Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It's called the graph.

Quick recap

• Statements by Powell indicating support for a 50bp hike in May to tackle soaring inflation rates triggered a bear flattening of the curve and sent the USD higher.
• While the ECB has not yet committed to rate hikes this year but comments by Martin Kazak this week didn’t rule out a first increase in rates in July, and markets are now pricing in three hikes in 2022.
• Expectations of a slightly more hawkish ECB stopped the decline of the EUR towards the end of this week and sent benchmark yields higher across the curve while gold declined.
• Credit spreads widened this week, and equity markets are increasingly expressing concerns that China’s stubborn Zero-Covid policy and the war in Ukraine are ultimately leading to stagflation with supply-driven inflation pressures and rising interest rates.

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