The global monetary tightening cycle has crossed a symbolic milestone with yields on German, British and U.S. 10-year government debt topping 1%, 2% and 3% respectively, levels not seen in years.

This rising trend is seen accelerating further with a hawkish Federal Reserve expected to hike interest rates by another 2.5% in 2022, starting with 50 basis points today, the biggest hike in more than two decades.

The Bank of England is due tomorrow with markets pricing a fourth hike in a row, a first since 1997, as data showed UK shop prices are surging at their fastest rate in over a decade.

More investors are also putting their money on a European Central Bank lift-off in July despite the economic uncertainties fuelled by the war in Ukraine and the supply chain disruptions linked to COVID-19 lockdowns in China.

And as policy makers push forth on a policy tightening cycle, there is a growing risk of a policy mistake leading to a recession or to some kind of tantrum across markets.

Many investors blame the Nasdaq's downfall on fast-rising bond yields which typically boost the appeal of 'risk-free' government bond returns while denting the attraction of growth stocks and their faraway future cash flows.

The outperformance of London's FTSE 100 index and its value-heavy (read cheap) miners and oil majors is quite telling.

So far in 2022, UK blue chips are up 2.4% while the Nasdaq lost close to 20%. Even if one takes out the currency impact of the rising greenback, the London index still hold the upper hand with a drop limited to 5.6% year-to-date.

Graphic: FTSE vs Nasdaq:

Key developments that should provide more direction to markets on Wednesday:

-RBNZ says New Zealand's financial system remains robust

-German exports fall more than expected in March

Euro zone retail sales

OPEC/non-OPEC meeting

-U.S. Federal Reserve's Federal Open Market Committee (FOMC) meeting and press conference  1800 GMT

-U.S. MBA mortgage applications/ADP payrolls/international trade/ISM non manufacturing PMI

-Brazil central bank meeting. Rates to rise 100 bps to 12.75%

-Volkswagen keeps outlook as global network offsets supply chain woes [nL5N2WW15J)

-Hugo Boss sticks to 2022 outlook despite COVID restrictions, Ukraine war

U.S. earnings: Office Depot,  Marriott, Yum Brands, New York Times,  Uber, eBay, Metlife

(Reporting by Julien Ponthus)