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The US Federal Reserve announced raising rates 50 bps and starting balance sheet reduction in June at a monthly pace of USD 47.5 billion, stepping up over three months to USD95 billion. The move is very much in line with market expectations. Stocks and Treasuries rallied following the decision, while the dollar retreated. 

US job openings continued to grow. There were 11'549 million job openings in the US at the end of March, a new record high, and well above the expectations. This reaffirms the idea that demand for labor in the US economy continues to be very high, with the number of job openings far exceeding the total number of unemployed persons, the reason why the Fed is expected to get on with aggressive monetary policy tightening in 2022.

Investors are widely expecting a 50bps hike and the commencement of runoff, hence favouring positioning themselves defensive and avoiding growth and risk assets. Staples, healthcare and utilities were among the best performing S&P500 sectors in April as market rotation continued.

Yesterday, markets appeared to repeat the fall of Friday. The S&P500 fell to as low as USD4'060. However, the index proceeded to rebound impressively for the final hour. Traders may still look for a specific headline to explain the rally, but there is nothing that points to a change, at least from a macro perspective. This means the market is being driven by non-fundamental (emotion, positioning, programmatic trading...) as investors are nervous about what the Fed's Powell has to say on Wednesday. While the sentiment is indeed very negative, there are still some analysts that think the drop in equity markets is very overdone on the downside, and current levels should provide support for prices. 

European equities are having a rough Monday, pressured by disappointing economic data in China and Japan and the prospect of EU sanctions on Russian oil. The Stoxx600 briefly sank by as much as 3% and the Swedish OMX30 as much as 8% before paring losses. Deteriorating consumer confidence is also weighing on risk appetite; consumer confidence in the Eurozone declined further in April, standing now at negative 22 points.