changes include making outdoor mask-wearing optional (yay!) and doubling the group gathering size limit to 10 from March 29. It will also allow fully vaccinated travellers and unvaccinated children to enter the country without quarantine from April 1. PM Lee Hsien Loong announced these changes last Thursday, hailing a “major turning point” in the pandemic fight.

Russia-Ukraine Conflict

Heavy fighting continued north of Kyiv, and Ukrainian officials rejected a Russian demand that their forces in Mariupol surrender. The European Union and the US have been coordinating closely to reinforce the U.S. warning to China against helping Russia in any form to cushion the blow of sanctions against Russia or to provide Moscow with military support.

50 Points of Fed

Federal Reserve Chair Jerome Powell said on last Monday that the central bank is prepared to raise interest rates by 50 basis points at its next meeting in May if needed. The speech signifies the Federal Reserve’s willingness to fight against decade-high inflation sparked some volatility in bond yields and was responsible for most of the week’s rise in treasury yields.

President Biden in Europe

U.S. President Joe Biden sought to rally U.S. allies around harder-hitting sanctions on Russia. President Biden had back-to-back summits on Thursday with NATO, the Group of Seven and the European Union in Brussels with the announcement of new Russia sanctions and energy aid for Europe. The U.S. President also called for Russia’s removal from the G-20 group of major economies. Germany and Hungary, meanwhile, sought to put the brakes on a potential Russian oil embargo.

Read more Market Insights here.

Disclaimer: While every reasonable care is taken to ensure the accuracy of the information provided, no responsibility can be accepted for any loss or inconvenience caused by any error or omission. The information and opinions expressed herein are made in good faith and are based on sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. Expressions of opinions or estimates should neither be relied upon nor used in any way as an indication of the future performance of any financial products, as prices of assets and currencies may go down as well as up and past performance should not be taken as an indication of future performance. The author and publisher shall have no liability for any loss or expense whatsoever relating to investment decisions made by the reader.

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