14 events that shaped financial markets in the first 11 months of 2022

By:
on Nov 29, 2022
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  • The technology sector had a rough time in 2022
  • The Japanese yen's collapse forced the Bank of Japan to intervene
  • GBP crashed on the UK mini-budget

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While November trading did not end yet, financial markets’ volatility is expected to slow down significantly after December 15, as I wrote in this article.

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Therefore, as we get closer to the end of the trading year, here are 14(!) events that shaped financial markets in 2022.

1. Meta Platforms plunged on Q4 results

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At the start of February, Meta Platforms (NASDAQ:META) lost 26%, wiping $230 billion of its market capitalization. The stock price did not recover ever since and not trades at about $110/share.

2. Brent jumped above $100/barrel

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The same month brought a sharp move higher for oil prices. Brent oil jumped above $100/barrel after Russia invaded Ukraine.

3. China equities plunged on COVID-19 policies

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April saw Chinese equities plunging on COVID-19 policies. The zero-COVID policy continues to impact the Chinese economy negatively.

4. Fed delivers the biggest rate hike in over two decades

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In May, the Federal Reserve of the United States shocked financial markets with a 50bp rate hike – the biggest in more than two decades. Since then, it has hiked by 75bp three consecutive times in an effort to curb rising inflation.

5. Hawkish rate hike from the ECB

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The European Central Bank (ECB) surprised markets in July with a 50bp rate hike. However, it was not enough to help the euro from its lows against the dollar. Eventually, the common currency regained parity as it traded close to 1.05 in November.

6. Energy crisis hits Europe

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By September, it was clear to everyone that the energy crisis had hit Europe. European natural gas prices jumped by 15% on top of the gains made up to that moment. As a result, European economies may enter the recessionary territory.

7. US stocks declined on the inflation report

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Mid-September brought a sharp decline in the US equity markets following an inflation report that showed no signs of inflation cooling off. The report cemented a 75bp rate hike from the Fed.

8. Negative rates end in Switzerland

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Still in September, the Swiss National Bank announced that the era of negative rates ended. It raised the rates from -0.25% to 0.5%.

9. UK mini-budget triggered a GBP flash-crash

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The British pound crashed in September on the announcement of the mini-budget. The yield on the 10-year government bonds jumped 33bp, and the GBP/USD traded below 1.04.

10. Hong Kong shares dropped to a 13-year low

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Hong Kong shares fell to a 13-year low in the first half of October.

11. Global economic growth halved in 2022

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High inflation, rising interest rates, and a conflict in Eastern Europe were responsible for the global growth to halve in 2022.

12. The meltdown of the JPY

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The Japanese yen (JPY) has lost half of its value from a high in 2012, and the Bank of Japan intervened twice in the FX market in October.

13. UK markets relieved after Rishi Sunka became Prime Minister

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A new prime minister boosts investors’ confidence. GBP/USD regained 1.20 in November.

14. US midterm elections

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US stocks traded in tight ranges ahead of the US midterm elections held in November.

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