The equity markets kicked off the new year on a high note by breaking historic January performance records. The S&P500 gained +6.18% over the month, while the STOXX Europe 600 rose by +6.71%. Inflation statistics and monetary policy continue to be very closely watched. It is worthwhile noting those shunned stocks and sectors from last year, have been the biggest winners so far this year.

The bond market rallied as well since central banks (Federal Reserve, European Central Bank) have signaled the degree of future rate hikes will be less restrictive (+25 basis points as opposed to earlier expectations of +50 bps). The 10-year US bond yield thus returned to the 3.50% level, while the French OAT and the German Bund have fallen back below 3% and 2.50% respectively.

In the foreign exchange market, the dollar index (USD against a basket of international currencies) fell slightly below 103 points, which can be seen as a support level.

Regarding commodities, WTI oil managed to close above the major support zone of $77 for the third month in a row. The reopening of China (end of zero-Covid policy) currently appears to hold more importance in investor sentiment versus a possible global recession.