Written by Chris Ayton

Last week was a negative week for both bonds and equities, as geopolitical worries dominated the headlines. There were few hiding places for investors, although lower valuation markets like the UK (FTSE All Share Index -1.2%) and continental Europe (MSCI Europe ex-UK -0.6%) outperformed the wider MSCI All Country World Index’s -2.9% on a relative basis.  Recent strong performers, like the Nasdaq Index (-5.3%) and the MSCI Japan Index (-6.0%) were the laggards.

The bond markets’ travails were resulting from a growing belief that, due to a continued stream of more positive than expected economic data, interest rates in the US and elsewhere will not come down as fast as originally hoped.  This meant longer dated bonds, which are more sensitive to interest rates, underperformed.  Conversely, the positive economic data helped more economically sensitive short dated credit indices to outperform, albeit they were still marginally in negative territory for the week.

China was a rare bright spot with both its domestic “A-share” equity and bond markets in positive ground over the week.  This was supported by news of China’s Q1 GDP growth coming in at 5.3%, which topped forecasts.  However, underlying this positive headline data it was evident that retail sales growth remains benign, leading to further calls for stimulus to enhance demand.

Within commodity markets, gold continued on its bull run with news of Israel’s attack on Iran leading investors to seek out safe haven assets on the back of worries the actions risked dragging the region into a wider conflict. Gold has also been supported by central banks, particularly China, accumulating physical gold bullion in order to diversify their reserves and reduce their reliance on the US Dollar.


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All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 22nd April 2024.

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