Monthly Market Commentaries

As Q2 2022 came to an end, both shares and bonds remained under pressure as investors factored in further interest rate rises, increased risk of recession and inflation continuing to move higher in most major economies. Generally, global equities fell during the month, with Chinese shares proving to be the exception as prolonged lockdowns were lifted in some of the major cities.

Global equities ended largely unchanged in May. Markets continue to be concerned about rising inflation and the potential for a faster pace of central bank monetary policy tightening, increasing interest rates and of course the ongoing war in Ukraine. Bond markets were mixed, with UK & European markets seeing further increases in yield and reductions in capital values, whereas yields fell in the US and led to capital value appreciation.

April saw both share prices and bond values fall. Global shares were impacted by the ongoing conflict in Ukraine, Chinese lockdowns and continued supply chain disruptions. These events have further exacerbated the impact of the Covid pandemic.

The Russian invasion of Ukraine has caused a global shock and impacted investment markets. Equities have declined and rising yields have led to falling bond values. Commodity prices have soared, especially given Russia’s status as a key producer of commodities including oil, gas and wheat.

Russia’s invasion of Ukraine in late February has shocked the world. The humanitarian impact is significant, as are the economic and financial implications. In response to the invasion, markets fell as investors assessed the potential economic impact of the sanctions imposed on Russia, who remain a key global exporter of commodities.

The prospect of prolonged inflation, expectations of interest rate hikes and the tension between Russia and the West over Ukraine saw negative equity market returns. However, global bond yields rose, with markets projecting up to 5 rates hikes in the US starting in March.