Monthly Market Commentaries

On the whole, global equities rose in April, supported by some resilient economic data. Chinese equities were a drag on the Emerging Market sector, which subsequently underperformed developed market equities. US bonds generated positive capital returns as yields fell, but in other bond markets price fell as yields rose.

All major global equity indices gained in Q1 2023. Equities were supported by receding recession worries in developed markets and the positive returns came despite the collapse of Silicon Valley Bank (SVB), which caused significant volatility in global bank shares and fears of a new banking crisis. However, Central Banks moved quickly to allay such fears and reassure investors. Over Q1 2023, bond yields fell meaning that prices rose.

After the strong returns in January, global equities declined in February. Investors became concerned that the resilient economic data published during the month will mean that interest rates will continue to rise for the foreseeable future. The US Federal Reserve (US Fed), European Central Bank (ECB) and Bank of England (BoE) all raised interest rates in the month, which lead to bond yields rising and prices falling.

Equities started strongly in January 2023 with gains across the vast majority of global markets. A number of factors contributed to this positive start, including China’s decision to relax its zero-Covid policy and signs that inflation may have peaked. Furthermore, Central Banks may be close to the peak of their rate hiking cycle, with the pace of rates hikes also slowing.

Equity markets in general rounded off a volatile year with gains in the last quarter of 2022. Albeit with the exception of China, most major equity markets finished down in December. Chinese shares were boosted by the relaxation of its zero-Covid policy.

Government bond yields edged up in December, meaning prices fell. The rise in yields was in part a reaction to market disappointment that the main Central Banks reiterated their plans to continue to tighten monetary policy, even with inflation showing signs of having peaked.

The Chancellor of the Exchequer, Jeremy Hunt, presented the Autumn Statement to Parliament on the 17th November 2022.

This Autumn Statement follows Kwasi Kwarteng’s September ‘mini-Budget’ which Mr Hunt effectively cancelled on becoming Chancellor, and takes place against a backdrop of talk of a return to austerity at the same time as the UK seems to be on the verge of a long recession and RPI inflation is at its highest since December 1980.

Earlier this year, following Rishi Sunak’s Spring Statement, a full Budget was expected to take place this autumn, but it now seems that 2022 will join 2019 as the only years in the last two centuries without a full UK Budget.

This snapshot gives you a summary of the key points announced by the Chancellor from the dispatch box. More details are available from GOV.UK.