Rate hikes, Commodities, the BOJ, and Q4 Earnings.

A slow start of the week after the U.S. Bank holiday and ahead of the opening session today. Yet Markets maintain focus on prospects of U.S. interest rate hikes in the upcoming months. Q4 earnings season seems to have taken a lot of market attention as well as the cyclical rotations taking place as investors cut back on growth with value instead.

Financials are expected to do much better and so are value stocks in general in comparison to growth. This seems quite obvious as yields keep climbing which isn’t supporting tech either. Volatility may also spike over the next couple of weeks as earnings season kicks off especially at a time where inflation has risen 7% last month, hitting its highest record since 1982.

Moreover, the bank of Japan has raised its inflation forecast and warned of commodity-driven price hikes. However, they also raised the economy’s growth forecast.

Inflation will stay under the spotlight for now, as oil prices also strike new 7-year highs on tight supply. Geopolitical tensions in the middle-east have disrupted supply causing the commodity to swing to its highest since 2014.