jan 25  welcome to the home for realtime coverage of markets brought to you by reuters reporters you can share your thoughts with us at marketsresearchthomsonreuterscom interest rate betting markets have been broadly impervious to the stock market selloff in recent days but signs around the edges show that this may be changing at the lows yesterday us stocks spx were down 4 on the day and money markets blinked with march futures not predicting a 25 bps rate hike by the us federal reserve for the first time this year while that changed quickly as us stocks staged an impressive recovery into the close medium term expectations have taken a hit december fed fund futures rallied overnight trimming the cumulative amount of rate hikes priced for the whole of 2022 to around 92 bps from 98 bps on friday it remains to be seen whether federal reserve policymakers will take note of the market selloff at the outcome of a policy meeting this week at yesterdays lows us stocks spx were down more than 12 for the month and were then on track for their biggest monthly fall since the pandemic slammed into markets in march 2020 the highflying nasdaq has seen 3 trillion wiped off its market value overall this month any signs of a softening bias and rate expectations could melt further european shares kicked off the session on the positive side but caution over the fed and ukraine risks was palpable making for some choppy moves in the first hour of trading the stoxx was last up 05 after moving earlier between flat and a gain of more than 1 recovering part of mondays steep fall wellreceived earnings from the likes of logitech ericsson and swatch helped sooth nerves although credit suisse slid to a new 20month low after the swiss bank warned it was likely to report a net loss in q4 as it flagged fresh legal costs buy the dip or pray for fed put 0814 gmt bears are on the prowl in markets while a different sort menaces europes eastern flank its probably futile to expect the russian bear to retreat the way wall street bears did late on monday when sentiment turned on a dime allowing the sp 500 which was 4 in the red at one point to close higher clearly dipbuyers havent entirely fled equity markets or was it a function of all those short nasdaq positions which suddenly found themselves in the money the impulse hasnt carried through with asia deep in the red and wall street futures down almost 2 option market readings are not reassuring either trading in put options used to place bearish bets outnumbered bullish call options by 11to1 on monday apparently the most bearish that ratio has been since march 2020 away from markets though the global economic picture isnt looking too bad pmis advance readings on monday did show an omicrondriven slowdown in december business activity but signalled a peaking in supply chain delays south korean gdp expanded at the fastest pace in 11 years and of the us companies that have reported q4 earnings 77 beat forecasts in the middle of this market churn the fed starts a twoday meeting which may well be the last before a march interest rate liftoff many hope it will pay attention to the tightening in financial conditions such large equity selloffs inevitably cause jpmorgan cite the robust earnings season to argue the bearishness is overdone and after all they add the worstcase scenario could see the return of the fed put key developments that should provide more direction to markets on tuesday singapore tightened monetary policy settings in its first outofcycle move in seven years south koreas economy expanded at the fastest pace in 11 years in 2021 australias core inflation flew to its fastest annual pace since 2014 in the december quarter european stock futures are rising thanks to a surprise late rebound on wall street on monday but volatility is likely to persist as rate and geopolitical risks reduce visibility over the shortterm direction of markets so while contracts on the euro stoxx 50 dax and ftse indices came off highs to trade up around 06 after the region suffered its worst day since june 2020 futures on the nasdaq fell more than 2 and those on the sp 500 slid 16 investors remain nervous about the potential for military conflict in ukraine and ahead of a key fed meeting that could offer hints about the timing and pace of rate hikes read more