We heard from a range of central banks last week and the update sparked big moves in the markets, and the bulk of the volatility was in currencies.
All eyes are on the Fed and the central bank is expected to hike interest rates by 0.75%.
Traders are in risk off mode as central banks are in focus this week. The Swedish central bank lifted rates by 100% rates today, and the Federal Reserve and the Bank of England are expected to deliver large rate hikes tomorrow and on Thursday, respectively.
Gold traded at its lowest mark in two years as pressure mounted on the yellow metal.
The markets saw an increase in volatility towards the end of last week as bond yields ticked up, and that indicated the markets are factoring in more large rate hikes from central banks.
Gold is arguably the oldest interment tool in the world, and with that it has a long track record of being a safe haven asset, whereby if uncertainty descends upon the markets, funds are ploughed into the metal.
The US banking sector has been losing ground in 2022 even though the Federal Reserve has hiked interest rates four times since March.
Stock markets were rocked by the stronger-than-expected US CPI reading, the headline number was 8.3%, but economists were expecting 8.1%.
Traders are in risk-on mood once again as stocks, metals and oil are rallying. Tomorrow, the US CPI data will be posted, and economists are expecting a reading of 8.1%, which would be a fall from the 8.5% posted in July.
Last week, the ECB hiked interest rates by 75-bassis points, meeting estimates. Christine Lagarde, the head of the ECB made it clear that more interest rate hikes are in the pipeline as CPI in the eurozone is at a record high.
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