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Following on from last Saturday’s geopolitics, it's no surprise that markets have gone through a see-saw. With safe haven assets shooting up.
A generally bullish, risk-on week aided by talk that Europe & UK look set to lower interest rates, meanwhile the US remain somewhat undecided.
The final week of April resulted in the worst month for the S&P500 & US Treasuries in 6 months, as concerns mounted around inflation and geopolitics.
Global REITs and Global Agg (Bonds) declined over the Quarter. Commodities, Commodities, helped by the energy component, turned positive.
There has certainly been an air of “Risk Off” this week spiked by a couple of factors with US Inflation data and Energy Prices
Analysts are revising, upwards, their gold price projections, inflation and witnessing a further pickup in global activity.
We look at the global shift in interest rates and regional trends. Negative rates end, while some go down and others remain the same.
Last week saw the release of the February Consumer and Producer inflation data for the US. The worry was around Producer (or input) price inflation
Jerome Powell gave his Humphrey-Hawkins testimony. The key punchline: “Rate cuts are coming, but not imminent
February was a strong month but, most notably, some asset classes (like the Nikkei) set all-time highs from its previous record set in 1989.
In summary, I have no clue whether it’s overvalued, undervalued, fairly-valued. When we are on the cusp of something new, valuations are almost irrelevant.
Strong inflation data was released which forced bond yields to rise higher (i.e. bonds fell in value) as enthusiasm of rate cuts became tempered.
It was another difficult week for bonds as caution was sounded by Central bankers over persistent inflation and, therefore, rate cuts.
It was all eyes on the FOMC (Federal Open Market Committee) meeting.
There’s a lot of conjecture when rate cuts will start but no conviction amongst Central Bankers to start the process just yet.
Global equity funds saw big outflows of $8.68bn. This was the third, week in a row as CBs in the US and Europe pushed back against market expectations
Performance contrast is stark showing how, being uninvested, would have cost an investor substantial returns as a result of missing out on Q4 performance.
The drivers behind are clear enough: (1) endless talk of rate cuts; (2) falling headline inflation and (3) a perceived decline in geopolitical risk