The big miss in US employment last Friday, hasn’t stopped the markets obsessing about inflation (and as a result, higher US interest rates), especially given the shutdown of the largest US fuel pipeline due to a cyberattack has resulted in petrol shortages and higher petrol station prices.

The inflation theme has remained front and centre for global equity markets so far this week thanks to contradictory comments from Janet Yellen, the US Treasury Secretary and former Fed Chair.

There has been a multitude of announcements and meetings to keep us busy this week, but given all the talk about how inflation is building, the big one was the outcome of last night’s Fed monetary policy meeting and accompanying press conference.

Global equity markets have been on the back foot so far this week as coronavirus infections and deaths in India continue to rise.

As we highlighted in the Weekly Market Summary, the markets’ attention at the start of this week was firmly on yesterday’s (Tuesday 13 April 2021) US CPI inflation reading following last week’s large jump in US PPI inflation.

As we speculated in the Weekly Market Summary, the reaction to last Friday’s stunning US employment data has been positive with most of the major equity markets showing gains on the week (with equity markets closed on Friday and Monday for Easter, we had to wait until Tuesday to see how the market would react).

Although it is a shortened week thanks to the Easter holiday, it has already been filled with action – and we can expect plenty more as the week goes on.

We had hoped that this week’s joint testimony to the House of Financial Services Committee by the Fed Chair, Jay Powell, and US Treasury Secretary and former Fed Chair, Janet Yellen, would help equity markets, but it turned out to be a complete anti-climax as they both simply repeated their recent comments that the economic recovery is in its infancy and as such, monetary and fiscal support will remain firmly in place.

Global equity markets have, by and large, traded sideways so far this week ahead of monetary policy meetings at the Fed, BoE and BoJ.

Progress with the $1.9tr US fiscal package coupled with better-than-expected Chinese trade data has helped push equity markets higher so far this week.