Week ending 1st April 2022.

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It may have been another week, but the themes driving global equity markets remained the same:  inflation (and with it the potential for higher interest rates) and the war in Ukraine – and global equity markets ended the week in positive territory on hopes of a cease-fire between Ukraine-Russia increased after negotiators called this week’s talks “constructive”.

Sentiment was further boosted by a sharp fall in the oil price.

The cost of a barrel of Brent crude fell over 10% during the week after it was announced that President Biden plans to release a million barrels of oil a day from its strategic reserves to help ease inflationary prices, coupled with news that Shanghai (a city with a population of over 26m) was being put into lockdown due to China’s recent coronavirus resurgence.  However, we should point out that this new lockdown is a double-edged sword:  while China’s new lockdowns will reduce oil demand, it could exacerbate the current supply chain disruptions.

Looking ahead to this coming week the main focus will be on the release of the minutes of the last Fed monetary policy meeting (which was held on 16 March 2022), given a number of Fed policymakers have recently started to talk about the need to increase US interest rates by 0.5% at the next meeting – and potentially the next couple of meetings.

Additionally, we have Russian PMI and CPI data – which should give us an indication of how the sanctions are impacting its economy.

Investment Management Team