Overall Market Backdrop, December

• In January, equities in developed markets have continued to fall throughout the month as concerns around monetary policy tightening, inflation, tensions in eastern Europe and a speculated earlier balance sheet runoff have remained prevalent.
•  Volatility finally proved too hot to handle in January with the VIX hitting highs of 31%, offsetting positive economic data seeping through from the fourth-quarter earnings reports.
• Central banks are now not only beginning to acknowledge that inflation is more persistent, but are taking action to a more hawkish monetary policy.
•  Value was the best performing factor of the month.

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