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Bonds fall further, Wall Street earnings, and traders bet on $100 oil. More inflationThis morning the U.K. became the latest developed econo [View in browser]( [Bloomberg]( Bonds fall further, Wall Street earnings, and traders bet on $100 oil. More inflation This morning the U.K. became the latest developed economy to post higher-than-expected inflation with the December reading coming in at the [fastest rate in 30 years](. U.S. Treasuries continue to slide, with the yield on the 10-year [instrument at 1.888% this morning]( and investors seeing it hit 2% by March. Money markets are now starting to price in the possibility of a [50 basis-point hike]( at that month’s meeting. There are also emerging signs that traders are betting that [tightening from the European Central Bank]( will come earlier than expected, with the yield on Germany’s 10-year bund [rising above zero]( for the first time since May 2019.  Pay rises One theme emerging from Wall Street bank earnings, besides the [generally disappointing results](, is the ballooning [cost of retaining talent](. Goldman Sachs Group Inc. reported [soaring compensation costs]( in its fourth-quarter report, while JPMorgan Chase & Co. is raising pay for junior bankers again, with first-year analyst salaries [rising to $110,000](. This morning’s results from Morgan Stanley will be watched for expense increases while loan growth will be the main focus for Bank of America Corp. earnings. When, not if Continuing on the rising costs theme, some traders now see [oil at $100 a barrel]( as a matter of when, not if. Global benchmark Brent has already rallied 25% since November, and is holding above [$88 a barrel]( this morning. Strong demand [from Asia](, the unwinding of [pandemic restrictions](, OPEC+ continuing to [struggle to meet]( its own production targets, and [security worries]( about supply are all helping the bullish outlook. The International Energy Agency in its latest report published this morning [boosted its consumption forecast]( by 200,000 barrels a day. Markets mixed There are signs the selloff in equities may be set for a pause as investor attention turns to earnings. Overnight the MSCI Asia Pacific Index dropped 1.3% while Japan’s Topix index closed 3% lower as the yen strengthened and [Sony Group Corp. plunged]( in the wake of the Microsoft Corp. deal for Activision Blizzard Inc. In Europe the Stoxx 600 Index was 0.2% higher at 5:50 a.m. Eastern Time with strong retail earnings lifting sentiment. S&P 500 futures pointed to a [gain at the open](, West Texas Intermediate was at $86.70 a barrel and gold rose. Coming up... U.S. December housing starts and building permits numbers are at 8:30 a.m. Canadian inflation for December is also at that time. The U.S. sells $20 billion of 20-year bonds at 1:00 p.m. Under-pressure U.K. Prime Minister Boris Johnson faces questions in Parliament at 7:00 a.m. UnitedHealth Group Inc., Procter & Gamble Co., Alcoa Corp. and Kinder Morgan Inc. are among the many companies reporting results. Bloomberg holds its [Climate Resilience event](. What we've been reading Here's what caught our eye over the last 24 hours. - Xi Jinping’s Covid defense [gets weaker]( with every omicron case. - With Activision deal, Microsoft gets [another scandal to clean up](. - 5G rollout [disrupts flights into U.S.]( from across the world. - Million in Spain and Italy have [given up looking for a job](. - Why Tonga eruption [was so violent](, and what’s next. - Trump likely used “[fraudulent](” asset valuations, N.Y. AG says. - Possibly, maybe, [signs of ancient life]( on Mars. And finally, here’s what Joe’s interested in this morning Markets got hammered again yesterday. The NASDAQ is now down over 7% on the year, while the S&P 500 is off about 4%. The moves aren't huge, though in some specific areas they are. WCLD, an ETF tracking cloud computing, is already off 16% on the year. ITB, which tracks homebuilding, is off 11%, despite indications of a red hot housing market. The biotech ETF IBB is down almost 13%. Obviously the big thing on everyone's mind is the Fed and inflation and how many rate hikes are coming in 2022. Anna Wong, the Chief US Economist for Bloomberg Economics is out calling for five hikes of 25 basis points each in the year (March, June, July, September, and December). [Some traders are now even betting on a 50 basis point hike in March](. Of course inflation readings will continue to be the new Jobs Days for a while, and a lot will depend on how or if things cool off. All this being said, there's more to markets and life than rate hikes and inflation forecasting. We're also seeing a continuing battering of the meme market. AMC isn't an important stock in its own, and it's certainly not in and of itself sensitive to whether the Fed hikes 4 or 5 times this year. But it was down another 8.4% yesterday. GameStop fell 6.6%. MicroStrategy over 6% despite the fact that Bitcoin actually rallied. So in addition to the macro stuff, we're also seeing a broader diminishment of risk appetite in some of the more speculative areas of the market. You can see it slowly in non-price areas of the market as well. Back in late October, Robinhood was the 9th most popular free investing app in the Apple app store [according to Sensortower](. Now it's down to 19th. [Coinbase was #1 at the end of October](. Currently it's at #5. Animal spirits and the impulse to speculate can move for unpredictable reasons. It's not obvious that even if inflation were to moderate and the Fed were to go slower than expected, that the go-go vibe from the first half of last year would rematerialize. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. 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