By Laura Sánchez

Investing.com — A wild week in the financial markets. The market is torn between central bank meetings, the expectation of them and news about Omicron’s rapid expansion.

After yesterday’s fall, the European stock market is expected to rebound on Tuesday.

Omicron monitoring and ongoing research on the variant indicate that this virus is more easily transmitted than previously known variants. However, its severity is very mild. Link Securities states that, if the initial findings of Omicron are confirmed in the following weeks, it may prove to be the beginning or end of pandemic.

Markets anticipate that the Fed will change its course tomorrow. Banca March points out that a change would see a quicker withdrawal of stimulus than the initially expected pace and an aggressive stance against inflation.

Many houses suggest stimulus withdrawal might be done in March instead of June, as originally estimated. These experts add that the Cleveland Fed’s president, who is a voting member of the Fed, said it was possible to allow for two rate increases in 2022. This pace would be supported by President of the St Louis Fed.”

The Fed will speed up tapering (withdrawal asset purchase purchases) from 15 billion to 30 billion. Before making any moves, the BoE will wait till January and then the SNB or the BoJ won’t make any changes. Bankinter points out that volatility is expected to rise in this environment, however, the overall flow of money is positive, and will support stock markets for the medium and short term.”