We saw several interest rate moves last week, broadly in line with consensus expectations (more info below). Within the eurozone, the ten-year German bund yield climbed above 1% last Tuesday, a level last seen in 2015. With the ECB expected to taper its bond purchasing programmes in the coming months, the conventional wisdom in relation to eurozone interest rates has shifted. Late last year no moves higher were forecast until ‘2023’, a few weeks back it was ‘Q4 2022’, and now looks set to be ‘Q3 this year’, potential during the summer. In our 2022 Investment Outlook, we noted the risk of a Fed policy misstep. This remains the key worry for investment markets, as the FOMC faces a tough ask to tame inflation by slowing the economy, but not allowing it to slip into a recession.


Locally there was good news on the fiscal front, with a positive report from the NTMA followed up with a ratings upgrade from Moody’s. The A1 rating with a positive outlook is the highest rating seen since 2010. Local elections in the UK and Northern Ireland were broadly in line with polling data, with the Conservatives losing over 400 Council seats and Sinn Fein becoming the largest party in the Northern Ireland Assembly.