The last month of 2021 saw more risk-on sentiment, despite Omicron cases in the UK and the US rising sharply. Data suggested that although it was more infectious, the symptoms and thus risk of more severe health issues were much lower than previous variants. Global markets viewed this favourably. Inflation continued to push upwards across almost all major economies, still driven by energy prices and supply concerns. This finally prompted many central banks to take action in the form of rate hikes announcing the accelerated tapering of bond buying programmes, including in the US, UK and Europe. Bond markets were slightly surprised by this and as a result, fixed income yields rose over the month and bond prices fell. Follow this link for more detail on events which transpired in the month.

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